I.B.M. to Offer Linux With Netfinity Computers

I.B.M. to Offer Linux With Netfinity Computers

By Amy Harmon
The New York Times

February 18, 1999

In perhaps the most significant endorsement yet of the little operating system that could, the International Business Machines Corporation will announce Thursday that beginning next month it will ship its Netfinity line of network server computers with the free operating system Linux pre-installed alongside Microsoft's Windows NT.

Linux is a highly regarded flavor of Unix, a kind of operating system widely used in powerful business machines that serve as the hub of local computer networks and Web sites.

But despite its power and stability, Linux has not gained wide acceptance because corporations have had nowhere to turn for support; it was designed and built by a loose international coalition of programmers who freely share its source code and collaborate on its development. Thus, there is no company that can be held responsible for the product.

I.B.M. will address that drawback by offering customers technical support for the software through an agreement with a Linux distributor, Red Hat Software.

The move by I.B.M. comes on the heels of decisions by several other computer manufacturers -- most notably Hewlett-Packard and Dell Computer -- to sell machines that run Linux, making it a viable competitor to other flavors of Unix and, most notably, to Windows NT.

Although some system administrators and programmers within companies have embraced Linux because of its flexibility and propensity not to crash, the operating system has rarely been officially sanctioned by management because of its orphan status.

"This increases the credibility of Linux in organizations," said Stacey Quandt, an analyst with Giga Information Group in Cambridge, Mass. "A lot of companies are running Linux on some server in a closet somewhere, but when I.B.M. comes out and says they're supporting it, it creates a lot more credibility."

I.B.M. said customer demand had been growing for Linux, particularly among Internet service providers and companies that want to take advantage of its open source code to modify their systems for their own needs.

"If you go back to early PC days, what you typically saw was technically literate folks using PC's at home and moving them into businesses where it wasn't a top-down decision," said Phil Hester, chief technology officer of I.B.M.'s personal systems group. "This has a lot of that same feel to it. We think we need to understand this marketplace and grow with it."

Hester's division, which is based in Raleigh, N.C., just five miles from Red Hat's headquarters, has set up a laboratory to test Linux on the Netfinity servers, as well as on work stations and its Thinkpad line of laptops. In addition to Linux and Windows NT, the Netfinity servers will continue to be shipped with I.B.M.'s OS/2 operating system.

The deal positions Red Hat, which also supplies Linux to Hewlett-Packard, as the leading commercial distributor of the operating system, although I.B.M. left open the possibility that it would also contract with one of Red Hat's competitors, like Caldera Inc. or SuSe.

Linux, which can be had free on the Internet, has spawned a cottage industry of distributors that combine its various pieces on a CD-ROM with basic technical information.

Red Hat, a five-year-old start-up that last year received an equity investment from the Intel Corporation, aims to make money by selling technical assistance to Linux's growing customer base. Under the agreement with I.B.M., customers will have the option of buying Red Hat support directly or through I.B.M. The company's existing support contracts range from $1,000 a year for a single user to $60,000 a year for enterprises, depending on the number of computers linked to the server.

Microsoft uses a different approach, pricing its support for the Windows NT Server by "incident," meaning that when a customer has a problem, he gets Microsoft's help for a specified amount of money. Typically, this is about $195, with a volume discount for companies that prepay for 10 incidents. Windows NT itself range in price from about $250 for a single computer to about $55 per computer when licensed for 25 or more computers.

"Intel's endorsement of Red Hat meant Linux was O.K. to use," said Robert C. Young, Red Hat's chief executive. But anyone who bought it still took on the liability for buying hardware not supported for Linux. Now I.B.M. is stepping up and taking responsibility for the hardware component."

Still, analysts caution that the bigger hurdle for Linux is a lack of software that runs on it.

"Applications drive operating system sales," said Bill Petersen, research director for IDC Research. "The fact that Linux is available on hardware gives chief information officers the ability to say, 'Great, I can get Linux,' but their next question is, 'What can I run on it?' The story only begins to get interesting when more organizations begin to make their applications available for it."