Linux gets a break

AP

If IBM likes it, then it must be all right. That, at least, is what supporters of Linux, an operating system for computers, are hoping. Unlike Microsoft Windows, Linux holds no secrets for programmers. Its source codes can be read like an open book, which makes them easy to adapt to individual needs and cheaper to buy. After years in the doldrums as Microsoft forged ahead in market after market, Linux is making a comeback—and in an unexpected market.

Thanks to its stability as an operating system and the fact that it can be made secure, Linux is fast catching on among retailers. This week, IBM annnounced deals with two big retailers—Regal Entertainment, which owns scores of movie theatres in America, and Casas Bahia, a big Brazilian retailer—to supply thousands of cash registers that will run on Linux.

These sales followed earlier agreements with IBM and Sun Microsystems, two of the world's largest computer manufacturers, that will not only boost Linux's popularity but will also give computer users more choice. IBM has agreed to use Linux software on its servers. The agreement is with Red Hat, an independent supplier of Linux software which it bundles with other products and services. IBM had earlier used Red Hat's software on only one of its range of servers; now all four will be covered. Since IBM will profit from servicing the software, this could open up important new markets for Linux.

At the same time, Sun Microsystems said that it planned to offer Linux as part of its line of StarOffice programmes. Like Microsoft Windows, these cover word processing, spreadsheets and graphics. Unlike Windows, however, StarOffice is able to work not just on Sun's own Solaris operating system but on Linux or Windows too. When Sun begins shipping the new products in nine months or so, it will be cheaper than Windows and easier to administer. Sun reckons a single administrator will be able to support at least 2,000 users of StarOffice; that compares with one for every 50 users of Microsoft Windows.

The increasing popularity of Linux is not the only worry for Microsoft. Corel, a Canadian company which bought a word-processing programme called WordPerfect from Novell in 1996, has recently done deals with Hewlett-Packard (which is merging with Compaq) and Dell Computers. Both companies are to sell personal computers installed with WordPerfect as well as Corel's Quattro Pro software for spreadsheets. Hewlett-Packard and Dell chose WordPerfect over Microsoft Works, a scaled-down version of Microsoft's ubiquitous office software.

Most documents written in Microsoft Word can be opened by WordPerfect, and vice versa. But the latter is considerably cheaper than Microsoft Works. Hewlett-Packard and Dell will also save money because they will pay far fewer royalties to Corel than they would to Microsoft in return for offering its software. Corel reckons the five million or so machines that it expects Hewlett-Packard and Dell to sell over the next year, each fitted with its software, will triple the number of WordPerfect products sold annually. But that is still only a drop in the ocean compared with the millions delivered each year by Microsoft.

One reason why alternatives to Microsoft's products are catching on at the moment is the company's new pricing policy. Instead of paying once for new products or upgrades, Microsoft is now charging many corporate customers and government offices a form of subscription. Many complain that this has increased the cost of their software. So far, computers with Linux-based operating systems are most popular with retailers and companies that run call centres dealing directly with customers. But businesses offering financial services have also begun switching to Linux.

Others may follow. Familiarity with Microsoft Windows remains a powerful deterrent, particularly among service companies with large numbers of white-collar workers. That is why Sun Microsystems is giving away thousands of copies of its software to schools throughout Europe and Africa. The company hopes that children accustomed to using StarOffice at school will go on to become customers in later life. Since March, Sun has donated a massive $6 billion-worth of products to schools and colleges.

Sun's generosity is finding favour with governments that are keen to avoid their domestic markets becoming ever more dependent on Microsoft and also want to help their own computer manufacturers become more competitive. China, for one, is watching the development of Linux with interest—as are politicians in Germany, where national and municipal offices are urged to use cheaper, open-source software.

Yet companies offering Linux still have a long way to go before they begin to reel in Microsoft. Even with its current, more-humble posture—the company expects soon to wrap up its long-running, antitrust dispute with the US government—Microsoft remains a formidable foe. International Data Corporation, a market-research firm, reckons that Linux has just 2.7% of the market for desktop operating systems. So even if its sales grow like topsy, it could still be years before Linux makes an impression on Microsoft's 94% share.