IBM to spend $1 billion on Linux in 2001

IBM to spend $1 billion on Linux in 2001

By Joe Wilcox, Staff Writer
CNET

December 12, 2000

IBM chief executive Louis Gerstner said Tuesday that his company will spend $1 billion on Linux next year.

Gerstner made the announcement at the eBusiness Conference and Expo in New York, where IBM also revealed a Linux supercomputer win with Shell Oil.

The Linux investment underscores IBM's increasing commitment to the operating system, across all product lines: PCs, portables, servers and mainframes.

IBM is making the commitment, Gerstner said, because it "is convinced that Linux can do for business applications what the Internet did for networking and communications"--make computing easier and free from proprietary operating systems.

Irving Wladawsky Berger, IBM's vice president of technology and strategy, said in an interview Wednesday the company already has invested about $1 billion in Linux, "and you can expect that to grow in 2001."

"We see Linux as a major force in IT and moving IT to the next generation of the Internet business," he said. "So we are supporting Linux across all of our hardware platforms, our middleware and our services business."

Gerstner questioned whether three or four years from now any proprietary version of Unix, such as Sun's Solaris, will have a leading market position.

He noted that Linux is growing at twice the rate of Microsoft's Windows NT and that the Unix variant looks increasingly likely to become more prevalent than NT. IBM has about 1,500 developers working on Linux, Gerstner said.

"The movement to standards-based computing is so inexorable, I believe Sun--and EMC and Microsoft for that matter--is running the last big proprietary play we’ll see in this industry for a good long while," Gerstner said.

IBM competes against Microsoft in the software arena and against EMC in storage.

The most to win, the most to lose
"IBM remains the most seriously committed vendor in the field around Linux," said Gartner analyst George Weiss. "They have the most to win, as well as the most to lose."

He warned that Linux adoption is still slow-moving, judging by a recent survey of large corporate clients. "It still appears that Linux is on a backburner. People are looking, waiting, cautiously appraising the potential of it. But nobody is making major commitments in commercial applications yet."

Rather than broad adoption of Linux, Gartner sees more of a trend toward specialized uses, in technical computing or appliance servers.

Shell's supercomputer will consist of 1,024 eServer 300s sorted in 32 racks and running Red Hat Linux. The oil company plans to use it for collection of seismic, geographic and exploration data. IBM will install the system in January at a facility located in Rijswijk, Netherlands.

The Shell deal comes after another Linux supercomputer win worth $3 million. Big Blue last week bumped 70 Sun Microsystems servers from Telia, a Scandinavian telecommunications company, for one IBM G6 mainframe.

In November, Japanese convenience-store chain Lawson agreed to put 15,000 Linux computers in 7,600 locations.

Berger sees the recent Linux supercomputing wins as significant in that they go beyond pure research into computing-intensive business applications.

"The fact this is Shell means it's not just being used by universities and research labs, but it's being used in a commercial business, moving into mainstream computing," he said. "Shell intends to use the system to find oil."

Weiss said that in some ways, the deal with the oil company is more significant than the $1 billion commitment. "It's a powerful commentary that Linux has a major market opportunity in the technical-computing space, and IBM can exploit that advantage."

But he warned that neither the spending nor the Shell deal "means this is a slam dunk for Linux as a broadly deployed, strategic operating system in the enterprise."