The Penguin's New Desktop Habitat

Linux is popping up on PCs worldwide as businesses and governments start opting for the open-source operating system instead of Windows

Open-source software conferences tend to attract a typical assortment of long-bearded geeks, tech evangelists, and the odd business suit. But at the Linux Desktop Consortium conference, which will take place on Nov. 10 at Boston University, one of the stars will be Dr. Martin Echt, an avuncular cardiologist from Albany, N.Y. Dr. Echt, chief operating officer of Capital Cardiology Associates, an eight-office practice, will discuss his decision to shift his network of PCs to Linux from Microsoft's (MSFT ) Windows, the operating system that controls the basic functions of computers running on Intel (INTC ) microprocessors.

While Dr. Echt is an unusual Linux convert, he's hardly alone. In China, the State Council has mandated that all ministries buy locally produced software in the next upgrade cycle. In particular, it's pushing the local flavor of Linux, dubbed Red Flag. In the impoverished Spanish region of Extremadura, the government has installed on 200,000 PCs a Linux operating system that incorporates the regional dialect. And despite a personal visit from Microsoft CEO Steve Ballmer, the city of Munich has promised to transfer its 14,000 PCs from Windows to Linux as early as next year.

"It's open season for open source," declares Walter Raizner, general manager of IBM Germany. One of the biggest corporate backers of Linux, IBM (IBM ), has more than 75 government customers worldwide, including agencies in France, Spain, Britain, Australia, Mexico, the U.S., and Japan.


  Each organization has its own reason for moving to Linux -- the software with core code that's open for all to see and adapt. For Dr. Echt, it's a question of lower price and long-term flexibility. In China, the government claims national security as a reason to move to open-source code, which it trusts because, unlike with Microsoft's proprietary code, it permits engineers to make sure there are no security leaks and no spyware installed by wily foreigners.

In Munich, the move was largely a political gambit to break Microsoft's lock on the desktop market: "With this trend-setting decision, Munich secures itself as the first major city to have a major portion of its IT infrastructure be supplier-independent. [It] also sets a clear indication of more competition in the software market," crowed Mayor Christian Ude at the city announcement in May.

Linux' growing popularity has repercussions not only for Microsoft but for the PC industry as a whole. Until now, hardware makers such as Dell (DELL ), Hewlett-Packard (HPQ ), and Gateway (GTW ), have relied on ever-more complex software to sell ever-more powerful PCs. A shift to Linux desktops, particularly by governments (which market researcher IDC says account for 10% of technology spending), could slow growth in the battered PC business, since Linux requires less powerful -- read lower-price -- PCs. "I think we're finally succeeding at commoditizing the desktop," says Bruce Perens, co-founder of the Open Source Initiative and the author of several books on Linux (see BW Online, 3/3/03, "Programmers Are Like Artists").


  That's the aim of Britain's Office of Government Commerce (OGC), which plans to run open-source trials in nine departments as diverse as the Office of the Deputy Prime Minister, the Work & Pensions Dept., and the Culture, Media & Sport Dept. The trials, which will last for the next six months, aim to level the playing field for open-source and proprietary software, and help these agencies make choices that offer the best value for money.

Britain isn't taking sides, says OGC spokesman Martin Day. It just wants to know which approach makes for the most efficient use of PCs. A European Union study released Oct. 15, demonstrated that a government agency with 3,500 PCs that migrated from proprietary software to open source would earn its money back in just 18 months.

Halfway round the world, Asian governments have hit upon the same idea. Tokyo has earmarked $8.6 million for a project, co-sponsored by the South Korean and Chinese governments, to find alternatives to Windows. In November, the Asian triumvirate will hold a summit to boost research in Linux, including versions of it that better handle Asian languages.


  Microsoft isn't exactly on the ropes. According to IDC in Framingham, Mass., it now ships 93.8% of desktop operating systems worldwide. And despite the push of lower-cost Linux players into the market, says Forrester Research principal analyst Ted Schadler, Microsoft will maintain the lion's share of the desktop market, for three reasons.

First, Linux is still playing catch-up, adding features to its applications that many users of, say, Microsoft Office take for granted. Second, some fear that Linux applications won't be compatible with the Microsoft products the rest of the world uses because the Colossus of Redmond has been known to alter its applications' code so that Linux apps can't read or work with Microsoft Word or Excel files.

Finally, Microsoft continues to innovate. In the latest version of the Office suite of applications and on the new Tablet PCs (slates that let you enter and store data in handwriting), Microsoft is beginning to tie word processing and spreadsheet software to corporate databases and other applications (see BW Online, 3/3/03, "Before Linux Is on Every Desktop".)


  For an interloper like Linux, "it's an uphill battle," says IDC analyst Al Gillen, who predicts that an open-source operating system won't enjoy explosive growth on the desktop for at least six or eight years. Still, even Gillen can't deny that Linux' penetration continues to rise. Its share of the market has nearly doubled from 1.5% at the end of 2000 to 2.8% now. And by yearend, according to IDC, it will have surpassed Apple's (AAPL ) Mac OS, which has 2.9% of the market, as the second most popular operating system.

The growth is no surprise to Doc Searls, senior editor of the magazine Linux Journal and one of the most popular technology bloggers on the Web. "With the price of PC hardware melting toward nothing, the (growing!) cost of Windows is becoming an increasingly exposed and unsustainable irony," he wrote last January. "At some point, low cost and reliability will win the market. That's when [Linux on the desktop] breaks through the dam." For Dr. Echt and the occasional outpost in the PC world, that dam has already sprung a leak.

By Jane Black in London

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