Counting on Linux

AT FINANCIAL SERVICES giant Merrill Lynch, CTO John McKinley is blazing a trail to boost productivity and enhance ROI with his strategy. And that trail has led him to pursue a company-wide deployment of Linux open-source software.

McKinley says Linux is ready for prime time and set to take on increasing responsibility in the datacenter. "The speed of the evolution of the Linux story has surprised even me," he says.

CTOs of major enterprises such as Merrill Lynch, which claimed $21.8 billion in revenue in 2001, are adopting Linux in increasing numbers and scale. These chief technologists, spurred by the new reality of leaner, meaner IT budgets, cite savings in hardware and software costs as well as benefits of the operating system's stability and scalability. A 2002 Forrester Research survey found that of 286 IT decision-makers, 28 percent plan to use Linux for enterprise application servers in 2003 and 31 percent plan to use Linux for Web servers.

Chief technologists are reporting favorable results, experts say. They say doubts about Linux are gradually disappearing as the OS gains acceptance and support from big-name vendors such as IBM and Hewlett-Packard.

"People are enthusiastic before they implement Linux and they are even more so after deploying Linux, which reverses the usual trend," says Dan Kuznetsky, program manager for the operating environments group at Framingham, Mass.-based research company IDC. "[IT leaders] find it not only will it do what it promises, but will do a lot more."

However, there is a cloud in the OS's silver lining. Linux does not yet lend itself to an off-the-shelf implementation, and enterprises still must test it and integrate it into their systems, Kuznetsky says. But several companies, including Red Hat and IBM, are eager to assist with Linux implementations.

Additionally, many CTOs have the expertise in-house to do their own Linux integration. J. E. Henry, CIO of Regal Entertainment Group, the 520-theater chain based in Knoxville, Tenn., says that in 2002 Regal deployed 3,000 Linux-based IBM point-of-sale terminals with minimal help from IBM. "We have very talented people and we do a lot of internal development," Henry says. "There's some risk-taking involved [in implementing Linux] but the fact is that Linux has been so stable it takes a lot of the risk out of it."

The growth of Linux is especially strong in the enterprise server market, where IT executives are finding more and more uses for the OS. "As Linux becomes a mainstream choice in more and more markets, more application and development tool vendors will say, 'We need to have a Linux solution,' " Kuznetsky says. "Linux has taken on the position of the No. 2 server option" behind Microsoft.

Money talks

CTOs are using Linux to replace both back-office, mainframe systems and to take on lightweight duties such as running multiple application servers.

At Merrill Lynch, McKinley is trying to cut costs by using Linux to replace mainframe enterprise servers using IBM servers running Linux, and by using Linux with Intel-based, commodity PCs and appliances. "We are using Linux on Intel and Linux on IBM z-Series [mainframe]," he says. "We are riding both horses right now.