thought you'd all find this interesing... --- Bob Macchia <[EMAIL PROTECTED]> wrote: > Date: Wed, 31 Oct 2001 13:48:01 -0500 > From: Bob Macchia <[EMAIL PROTECTED]> > To: Susan Macchia <[EMAIL PROTECTED]> > Subject: Linux on Amazon > > > Amazon Says Saving Money with Shift to > Linux > > By Scott Hillis, Reuters, 10/30/2001 > SEATTLE (Reuters) - Amazon.com Inc. (AMZN.O) cut its > technology > costs nearly 25 percent last quarter as it reaped the > benefits of falling > telecommunications prices and a shift to the cheaper > Linux operating > system, the online retail giant said in a regulatory > filing on Tuesday. > Amazon's adoption of Linux mirrors experiences among > other > companies that, eager to cut costs amid the faltering > economy, are > increasingly using the open-source system as an > alternative to > costlier software from companies such as Sun > Microsystems Inc. > (SUNW.O) and Microsoft Corp. (MSFT.O). > Linux is an open-source operating system, meaning its > code is freely > available, in contrast to proprietary products like > Microsoft's Windows > which keep their code under lock and key. > By using Linux, corporations can use numerous computers > without > paying a software license fee for each one, and can also > customize > the system to fit their particular needs. > Linux's greatest success has been on the Internet, where > it has a 24 > percent market share on server computers, according to > market > research firm IDC, which projects Linux will remain the > No. 2 server > operating system behind Windows through 2005. > And as far as telecommunication prices go, according to > Adam > Hamilton, an analyst with brokerage McAdams Wright > Ragen, he > figures the company probably has also benefited from > lower > connectivity fees it pays to keep its site up and > running on the Internet. > In its third quarter, Amazon said it spent $54 million > on technology, > down $17 million or 24 percent from the $71 million it > spent a year > earlier, the company said in a 10-Q filing with the > Securities and > Exchange Commission. > In the first nine months of the year, Amazon spent $189 > million on > technology, compared with $200 million in the same > period last year, it > said. > ''The decline in absolute dollars spent ... primarily > reflect our migration > to a Linux-based technology platform that utilizes a > less-costly > technology infrastructure, as well as general price > reductions for data > and telecommunications services due to market > overcapacity,'' > Amazon said. > AMAZON TIGHT-LIPPED > An Amazon spokesman declined to give details of exactly > how the > company was using Linux, what software it had replaced > and how > much it was saving from that move alone. > ''We've always been pretty closed-mouthed about > technology on the > back-end stuff, partly because it's pretty steep tuition > and we don't > want other people going to school on our tuition,'' > spokesman Bill > Curry said. > Curry did attribute the cost-cutting to a big technology > deal with > computer giant Hewlett-Packard Co. (HWP.N), saying, > ''They've really > helped streamline the infrastructure, move us to Linux > and build a > lasting cost improvement.'' > Amazon also has a deal with Linux vendor Red Hat Inc. > (RHAT.O) to > use its software to process secure electronic commerce > transactions > -- the heart of Amazon's operations. > By embracing Linux, Amazon is edging away from the > Seattle area's > high-tech powerhouse, Microsoft. Analysts said while > Amazon is > believed to use some Microsoft products, a recent deal > with Microsoft > foe AOL Time Warner Inc. (AOL.N) is probably pushing it > farther away > from the software giant. > ''With the investment they took from AOL and the > agreement to provide > AOL with a personalized shopping platform, I think > they've been > gravitating toward the Linux-Unix anti-Microsoft camp,'' > said Hamilton. > PROMISED LAND OF PROFITS AHEAD? > But the shift to Linux started earlier when Amazon said > in late April it > would begin moving a ''large portion'' of its systems to > Linux as part of > a broader plan to cut costs and nudge the money-losing > company > toward profitability. > Amazon Chief Executive Jeff Bezos is fond of saying his > company is > better positioned than traditional retailers because it > is based on > technology, the price of which falls over time, rather > than real estate, > the cost of which constantly rises. > IDC operating systems analyst Dan Kusnetzky said it was > no surprise > Amazon was saving millions by switching to Linux. > ''That's one of the reasons Linux is so attractive,'' > Kusnetzky said. > ''The software, and often the cost of the hardware that > runs on it, is > considerably less.'' > But now Amazon is facing flagging consumer confidence, a > shaky > economy, and deep uncertainty about the future in the > wake of the > Sept. 11 attacks. > Amazon shares fell 63 cents, or 8.9 percent, to $6.42 on > Nasdaq. > ''Whether or not they can make it to the promised land > based solely > on that (technology savings), I don't think is true. > They need the > economy to come back,'' Hamilton said. > -- > Bob Macchia > SoftLinx Inc. > tel +1.978.392.0001 x303 > fax +1.978.392.4303
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