Article in the NYTimes on Linux at
http://www.nytimes.com/library/tech/98/09/biztech/articles/28linux.html
Here's a copy for those who don't want to register with the NYT.
The graphs are show...
>From 1996 to 1998, Windows NT grew from $1.3 billion to $3.6 billion in
sales. It tripled in two years.
In the same period, the entire UNIX market grew from $2.3 to $2.8 billion
(an increase of $0.5 billion). It barely held its own market.
The UNIX market is made up of SUN's Solaris 31%, Hewlett-Packard's HP-UX at
29%, IBM's AIX at 26%, and Linux at 14%.
___________________________________________________
Andreas Ramos [EMAIL PROTECTED] www.andreas.com
September 28, 1998
For Sale: Free Operating System
By AMY HARMON (The New York Times)
DURHAM, N.C. -- In an experiment that is half business model and half
populist movement, a small company called Red Hat Software is charging $50
for an operating system called Linux that anyone can get free on the
Internet, and it is paying programmers decent wages to write code that it
will give away.
While that might seem the most contrarian of business plans, Red Hat is
attracting blue-chip investors to the notion that free can be profitable.
The movement, known alternately as free software and open source, is built
around freely distributing source code, the basic commands that programmers
write. Publishing these instructions before they are compiled into the
binary language of computers offers other programmers the chance to examine
the code and suggest or actually write improvements.
At its best, the movement's proponents say, open source could harness the
collective wisdom of the world's best software designers for social good,
undermine Microsoft Corp.'s Windows monopoly and propagate an operating
system that does not crash.
A great deal of their passion is inspired by Linux, a version of the Unix
operating system developed by Linus Torvalds of Finland and numerous
collaborators worldwide. Linux (rhymes with "cynics") has attracted a
cult-like following among programmers and systems developers who say it is a
more secure, flexible and economic alternative to Microsoft's
industrial-strength operating system, Windows NT.
Despite that kind of following, the business-model half of the Red Hat
experiment strikes many people as counterintuitive.
Robert Young, the chief executive of the three-year-old company in Durham's
Research Triangle Park, insists that open-source products can make money.
And although he has nothing against contributing to a utopian vision of
software development in the process, his pragmatic focus has lately
attracted interest from venture capitalists and corporate backers.
"The software industry is built on intellectual property," said Young, a
44-year-old Canadian who used to run a computer-leasing business. "You own
your technology, and if you get it widely disseminated you can coerce your
user base into buying new releases. We give up that control -- and those
profits -- but that is exactly what is going to drive our success, because
that is what's best for the user."
Among Red Hat's potential corporate backers are Intel Corp. and Netscape
Communications Corp. An announcement is expected as early as Tuesday, when
Young is scheduled to appear with executives from both companies in San
Jose, Calif.
Such support, particularly from Intel, whose close ties to Microsoft have
recently shown signs of fraying, would lend considerable credibility both to
Linux and to Red Hat's plans to build a business by providing customer
service and technical support for the free operating system.
Recent support for Linux and other open-source projects seems to suggest a
growing acceptance in the software industry of an alternative to the
tradition of proprietary code.
IBM, for example, recently licensed Apache, a popular program for serving up
World Wide Web sites. Like Linux, Apache is a free, open-source product.
And Netscape last February published the source code to its Navigator
browser for navigating the World Wide Web. Forced to stop charging for
Navigator by Microsoft's free distribution of its competing browser
software, Explorer, Netscape gambled that going one step further and
releasing its code would give Navigator a competitive advantage over
Explorer in the long run by spurring innovation.
"Open source has already radically changed the computer industry," said Tim
O'Reilly, whose publishing company, O'Reilly & Associates, makes money
producing user manuals for free software. "In the first round, open-source
software will not beat Microsoft at its own game. What it is doing is
changing the nature of the game."
Torvalds, who wrote Linux in 1991 when he was a student at the University of
Helsinki, licensed it in a way that allows anyone to submit improved code
and redistribute it at will. Since then, thousands of programmers have
volunteered elaborate improvements of their own design for no more reward
than the respect of the geek subculture.
Submissions to Linux's core code, or kernel, are subjected to instantaneous
electronic peer review, a technological meritocracy that has so far
insulated Linux from the kind of fragmentation that has befallen other
operating systems built around the international Unix standard.
Despite the operating system's reputation for power and reliability,
corporations have been reluctant to use Linux because nobody owns it. That
is why the emergence of companies like Red Hat and Caldera Systems Inc. -- a
Linux distributor with a business plan based on corporate training, services
and support -- is considered crucial to the success of the free operating
system.
Now, bolstered by commitments from companies like Oracle, Netscape, Intel,
Informix and Corel, all of which have announced plans to support Linux in
recent months, Red Hat and Caldera are getting more aggressive.
But their business plans are fragile. For instance, since Red Hat wants
whatever code it writes to become part of the Linux kernel, it must be
published under open-source rules. That means that www.cheapbytes.com can,
and does, sell Red Hat's entire Linux package for $1.99 -- $48.01 less than
Red Hat's customers pay.
Red Hat's Young estimates that as few as 1 in 10 of the people who use Red
Hat have paid him for it. But that is one of the paradoxical pillars of
charging only for support and services, not for intellectual property.
"My job is not to compete with Microsoft," Young stresses. "It's to lower
the value of the operating system market. Microsoft makes $5 billion in
operating system sales. If I get that market, I automatically make it a $500
million market."
Skeptics are quick to note that the technology companies lining up behind
Linux, with its estimated 7 million users, have their own competitive
reasons to oppose Microsoft, which has 300 million users for its Windows
operating systems.
What is more, the skeptics point out, no one knows how long Linux's
labor-of-love development by programmers will last.
"An operating system is a living thing," said Carl Shapiro, an economist at
the University of California at Berkeley and a co-author of "Information
Rules," a book to be published this week by the Harvard Business School
Press. "Ongoing investment and upgrades are essential to attract customers.
Nice cooperative thoughts are not enough."
Still, use of Linux is growing by more than 40 percent a year, according to
IDC, a research firm. And a 1997 survey by another research firm, Datapro,
found that Linux scored higher with users than any other operating system.
Dell Computer, which last year began offering Linux to customers who ordered
at least 50 computers a quarter, said that more interest had been expressed
in Linux in recent months.
James Love, director of Ralph Nader's Consumer Project on Technology, which
has encouraged the Justice Department to investigate Microsoft's Windows
licensing deals with computer manufacturers, said his office had found it
impossible to buy Linux already installed on a PC from a major commercial
vendor. But he managed to install it on his own computer, and he was
impressed.
"This is the first time we've seen an industrial-strength product developed
without a corporation behind it, and we think it's amazing" Love said. "If
the operating system is in fact a natural monopoly, then what could be
better than having an operating system that nobody owns?"
No one argues that Linux poses a threat to Microsoft right now. But at a
time when the next version of Windows NT appears indefinitely delayed by a
complexity that has grown unmanageable, Linux enthusiasts are beginning to
find back-door ways to introduce the operating system into their
corporations.
For example, when Randy Kessel, a manager for technical analysis at
Southwestern Bell, part of SBC Communications, installed Red Hat's Linux on
the 36 desktop personal computers that monitor network operations in Kansas
and Missouri, it was done on something of a dare.
After poor results testing a memory-intensive application with Windows 95,
Windows 98 and Windows NT, a colleague had asked Kessel why, if he thought
Linux was so great, he did not try it.
"So we took a mission-critical operation and we deployed a free operating
system there," Kessel said. "And now we spend a tenth of the administration
cost for those desktops that we do for the rest of the 315 we use."
Even so, he met resistance.
"The legal department says, 'When it fails, who do we sue?' " he said. "The
IT department says, 'It's not a proved product.' Corporate security says,
'It's hackerware.' But it's the only thing that worked."
Other recent Linux converts include the movie director James Cameron's
special-effects company, Digital Domain, which used the operating system to
help create the illusions in "Titanic."
And when the city of Medina, Wash., was overwhelmed by documents --
including the four file cabinets filled with paperwork on the mansion built
by Microsoft's chairman, Bill Gates -- it installed an electronic document
retrieval system that runs on Linux.
Ray Jones, president of Archive Retrieval, which installed the system for
Medina, said he was aware of an irony in his choice of an operating system.
But he recalled feeling vindicated when a bug arose in the scanning process.
"We asked a question on the Internet, and within a couple of hours we had an
answer," Jones said. "I fixed it myself with three lines of code. With a
commercial product I'd have had to wait for Microsoft to fix it -- if it
ever did. This way, the whole Linux community benefited."
Marc Ewing, 29, who started Red Hat in 1995 because he found downloading the
various pieces of Linux a major headache, said developing software in
isolation -- without public contributions -- "would be like typing with one
arm."
And yet for Linux to ever compete with Windows, it must be easier to use.
Now users must control Linux with a complicated syntax of arcane commands.
So Ewing oversees six programmers working on a project called Gnome, an
effort to hide the nuts and bolts of the operating system behind the kind of
graphical interface familiar to users of Macintosh or Windows machines.
While they sleep, other groups elsewhere in the world are getting up to work
on Gnome. Often by the next morning, someone will have translated the code
into Portuguese.
But Torvalds, who now works for a chip design company in Silicon Valley,
insists that the true strength of an operating system is reliability.
"You use a Windows machine and the golden rule is: Save, and save often,"
Torvalds said. "It's scary how people have grown used to the idea that
computers are unreliable when it is not the computer at all -- it's the
operating system that just doesn't cut it."
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