Wall Street firms increasingly are buying into Linux, but some still need convincing that open source licensing and support models won't make using the technology more trouble than its worth.

Linux providers, speaking this week at the Securities Industry and Financial Markets Association (SIFMA) conference in New York City, stated their cases that Wall Street firms have nothing to fear about diving into open source. Red Hat and Novell argued that's especially true now that specialized Real Time Linux has been developed that meets strict low-latency and messaging requirements of brokerages and trading firms.

"There's a strong business case for Linux as an alternative to Microsoft or Unix derivatives," said Roger Levy, senior vice president and general manager of open platform solutions at Novell, which late last year released what it calls SUSE Enterprise Real Time 10 specifically for use in organizations that have millions or billions of dollars at stake based on how quickly they can complete trades.

In addition, Levy said Novell has released the alpha version of SUSE Studio toolkit for "mass customization" of Linux, adding this is "something a proprietary systems vendor would never do."

Red Hat, which last month celebrated news that the New York Stock Exchange (NYSE) and its international subsidiaries were adopting Red Hat Enterprise Linux and dumping Sun's Solaris, also has a Real-Time Linux version. Its Red Hat Enterprise MRG uses the Advanced Message Queuing Protocol developed by financial institutions JP Morgan Chase Bank and Credit Suisse with contributions from Cisco, Red Hat, Novell and other high-tech firms.

"This is about not just being fast but guaranteed-to-happen within a certain window," said Michael Tiemann, vice president of open source affairs at Red Hat.

Chris Isaacson, CEO and vice president of US-based BATS Trading, said his server base is Novell's SUSE Linux and that he is looking at SUSE Real-Time Linux 10. "There's a strong thirst for low latency -- it's about nanoseconds now" Isaacson said. "You rely very heavily on high-performance networks and uptime availability."

But even as the Wall Street crowd increasingly puts its money on Linux -- market watcher TABB Group estimates that Linux adoption among the 14 biggest investment firms this year will reach more than 72 per cent of the installed operating server base vs. 60 per cent in 2006 -- it's clear concerns linger about the licensing model. That model requires users return changes to the open source community under certain circumstances, a touchy subject for companies that are battling to accelerate their business processes.

Sun Microsystems, which now has an open source version of Solaris called OpenSolaris, is addressing such concerns by letting technology managers know that it doesn't make the demand to re-contribute changes. "Our business model is very different," says Amir Halfon, lead architect with the global financial services solutions division at Sun, which has developed Java Real-Time System to give Java-based applications a real-time requirement for fixed latency.

Linux vendors acknowledge they that hear the licensing concerns come up often.

"There's a great fear sometimes, that if I use open source, will I lose my intellectual property?" acknowledged Novell's Levy. Other panelists Randy Hergett, director of engineering for the Open Source and Linux Organizations at HP, and Marcus Rex, CTO at the Linux Foundation, sought to assuage those fears.