Wall Street firms get hands-on look at Linux from IBM

IBM Corp. is accelerating its push of Linux in the financial industry by opening a Linux showcase in Manhattan where customers can get hands-on views of what the operating system can do for their businesses.

In an announcement Thursday, IBM said it will launch a "Linux Center of Competence" at 590 Madison Ave. by September so customers can pour over IBM servers and mainframes running Linux and look into applications from vendors including J.D. Edwards & Co., Veritas Software Corp., SunGard Data Systems Inc. and Sybase Inc. Customers will be able to run their own applications on the hardware to quickly test performance and potential, and can seek a wider range of testing if desired.

The store will be just a mile from the heart of the Wall Street financial community.

Rich Michos, a vice president of Linux servers at IBM, said the center is seen as a place where potential users can gauge the value of Linux to their operations without having to make a large commitment of time or money. "There's a [segment] of financial customers that adopt technology aggressively on one hand, but are very conservative in the projects that they do," he said. At the center, they will be able to try without having to buy, he explained.

IBM will spend more than US$1 million to assemble the center, which will offer a full range of support for Linux, including access to IBM hardware, software and services, technical advice and Linux training courses and educational programs. Customers will have hands-on access to IBM's entire eServer product line including, Intel-based xSeries systems, and Linux clusters and mainframes.

By opening the center, IBM continues its push into the financial services market, where it has been vocal in touting the monetary and performance benefits of replacing proprietary Unix systems from competitors such as Sun Microsystems Inc. with Intel-based Linux hardware. Large financial services companies, including Merrill Lynch & Co., UBS Warburg LLC and Credit Suisse First Boston Corp., have all made forays into the Linux world in recent months to take advantage of lower costs and other benefits.

Analysts say the store in New York is a good idea for IBM.

"It's a logical move on their part," as IBM continues its marketing campaign to get users to switch from Unix, said Stacey Quandt, an analyst at Giga Information Group Inc. in Cambridge, Mass. Particularly interesting, she said, is that the financial services industry has for years been a Sun stronghold -- although there has been recent movement toward Linux. By allowing users to come in and test their applications, many of which are custom products, IBM could open even more opportunities, she said.

One other potential benefit for users, she said, is that they'll be taking their needs and concerns directly to IBM and putting the company on the spot for answers to their problems. What could happen, Quandt said, is that end-user constituencies could be created that would enable users to band together to tell vendors what they want and demand that they get it.

"I think that's what's probably going to come out of this," she said.

Dan Kusnetzky, an analyst at Framingham, Mass.-based IDC, said he sees the Linux center as something that prospective customers will want to use. "They are facing an environment where they're expected to do more with the technology than ever before," while cutting costs, he said.

By getting an opportunity to see Linux up close, customers can more easily answer some of their questions about the operating system while giving IBM sales possibilities, he said.

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