Economy's losses could mean gains for Linux market

What effects could outside forces, including the sluggish U.S. economy and costly software licensing changes proposed by Microsoft Corp., have on the future of Linux?

At the LinuxWorld Conference & Expo here last week, users said they're watching those issues carefully to see how their companies could be affected by myriad behind-the-scenes developments.

Some users said the ongoing economic doldrums could be a boon to a wider deployment of low-cost or free Linux operating systems, at the expense of the dominant Microsoft Windows. Others, however, said traditional corporate IT mantras will continue to emphasize Windows over other options even those that might save companies money.

Even more influential than the economic downturn, said users, is a Linux corporate computing boom that could be fueled by Microsoft's costly new licensing models for the upcoming Windows XP operating system. Those changes could prompt established Microsoft customers to look for cheaper and less-restrictive alternatives.

Sherman Boyd, a systems administrator at computer manufacturer CLH International Inc. in Tempe, Ariz., said he's hearing more questions from corporate IT leaders about the Linux operating system and what it might offer to their businesses.

"Their ears are open now," Boyd said. "They do listen, and they are evaluating it."

Smaller companies could feel more of an impact from Microsoft's XP licensing plan, which prevents users from installing a single copy of the operating system on more than one machine, Boyd said.

Even though the practice is illegal, many small companies continue to buy just one copy of Windows and install it on all of their machines to save money. If they try to move to the more feature-rich Windows XP, that strategy will no longer be possible, Boyd explained.

That's where Linux could come in, he said.

"I can see Linux coming to the desktop for those people who can't afford [Windows]," Boyd said. "As people are forced to be honest, they may look at a solution that may not be as polished as they like, but at least it's free."

David Faries, president and CEO of NeuralTech Business Information Inc., an information research firm in Bainbridge Island, Wash., said he sees the potential for Linux to gain traction in business because of the savings it can bring to companies. "It will get down to economics," he said.

But Stephen Hahn, vice president of research and development at Computing Energy Inc., a consultancy in Alameda, Calif., said that none of his clients has shown an interest in switching to Linux to save IT dollars.

"For them, relationships are important" when dealing with major vendors such as IBM, Oracle Corp. and others, he said. And because Fortune 500 user companies tend to have long procurement cycles, they are less affected by cyclical downturns in the economy, Hahn said.

"They're not going to shift technologies radically" because of their inherent fears that they would then lack skilled staff to run the new systems, he said. "You bring in another system, and you have to bring in more people," he added.

Even so, Jay Crafton, a PC specialist at Group Athletica LLC in Indianapolis, a subsidiary of clothing and shoe manufacturer Reebok International Ltd., said his company has real concerns about the possible effects of the new licensing schemes for XP.

Crafton said he attended the conference to investigate alternatives for his company's 450 PC users in Indianapolis. The company also has thousands of machines around the world for its sales and marketing staff.

"Linux is the one that if we decide to change, and it looks like they will . . . they would go with," Crafton said.

Analyst Bill Claybrook at Aberdeen Group Inc. in Boston said he thinks that the future of Linux tied to how it's marketed and supported by large IT vendors, including IBM and Hewlett-Packard Co.

Though corporate IT departments are paring their expenses and looking for cheaper alternatives, "I don't see a wave of that happening" that directly benefits Linux, Claybrook said.

Still, he said, Microsoft licensing worries could play a role in the months ahead.

"There are a lot of people who would like to find a way of getting out from under the thumb of Microsoft," Claybrook said.

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