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Linux firm aims at Microsoft in home networking

Red Hat is opening a new front in its war against Microsoft with a major initiative to power the devices that will join home networks to the Internet.

Linux company Red Hat is opening a new front in its war against Microsoft with a major initiative to power the devices that will join home networks to the Internet.

In the next three or four weeks, Red Hat expects to sign several deals with well-known partners to spread its version of the Linux operating system into so-called gateway networking devices, chief technology officer Michael Tiemann told CNET News.com in an interview.

The gateway device would connect home appliances, PCs and phones to high-speed digital subscriber line (DSL) or cable modem connections, he said. They also likely would include extra features beyond mere data sharing--for example, tying into services over the Internet or taking over functions that otherwise increase the cost of TV sets, he said.

The move marks the first major expansion of Red Hat's version of Linux outside its server stronghold. However, trying to enter the home networking market pits Red Hat not only against Microsoft's Windows, but also against other Linux companies such as Lineo.

"The competition is going to be pretty stiff in that particular product space," said Yankee Group analyst Karuna Uppal. "Microsoft hasn't come out and said they're building an operating system for a residential gateway, but that's a market they want to move into."

Numerous companies from across the high-tech industry--including entertainment, hardware, software and telecommunications businesses--are jockeying for prime positions. At stake is who gets to control a central device that will be able to connect millions of homes to the Net. In the future, analysts say that the networking appliance could centralize all communications in a home, including television, radio and the telephone.

Companies such as 2Wire, Next Level Communications and networking giant Cisco Systems unveiled gateway devices in January, said Kurt Scherf, an analyst at Parks Associates. These devices can handle phone calls, Net traffic and entertainment such as videos, he said. The devices connect to home computers using a variety of networking methods--phone wires, electric wires or wireless connections.

Linux is in some ways well suited for this home gateway market: It's got Internet capabilities built in and is comparatively reliable, inexpensive and customizable.

It will take some time before customers in homes or small offices see the merits of using gateway devices instead of a single PC, Scherf said.

"What these companies need to demonstrate to the consumer is why they're going to want a gateway separate from the PC," he added. "We just completed a study with 600 households that are broadband subscribers. Seventy-two percent of the households were either leaving their computer on for 24 hours of the day or during working hours."

But it's not always easy to connect more than one PC to a DSL or cable modem. Scherf said gateway makers will be able to attract customers by touting networking's numerous advantages: improved security, lighter workload on the PC, simpler networking, and the elimination of squabbling over who gets to use the phone line or Internet connection.

Tiemann declined to say which companies Red Hat is working with. "You will know them by name," he said.

Yankee Group's Uppal said the list of candidates includes communications CNET's Linux Center companies such as 3Com, cable and content companies such as America Online, and set-top box makers such as Scientific Atlanta or Motorola, which acquired General Instrument in September.

Some of these companies already have taken steps toward Linux. AOL and computer maker Gateway have unveiled a Linux-powered device to surf the Web. And Motorola has invested in Lineo.

Cisco's plans are a key unknown in the home networking future, Uppal said. "That's the big X factor, the question mark in this space," she added, noting that Cisco has a powerful position with its IOS operating system and deep penetration into the networking industry, but the company's intentions aren't clear.

Red Hat, like Lineo and several other companies, is trying to push Linux into "embedded" devices--computing equipment that usually has a strictly defined set of features and often a much less powerful hardware design than full-fledged computers.

Sun Microsystems also is interested in home gateways. In particular, it would like to house its Java software on the devices, a move that has been partly embraced by organizations such as the Open Services Gateway Initiative.

Regardless of who makes the gateways, they will catch on eventually, Uppal predicted. "A lot of people used to say the PC will be the central computer of a network. I don't see that to be the case."