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Linux hits Microsoft where it hurts

The rival operating system is gaining corporate credibility, but more importantly it can be obtained for free, or for a fairly low cost.

Microsoft has reason to be scared of Linux.

Although the Unix-like operating system was created by the free-wheeling efforts of hundreds of programmers across the Internet, Linux is acquiring the trappings that make it more appealing to corporate customers--for example, interest from major computer vendors and features such as 24-hour support hotlines.

But more importantly, Linux can be obtained for free or for a fairly low cost. And with sub-$2,000 servers coming to market from all the major vendors, saving $600 on the operating system could prove to be an attractive selling point, say analysts.

Price, in fact, may already be on Microsoft's mind. When rolling out Windows 2000, Brad Chase, vice president of Windows marketing, said that the company would offer a wider variety of licensing plans, a statement which has been interpreted by server executives to mean lower prices.

Compare the costs of a file and print server for a 25-person group using Linux or NT: NT Server has a street price of $809, including a license for 5 clients. Two more 10-client packs, at $1,129 apiece, brings the total to $3,067.

A copy of Linux from Red Hat--one of several companies that offer Linux support--costs $49.95, and the cost doesn't go up if clients have to use the server. Or, for that matter, if you want to install the same copy of Linux on another server, or five other servers, or 50 other servers.

And Linux lets you do the job with hardware that Microsoft and Intel have declared obsolete, said Dan Kusnetzky, an analyst at International Data Corporation.

There's more to operating systems than just the up-front costs, though. For example, training the system administrators typically makes up 50 to 60 percent of the cost of adding a new server, Kusnetzky said. That means that companies with Unix experience won't be deterred, but NT shops likely will find it cheaper to stick with Windows. Microsoft's server operating system, Windows NT, often gets selected because it was good enough to do the job but at far cheaper prices than Unix alternatives, he added.

For information technology personnel, the up-front cost of the operating system is a relatively minor component of the total cost of ownership of a system, a Microsoft spokesman said.

"Microsoft sees Linux as a competitor, and we see that as good for the market," the spokesman said. But Linux competes more with other Unix systems, the spokesman said. "It's unlikely someone would move from NT to Linux. It's more likely they'd move from a Unix-based system to a Linux-based system."

But Paul McNamara, vice president of business development at Red Hat, believes a competent NT system administrator will have little trouble figuring out how to map experience from NT to the command line. And the switch is downright easy for Unix system administrators.

Microsoft has support advantage
Support is another major expense, and there Microsoft has the advantage. While countless Linux users offer help over the Internet, Linux distributors have begun to catch up to Windows with pay-per-incident services and 24-hour hotlines.

Red Hat, for example, offers 10-incident help for $2,995. At Microsoft, though, technical support for 10 incidents costs $1,695.

There's more to a system than just the numbers, though. There's the reliability and availability of a system, and many analysts say that Unix and its ilk are far more robust and crash-proof than NT.

Microsoft, though, points to guarantees from Hewlett-Packard, Compaq, and Data General for NT servers that stay up and running 99.9 percent of the time.

Linux currently is showing up "way down the pecking order" for big companies' computer staffs, Kusnetzky said. Computer personnel in business units and workgroups are finding Linux good for tasks such as delivering Web pages with company policies over intranets.

"Snuck in the backdoor"
"Linux snuck in the backdoor, and corporate IT often doesn't know it's there," Kusnetzky said.

Linux likely will have a surge of support when the current crop of Linux-savvy students starts looking for jobs. These students have been trained in their computer science classes to play with Linux's source code, hacking the kernel and trying out new software ideas.

A similar phenomenon happened with Unix and, later, Windows, Kusnetzky said. "It seems to point to a successful, rosy future," he said.