IBM revs up Linux business

Big Blue boasts five new Linux customers and says more than 3,000 of its consultants now have open-source skills--a 10-fold increase since 2001.

Ed Frauenheim Former Staff Writer, News
Ed Frauenheim covers employment trends, specializing in outsourcing, training and pay issues.
Ed Frauenheim
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IBM is pumping up its business with the penguin.

Big Blue will highlight five new customers using the Linux operating system on Monday at the LinuxWorld conference, as well as announce an expanded Linux practice.

IBM's new customers choosing to employ Linux will include online movie rental service Netflix and electronic trading systems provider NYFIX.

IBM's expanded practice includes a larger army of consultants able to work with open-source software such as Linux, in which the software source code is publicly available. More than 3,000 employees in IBM's services wing now have certified skills in open-source technologies, a 10-fold increase since 2001. IBM also is improving the ability of small and medium-size businesses to test Linux systems, and Big Blue is sweetening an incentive plan for partners that create Linux-based products for medium-size businesses using IBM software.

Despite SCO Group's lawsuit against IBM over Linux and its threats to other companies using the software, IBM's Linux-related business is going swimmingly, said Scott Penberthy, vice president of business development at IBM Global Services.

"We have customers every day that continue to embrace Linux," Penberthy said. He said the company's Linux-related business is surpassing expectations and suggested Linux interest is about to swell. "The tsunami of open source, it's definitely coming now," he said. "It's no longer a glimmer in someone's eye as it was 10 years ago. It's real, and it's real for business."

IBM has made a big bet on Linux. The company committed itself to spending $1 billion on Linux in 2001 and said it raked in $1.5 billion in Linux-related revenue in 2002.

But that Linux momentum has been called into question by SCO's actions. SCO, owner of key parts of the Unix intellectual property, claims that Unix code was illegally copied line by line into Linux and that companies such as IBM illegally transferred improvements made to Unix into Linux. SCO has said Linux users must pay the company for a Unix license or face possible legal action.

Big Blue has a habit of highlighting prominent Linux customers at LinuxWorld events. At a conference last January, for example, IBM boasted that companies such as clothing retailer L.L. Bean and financial services giant Salomon Smith Barney were Linux customers.

The other new IBM Linux customers to be announced Monday at a conference in San Francisco are online boat slip reservation system provider Marinalife, investment bank Credit Agricole Indosuez and Korean online university applications company Softbank Uway. IBM actually announced its customer win with Softbank Uway on July 10.

To help small and medium-size businesses interested in testing Linux-based systems, IBM will announce it has designed a IBM Linux Solutions Express Center in its Beaverton, Ore.-based Linux Competency Center. The express center simulates small and mid-size customers' computing infrastructure environment.

IBM's new business partner incentive program is called "Double Your Discount with Linux." Participants in the program will be eligible for up to 60 percent in discounts on IBM software--twice the existing incentive.