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Linux grabs big win with Reuters

Reuters will announce plans Thursday to bring its financial information software to Linux in conjunction with Red Hat, Intel and Hewlett-Packard, sources say.

Reuters will announce plans Thursday to bring its financial information software to Linux in conjunction with Red Hat, Intel and Hewlett-Packard, sources said, a major achievement for the comparatively young open-source operating system.

Morgan Stanley will be one among other customers using the software, sources familiar with the project said. Red Hat, the leading seller of the Linux operating system, announced in March that Morgan Stanley was a customer.

The software involved is Reuters Market Data System (RMDS), used by financial services personnel such as stock traders to retrieve and digest financial statistics and news. The software runs on both workstations and servers.

Unix computers--chiefly from Sun Microsystems--have been popular among these customers. Intel and the PC community, however, have dedicated themselves to ousting these systems with less expensive computers made of PC components and Linux or Windows. Red Hat, meanwhile, has emerged as one of the chief advocates of Linux in corporations, and its biggest marketing push has been to replace Unix.

Red Hat, Intel and HP declined to comment. Reuters didn't respond to e-mail seeking comment.

As alternatives go, Linux also enjoys inherent appeal because it's a close relative to versions of Unix such as Sun's Solaris, HP's HP-UX, and IBM's AIX. Translating software from Unix to Linux is much simpler than from Unix to Windows.

Financial services customers, punished by a down economy, are looking for ways to cut costs, and Linux systems often are less expensive than Unix workstations because they can take advantage of the cheaper hardware costs in the Intel computer realm.

Sun, the top dog of the Unix server and workstation markets and a major force in financial services, is working aggressively to keep its Unix computers competitively priced but in February decided to embrace Linux.

Sun Blade 2000 workstations cost about $11,000 for a one-processor model with dual-processor capability, though earlier systems with the older UltraSparc II processor cost $1,000 for a bare-bones system with little memory and comparatively primitive graphics abilities.

HP's dual-processor x4000 workstation, with one Xeon processor and 1GB memory, costs $5,800, while lower-end HP workstations cost $1,125.

Reuters Chief Technology Officer Mike Sayers plans to announce the deal along with Peter Blackmore, head of HP's server and high-end hardware group, and Mike Evans, vice president of business development at Red Hat. The announcement comes at the end of the Strategic Directions 2002 conference sponsored by Reuters and Tibco in San Francisco on Thursday.

The deal is a further indication of Linux's gradual maturity into a "reasonable and effective" product, said Illuminata analyst Jonathan Eunice, pointing also to Credit Suisse First Boston's choice to use Linux servers for its financial software.

Reuters will bring the software to Linux running on HP workstations using Intel's Xeon and Itanium 2 processors. The company has been working on the project for months, sources said. The deal with Reuters was forged with Compaq Computer; HP inherited the arrangement through its merger with Compaq, sources said.

RMDS is used to integrate and distribute information such as market data provided by Reuters' Triarch system and Tibco's Market Data Distribution System. It can be modified in such a way that companies' in-house software can tap into its features.