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Linux inches up corporate IT priority list

Chief information officers of some major U.S. companies say more businesses are choosing the open-source operating system as they face pressure to reduce costs.

HALF MOON BAY, Calif.--The chief information officers of some major U.S. companies say more businesses are choosing the Linux operating system as they face pressure to reduce costs.

Speaking on a panel at a venture capital conference here Wednesday, the CIO of clothing retailer Gap and a tech executive from Bank of America said they are among the Linux converts.

Topping Gap's list of priority technology projects is "anything touching Linux," company CIO Ken Harris said.

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Bank of America is taking the Linux plunge, said Ralph Ziegler, a managing director in the company's technology and operations unit. He urged the technology start-ups at the conference to develop tools to help companies manage and run their Linux systems, an area he identified as a big business opportunity. "Corporations are adopting it," Ziegler said. "It's open season for everyone."

In many cases, Linux is replacing Unix operating systems from Sun Microsystems and Hewlett-Packard, said Evan Bauer, a panelist and the former chief technology officer at Credit Suisse First Boston. Bauer, now an information technology adviser to financial services companies, estimates that more than 70 percent of new server-based applications used by large Wall Street banking firms are running on Linux.

Wednesday's comments offer anecdotal evidence that the draw of Linux and its open-source license model are proving irresistible to budget-conscious businesses despite ongoing intellectual property disputes. SCO Group, which is suing IBM for allegedly copying Unix code that SCO owns into Linux, said last month that it intends to charge Linux users Unix license fees and will start sending out invoices.

But a new report from market researcher IDC indicates that Microsoft's share of the server operating systems market continues to outpace that of Linux. According to the report, shipments of Microsoft's server operating systems grew from 50.5 percent of the market in 2001 to 55.1 percent last year. In the same period, shipments of Linux system software for servers grew to 23.1 percent of the market in 2002, compared to 22.4 percent the year before.