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Linux Holds Key To Cutting SME Technology Costs(HKTDC Hong Kong Trade Services, Vol 01,2003)

Vol 1, 2003

IT & E-Commerce

Linux Holds Key To Cutting SME Technology Costs

Linux or Windows?


Linux Holds Key To Cutting SME Technology Costs

by Albert Chung
Chief Market Evangelist,
Sun Wah-Pearl Linux Training & Development Centre

Cute and cuddly: the Linux logo reflects the open platform's user-friendly approach to computer software

Rising operation costs are encouraging the development of Open Source technology in software applications for organisations of all shapes and sizes, from enterprises to government bodies.

One name prominent is Linux, a cheap and stable open platform gaining increasing popularity among users, especially in the US and on the Chinese mainland. It is also widely used by international organisations, as well as small and medium-sized enterprises.

What is an Open Source system?

Open Source system means a "free" software operating system, with its source code open to all, which can be installed and used free from payment of license fees. Furthermore, users can make their own modifications and developments according to individual needs, again without charge.

Linux is one such Open Source product that, as a "family member" of the Unix operating system, brings with it with the advantages of stability and security. It also offers many enterprises a competitive edge over the ubiquitous Microsoft Windows application.

Nowadays, when cutting costs is a major issue for every business, Linux can offer enterprises a low cost, highly efficient and reliable IT solution. In fact, Linux, with its advantages, is already threatening Microsoft's market leadership.

The Linux operating system can be used in a wide and ever-increasing number of fields, including personal computers, servers, IT home appliances with embedded systems and other related value-added applications.

This year, with the sophistication of related Chinese localisation products and other solutions, coupled with governmental and industrial support for Linux, a new wave of information technology can be expected.

Market trends for Linux servers

There is fierce competition between the Microsoft Windows operating system and Linux in the server market. Microsoft's products (including basic operating systems, network control and program design software) are renowned for their compatibility.

However, Microsoft has set more and more "rules and regulations" for its user configurations, increasing dissatisfaction among programmers and engineers who vote for "software freedom".

Linux's open source philosophy gives IT professionals more room to innovate and create, especially when it comes to security issues. This is one of the key reasons why Linux is gradually gaining popularity among programmers, whose support is a key factor for the future development of Linux.

Today, Linux is developing rapidly in the server market and many enterprises are already using it in this way. In addition, there is a wide range of application software for Linux, such as database, Internet and office software, development tools and games.

The amount of supporting software is also growing, leading industry observers to predict that, while Linux is now used mainly in the server territory, in one or two years its desktop applications will create a direct competitor to Microsoft Windows.

According to International Data Corporation (IDC) statistics, the world server market will grow from US$270m in 1999 to US$640m in 2004. IDC notes that Linux presently has 27% of the world market for server operating systems, while Microsoft enjoys a 41% share. However, Linux's Internet servers are generally recognised as being ahead of the rest of the market.

This is important, as the Internet will become the main platform of application systems and expansion and development of software systems will focus on server systems -implying that Linux has strong development potential in the Internet server market.

This prediction is backed by a report in PC magazine (November 2001), which found that Linux's file and printer-sharing solution - Samba -was better and faster than Microsoft's Win2000 in terms of throughput and response time.

Again, Linux is becoming increasingly simpler and easy to use for general users. Linux formerly required users to type commands in text mode, but many user interfaces have already been developed and are widely used today.

There are also similar user interfaces available for other Linux server solutions, such as Internet and email servers. For example, Linux's Samba file and printer sharing solution offers an attractive SWAT user interface, further increasing its appeal to large and small-scale users.

Linux applications for enterprises

Many leading enterprises are using Linux in different environments in order to cut costs during these recessionary times. For example, online bookshop Amazon.com stated in October 2002 that it had successfully saved US$1.7m in the first quarter of the year, thanks in part to its use of a Linux server operating system.

Other large enterprises, such as Hollywood's DreamWorks film studio and major financial organisations like HSBC, Merrill Lynch and JP Morgan Chase, are also eager to use Linux's highly efficient server solutions.

Morgan Stanley, for example, needs to link the computer systems of various departments in 52 cities around the world. Using the Linux Open Source system, it can obtain configuration files more easily and make modifications freely. If it had chosen to rely on monopolised software, it would have lost the "freedom" to modify. In addition, it would have to pay millions of dollars to buy commercial software.

New Zealand Air Freight has also agreed to use Linux for its email and file server solutions, and expects to save US$277,200 in license fees alone.

Firms such as these are further encouraged by the immense support Linux has received from major software companies around the world since 1998. As a result, IBM, Dell and Compaq have started to install Linux in their computer products, and to provide customers with related technical support. Not to be outdone, Apple has recently launched the LX50, its first server equipped with Linux.

Admittedly, Linux still lags behind Windows in some respects - such as GUI, developing tools, game software and equipment support - but it is making big progress and has several other advantages that enable it to challenge Windows. For example, the core of Sony's phenomenally successful PlayStation 2 console is Linux, allowing users to execute Linux system applications on the PS2 platform.

Linux obviously gives application software developers plenty of flexibility and convenience, but Linux's embedded operating system is an equally important part of the platform's appeal. This is reflected in such developments as Sharp's recent launch in the US of a new Zaurus SL-5500 model PDA, one of the key selling points of which is the application of Linux as the product's operating system.

Many big software and hardware manufacturers have invested enormously in the Linux operating system to develop different high-quality solutions for commercial uses, including Hewlett-Packard, IBM, Oracle, Apple, Intel, AMD, CA and SGI.

Countries in Europe, the US and Asia, including the Chinese mainland, are eager to advocate open source technology and actively encourage the development of Linux applications. This in turn creates a huge demand for IT staff well acquainted with, or professionally certified in, Linux technology.

Enterprises large and small are already looking for Linux professionals to cope with the challenges of the future and this trend will only continue to grow in the years ahead.

Sun Wah-Pearl Linux Training and Development Centre is the first internationally accredited organisation in Hong Kong to train Linux professionals and to develop Linux applications. It works with the Hong Kong Polytechnic University to provide professional training to individuals and enterprises and provides software development and resources centre support services. Sun Wah-Pearl's mission is to provide high-quality educational services to form a solid foundation in Greater China for Linux development. It is set up to promote the Linux open source philosophy, to increase Linux popularity in the region, and to raise market interest, awareness and acceptance of Linux.

Linux highlights

1. Linux is cheap and stable

2. Governmental support from the Chinese mainland, Asia, Europe and the US

3. Support from big software companies such as IBM, Hewlett-Packard and Oracle

4. Embedded Linux leads the market

5. Strong and increasing demand for Linux professionals

Linux or Windows?

Constant updates: Microsoft is always developing its Windows programme, providing a powerful argument for buying the Microsoft system from a business point of view

The Linux name has caught the attention of an increasing number of computer users in recent years as a viable option to the Microsoft platform. Linux stemmed from the proprietary Unix, a very well established, very secure and stable operating system. It also has the added benefit that it is "open source software" - meaning it is free. Microsoft, on the other hand, charges a licensing fee.

Users often tailor the freely distributed Linux to meet their particular requirements, something not possible with Microsoft. However, when comparing these two systems it is clear that the best deal often requires more consideration than merely the initial purchasing cost.

As Megatrend Technology Ltd director Tony Lam notes, very few people talk about Linux in a business environment. "The reason is that for Linux you really do need to have access to technical support. It is fine if you only want to use common PC features, such as email or fax, but it is still far away from being a self-running and self-supporting OS."

Lam says problems usually arise when installing a new printer or a new modem and there are compatibility problems, up-grading and general maintenance problems. "The Windows environment is so familiar that chances are there will be someone in the office able to sort out minor problems," he adds.

"From a business point of view the attractions of Linux are that it is cheap and free from licence hassles," continues Lam. "But that is not the only cost. Now everyone talks about total-cost of ownership (TOC) because you don't pay just to buy the software, but also to configure and maintain the system. In other words, what is wanted is an evolving and improving system."

Lam says that "while Microsoft Windows has its critics, at least Microsoft is always developing the program. For example, while professionals say the Windows OS is anything but efficient, Microsoft continues to improve it. This is a powerful argument for buying the Microsoft system from a business point of view."

He believes that while there are many sound arguments for using Linux as an alternative, when it comes to familiarity and availability there is no competition to Microsoft "at least at the desktop computer level".

Interestingly, while the basic, totally-solid Linux OS can be downloaded free of charge, or is available as a giveaway on CD with computer magazines, there are several to-be-paid-for versions on offer. These versions of Linux have proprietary names and include Caldera, Debian, Redhat, Slackware, SuSE and TurboLinux.

"The popular ones have an excellent graphical user interface (GUI) and one just has to get used to doing things a bit differently given that most people these days cut their PC-teeth on the Windows product," says Lam.

Unfortunately, each of the proprietary Linux systems appears to have its own shortcomings "because every time a product is developed it leaves it open to security holes and glitches". Further, customisation according to the brand name also means Linux loses its universality as each has its particular emphasis.

Nonetheless, corporate IT has started to embrace Linux in a big way. Mainly because of its stability, Linux has gained popularity with Internet Service Providers (ISPs) as the OS for hosting web servers. Governments - the Chinese mainland and India are recent examples - also use Linux.

As a product-development desktop, in telecommunications, engineering R&D, government services and higher education, for example, Linux machines are being used more and more.

Linux is also increasingly used for dedicated transactional desktops where data entry or information retrieval is the primary use of the machine. This includes customer relationship management and retail point of sale-purchase - for example, sales kiosks.

However, widespread adoption of Linux for end-user desktops at the expense of Microsoft Windows is not taking place. Sun Microsystem's StarOffice - the office suite of Linux applications that was formerly free and even now is still significantly cheaper than MS Office - is perhaps the fastest-growing alternative to Microsoft.

StarOffice contains word processing, spreadsheet, presentation, graphics and database capabilities, making it ideal for small businesses such as SMEs and leading Gartner Dataquest to anticipate StarOffice will corner 10% of the market for office suites by 2004. This prediction is likely the result of Microsoft's approach to licensing, which requires enterprises to purchase a maintenance agreement or pay full-price for future upgrades.

Gartner also surveyed workstation buyers to show Linux will gain 10% in terms of future deployment at the expense of Unix and Windows NT.

The other edge where Windows is doing better than Linux is in language support - viewing and inputting different languages such as Japanese, Korean, simplified and traditional Chinese, even Thai and Arabic. Windows 2000 and Office 2000 already had these features and Windows XP is even better.

"With Linux, some versions can view Chinese, for example, but if you want to add a third or fourth language you are going to have trouble. The features are there with Linux but in specialist areas, so it is not as good as Windows. It's not ready yet (at the desktop level)," says Lam.

"Apple Macintosh computers continue to be used in graphics design scenarios and are a favourite with designers. With a Linux or an NT server, tying in a Macintosh poses no particular problem for the IT engineer. In fact, by attaching a few Macintoshes (with OS X, Macs are Unix machines) with Microsoft Office to a Linux network, real business users of Excel will have their cake and eat it too," he states.

Big-name PC makers IBM, Dell Computer and Compaq, among others, are starting to introduce new models with the Linux OS installed, while Apple Computer has launched its first server using Linux. "It could be just a matter of time before we see a much better Linux OS desktop than at present," says Lam.

However Kevin Leung, product-marketing manager (Windows XP) for Microsoft in Hong Kong, believes Microsoft offers a better user experience. "Windows is a familiar and consistent interface, enabling Tablet PC (unique to Windows) and the best integration with (MS) Office, in addition to shorter task completion times, proved compatibility, and full support for XML web services."

Regarding costs, he says, "It is important to note that when customers buy Microsoft products, they value the benefits gained. They don't look at just the retail price, but rather at the value for money provided by the product."

Leung says a survey done in North America by IDC, the research institute, recently concluded that Microsoft Windows offered significant cost advantages. "The figures were 11-22% savings over a five-year period in areas such as network infrastructure, print serving, file serving, and security workloads."

Ultimately, therefore, the choice -as always when it comes to technology - comes down to operational requirements, personal preference and budget. One thing is certain, however - the battle for desktop supremacy between Microsoft and Linux has only just begun.


The Windows edge

Where does Windows clearly have a strong advantage over Linux?

  • Better user experience: familiar and consistent interface; enabling Tablet PC (unique to Windows); best integration with Office: shorter task completion times, proven compatibility, full support for XML web services.
  • More powerful: integrated and comprehensive mobility, digital media, collaboration technologies.
  • Largest number of applications: more than 4,000 applications tested by Microsoft with Windows XP, and thousands more available. Thousands of Internet Software Vendors (ISVs) and millions of developers partner with Microsoft to build integrated applications, saving customers development time.
  • Largest number of devices: 12,000-plus device drivers on the Windows XP Professional CD; thousands of certified device drivers for Windows 2000 Server; 41,000 devices submitted to Windows Hardware Quality Labs (WHQL).
  • Broader availability of services: more than 450,000 Microsoft Certified Systems Engineer (MCSE) professionals worldwide.
  • More training options: wide range of Microsoft certified training courses and Microsoft certified training providers.

Is Microsoft doing anything to reduce prices and make its products more competitive?

It is important to note that when customers buy Microsoft products, they value the benefits gained from it - they should not simply look at the individual retail price but value for money. In fact, a recent study from research institute IDC demonstrated that Windows offered significant cost advantages of 11-22% savings over a five year period in areas such as network infrastructure, print serving, file serving, and security workloads. Microsoft believes that its prices are fair and adequately reflect the phenomenal investment made every year in research and investment to make these cutting-edge technologies. (Microsoft is spending US$3.8bn every year in R&D to develop products.)

In addition, Microsoft does recognise the large number of SMEs in Hong Kong. With several licensing options to choose from, Microsoft can help these companies meet their present licensing needs while also leaving room for growth. Customers can either visit the MS website for information on volume licensing programs or contact Microsoft certified partners, who are experts on total solutions for those companies. Microsoft also offers special licensing programs for SME associations in Hong Kong as well as training in software asset management provided through various associations and chambers of commerce.

Is Windows XP the recommended desktop program for the Hong Kong SME?

Windows XP Professional is the operating system of choice for businesses of all sizes and for people who demand the most out of their computing experience. Windows XP Professional offers enterprise customers increased dependability, usability, security features and communications. In addition, it includes remote access, security, performance, manageability and multilingual features to help users improve productivity and connectivity, and work even smarter.

How does Microsoft's total cost of ownership compare with Linux in an SME environment?

IDC recently conducted a comprehensive study that evaluated the total cost of ownership (TCO) for Microsoft Windows and Linux server offerings. After collecting data from IT executives and managers at 104 North American companies in multiple industries, the research institute concluded that Microsoft Windows offered significant cost advantages of 11-22% savings over a five year period in areas such as network infrastructure, print serving, file serving, and security workloads.

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