Big Vendors Have Win-Win Strategy With Linux

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August 17, 2000 (6:24 PM EDT)

Big Vendors Have Win-Win Strategy With Linux

SAN JOSE, Calif. -- Major corporations joining the Linux love feast this week managed to quietly support their own agendas while boosting the operating system and its open-source contributors.

The LinuxWorld Conference and Expo, which ended Thursday, drew support from Hewlett-Packard Co. (stock: HWP), Palo Alto, Calif.; IBM Corp. (stock: IBM); and Sun Microsystems Inc. (stock: SUNW), Palo Alto.

The highest profile event in which the competitors walked arm in arm was the announcement of their participation in the Gnome Foundation, an open-source group that would steer development of a desktop user interface for Linux. Gnome competes with KDE, the second major Linux desktop GUI.

But the major vendors' praise for Gnome masks their own Linux strategies, which leverages the freeware and open-source community to sell more of their own proprietary technology.

"People point in one direction and walk in another," Dan Kusnetzky, industry analyst for International Data Corp., Framingham, Mass., said. "It's kind of like the way the crab walks, it faces forward, but walks sideways."

Sun, which makes a living off its Solaris operating system, appears to be walking sideways more than the rest.

"Sun has watched open source march along without them ... and seen IBM, HP, Compaq (stock: CPQ), and Dell (stock: DELL) take a lot of public attention with their Linux plans," Kusnetsky said. "To date, Sun has done little or nothing with Linux and has even taken some defensive actions."

For example, Sun recently lowered the cost of Solaris to zero for systems up to and including eight processors and began offering the operating system under license, letting customers modify the source code if they agree to give the changes back to Sun.

Unlike Sun, IBM and HP can embrace Linux, hoping that any reduction in sales of their own Unix-based operating systems will be outweighed by increases in sales of Linux-based hardware, software, and services.

In addition, the two companies get the marketing benefits of supporting open-source technology.

But Sun's core business remains workstations and servers running Solaris. Therefore, Sun has embraced open source with StarOffice, its suite of desktop applications similar to the Office suite from Microsoft Corp (stock: MSFT).

Sun officials have contributed StarOffice to the open-source community, which is expected to make it a part of Gnome.

At LinuxWorld, Sun announced that StarOffice would adopt Gnome's Bonobo component model, and that Gnome 2.0, scheduled for release in the first half of next year, would be the default desktop interface for Solaris.

Sun apparently hopes developers using Linux workstations will be more likely to migrate to Sun's more robust Ultra workstations, if they know they can move their applications over unchanged, Kusnetzky said.

Contributing StarOffice to the open-source community reduces the amount of development resources Sun has to contribute to advance the suite.

The Linux threat to Sun is real, if IDC projections are correct. The industry research firm believes Linux overall will grow annually at 24 percent to 2004, becoming the No. 2 client and server environment.

However, few experts expect Linux to take over the desktop of the traditional PC, where Microsoft built its business.

"Linux on the desktop is marginal," William Zachmann, analyst for the Meta Group, Stamford, Conn., said. "You have to be a dedicated lover of Linux or a dedicated hater of Microsoft to go that route."

However, there are client environments where the OS makes sense, such as cheap Internet appliances that mostly navigate the Web and manage e-mail, and scaled-down PCs used only within a large corporate environment.

In other LinuxWorld news, SuSE Linux AG (stock: SUSEX) of Germany announced that IBM would include the CD version of SuSE Linux 7.0 in Netfinity server models 1000, 3000 and 3500 M20 shipped in Europe through the end of the year. Under the deal, IBM also has the option of preloading the software into the servers.

TechWeb's Barbara Darrow contributed to this report.