LinuxWorld: Savings, Stability Make Strong Business Case

By Peter Galli  |  Posted 2005-05-25 Print this article Print

Enterprise Linux users at the New York conference say their switch to the open-source operating system brought big cost savings and reliable security. But what are the risks?

NEW YORK—As several hundred of the Linux and open-source faithful gather for the two-day LinuxWorld Summit here, the message that Linux has not only come to Wall Street but has been embraced by it is resounding loud and clear. The sessions on Wednesday and Thursday focus primarily on the business case and security issues around the open-source operating system, both of which are areas of great interest to Wall Street and to the financial industry in general. Read more here about Linux coming to Wall Street.
As a panel of enterprise Linux users, primarily from the financial sector, took the stage Wednesday to talk about their Linux usage, the common thread was the huge cost savings and stability they achieved because of the switch.
Robert Wiseman, chief technology officer at Cendant Travel Distribution Services, which has more than 5,000 employees in 110 countries around the world, said that in the early 2000s, the company was planning to move from a mainframe environment to proprietary Unix. At that time, Linux was still regarded as immature, he said, "but we certainly dont regard it that way anymore." But Cendant, which owns brands such as Galileo International, Travelport, Travelwire, Cheap Tickets, Orbitz and, decided to examine the cost benefits of moving directly from the mainframe to Linux. The company found that the primary benefit came from the using the low-cost x86 hardware platform. "When we moved to Linux, we found that using the low-cost x86 hardware platform made our system run three times faster and was 90 percent cheaper than the mainframe using Unix had been," Wiseman said. "It also has the highest uptime of any system we have had: We have not had a single second of outage, either scheduled or unscheduled, since June 2004." Aaron Graves, a senior vice president at Citigroup Technologies Inc.s data center for technical services, said that while Citigroup had decided to stay on the mainframe, it had looked at Linux to bring distributed workloads into its mainframe hardware environment. "We were able to configure an environment where a Linux application was running and connecting to a DB2 database at the back end. We were able to configure multiple Linux instances across multiple mainframes and multiple databases, giving us a back-end Linux environment processing credit card transactions at a rate of between 90 and 120 transactions per second per Linux instance," he said. This had proven to be very reliable, Graves said, adding that Citigroup is getting good support from software vendors and is pushing other software vendors to port their applications to Linux, particularly Linux on the zSeries. Josh Levine, chief technology and operations officer at E-Trade Financial, said that in the early 2000s, after the dot-com bubble burst, the focus was on making money and improving operating margins. "At that time we were like a poster child for Sun," Levine said. "We went through server consolidation, and the idea was to keep getting bigger and more consolidated, but we needed to improve our margins. The only technology pricing that has been in a downward spiral is around the Intel market, which just keeps getting cheaper," he said. E-Trade wanted to tap into this Intel architecture, and in early 2001, the company looked at Microsoft Windows and realized that moving to that platform would be too much work, so it looked at what other operating systems were running on that platform, only to find that there was not much choice. Click here to read more about E-Trades server switch. "We started porting our applications to Linux and were surprised by how fast it was. We found it compelling and when you find something that compelling, you overcome all obstacles, and that is what we did," Levine said. On the issue of the potential risk factor in moving to Linux, Levine said there was a slight risk that some applications might not be able to be ported across, but that was more than offset by the value Linux brought. Cendants Wiesman said the company initially had been concerned about risk and had run three environments, Linux, Unix and the mainframe, for a while. There also had been some differences between Linux and Unix, but those were sorted out within a few weeks, he said. E-Trades Graves said the company faced a risk as it worked to understand how open source could be supported and what a support contract for this actually meant, as it was a different model. Check out eWEEK.coms for the latest open-source news, reviews and analysis.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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