Panel of Wall Street IT execs says savings are spurring Linux adoption among financial service companies.
NEW YORKOne of the primary reasons financial service companies have adopted the Linux operating system is the savings it has brought, IT executives from Wall Street firms said at a panel at LinuxWorld here this week.
Discussing the topic "Linux on Wall Street: Practical experience implementing Linux in financial services," speakers pointed out that Linux is everywhere, driven by its total cost of ownership benefits and the ability Linux gives IT departments to innovate.
"TCO is king. If Windows was really a cheaper alternative and offered a more stable platform, we would not be able to sustain our arguments around Linux," said Robert Ryan, Linux product manager for JP Morgan Chase. "Linux ensures that the best-of-breed can win. In an open-source world, better technology has a better chance to succeed. Everyones prices have dropped because of Linux. All the proprietary system vendors have dropped their prices because of it."
But even though Linux has reduced prices, over time it will have to stand on its own, he said. "Linux will ultimately succeed or fail on its own merits," Ryan said.
Evan Bauer, former chief technology officer for Global Technology Infrastructure at Credit Suisse First Boston and now a consultant, agreed that Linux infrastructure first has to be sold on a TCO basis.
CSFB rolled out part of its trading platform on Linux, moving from proprietary RISC-based software. While CSFBs trading desk has made $20 million more because of increased trade flow, Bauer said he first had to sell Linux to senior management on its cost savings. That, in turn, facilitated a spike in trading revenue, he said.
Robert Lefowitz, the director of Merrill Lynchs technical architecture group, said that what makes Linux attractive is that its not tied to particular hardware. "Were finding great benefits to running Linux on [IBM] zSeries hardware, but the drawback is that much of the software we need is not available for the zSeries. We also like to be able to competitively bid for support and services, and the fact that source code is freely available to companies we do business with is helpful," he said.
Wall Street firms also want customized Linux builds, and they could put this out to bid among the Linux vendors and service companies. A free software platform also lets users pick and choose what elements and components they want, Lefowitz said.
"Having the source code available allows us to drive Linux toward convergence, but we are running more free software on Windows today than we are on Linux. Linux brought free software into the mainstream," he said.
But John Cislo, a vice president at JP Morgan Chase, cautioned that any new platform has to deliver core services, and the number one success factor for Linux is carefully identifying the right usage cases for introducing it to the organization.
When selecting a Linux distribution, the availability of third-party applications and tools for that distribution is a priority. Support for those applications also is critical. "We want a choice of vendors, we want to be able to take advantage of commodity hardware, and we do not want to be locked into proprietary software," Cislo said.
Linux still faces some challenges, the panel said. JP Morgan Chases Ryan said the "glue" that ties it together is the next challenge. "Things like the secure shell, Kerberos, and how does it live in an environment of AIX, Windows and Solaris. We have to live in the real world where there are things like Active Directory, and the support for that is not here yet.
"If Im going to drop it into my environment, I have to be sure that it is going to work and be supportable, otherwise that just isnt going to happen. The Achilles heel of Linux is that it risks getting oversold on the merits of openness and not the merits of it as an operating system," he said.
(EDITORS NOTE: The moderator of the panel pointed out that the views expressed represented the opinions of the speakers themselves and were not necessarily the views of the firms they work for.)
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 www.eweek.com.