Linux Looks Good On Server

But operating system's future on client remains cloudy.

The Linux revolution is turning into an evolution, with its prospects on the server and client splitting into two distinct paths of unequal fortune.

The disparity in the successes of Linux came to the fore last week when new TPC-H benchmarks showed that IBMs upcoming DB2 7.2 database running on Linux 2.4.3 outperformed Microsoft Corp.s SQL Server 2000 running on Windows 2000 in the 100GB database category.

But Linux on the client is not faring nearly as well. Eazel, a company working on an easy-to-use Linux desktop graphical interface and file manager, closed its doors last week after failing to raise a second round of funding.

The imbalance has less to do with the quality of the open-source desktop technology and far more to do with the fact that investors do not see a sustainable business model for commercial desktop open-source companies.

Eazels closure highlights the crisis facing the Linux desktop business. The fact that Linux holds less than a 2 percent share of the market for desktop systems last year has prompted financiers and investors to become increasingly reluctant to fund such ventures.

As Darin Adler, the former leader of Eazels Nautilus team and based in Los Angeles, aptly put it, "Linux on the desktop has not been compelling, and it remains unclear how long it will be before Linux gains widespread adoption on the desktop."

Al Gillen, an International Data Corp. analyst in Framingham, Mass., said that while the server market remains compelling for Linux, "I see no promising future for Linux on the desktop through 2005."

A Linux developer, who declined to be named, said Eazels failure to raise new capital centered on the fact that it went through about $11 million in venture capital, and all it had to show for it was a file manager.

LGP could not be reached for comment; Corel officials in Ottawa said the negotiations to sell its desktop distribution "have not gone as smoothly as we would have liked and are taking longer than we first thought they would."

The news on the server front is as good as the desktop news is bad, however. The TPC win signals that Linux is moving toward becoming a true mission-critical, enterprise-class system that can effectively compete with the Unix and Windows platforms.

That Linux has finally made it onto the business map in the area of database benchmarks is another indication of the ground it continues to break.

"The most impressive aspect of this benchmark is that Linux is capable of some serious computing," said a Linux user in San Diego. "Who would have thought a few years ago that we would have IBM DB2 clusters even thinking of running on Linux? The potential over the next few years is staggering." ´

LGP initially agreed to pay $5 million in cash for Corels Linux arm, also allowing Corel to retain 20 percent rights in the new company. But a source close to the negotiations said the price has been slashed to $1.5 million—and the deal is still not finalized.