Red Hat: Born on Wall Street and Here to Stay

Red Hat says Linux and open source have only scratched the surface on Wall Street and it is becoming increasingly expensive for proprietary vendors to compete.

NEW YORK—Red Hat said that the success of Linux on Wall Street is no fluke and that use of the open-source operating system and other components will only continue to grow as more users realize the benefits.

Speaking at the 2006 Linux/Open Source on Wall Street conference here on April 24, Erich Morisse, manager, vertical marketing strategy, financial services for Red Hat of Raleigh, N.C., said, "Red Hats current offerings were born right here on Wall Street. Financial services is known for adopting emerging technologies and our products were tested and proven here."

Indeed, "open source is no longer revolutionary on Wall Street," Morisse said. "Open source is used in all of the top financial services firms on Wall Street."

A big part of Linux and open-source softwares popularity is that "open source puts control back into the hands of individuals," Morisse said. "The economies of scale and risk reductions are passed on to the customer," he added.

Other reasons why open source works for enterprise customers include adherence to open standards, and other factors such as value, innovation, quality, choice and flexibility, Morisse said.

Moreover, Morisse said an operating system "is all well and good, but you need all the other pieces of the ecosystem" to make it work optimally.

He said Red Hat has a vast array of application vendors and hardware suppliers supporting the Red Hat Linux distribution.

Besides, "Red Hat itself is called an operating system, but its actually a platform," Morisse said. He noted that there are 1,500 different programs that come as part of Red Hat "that makes us a platform."

Red Hats recent acquisition of JBoss helps to improve that story, as Red Hat brings the popular JBoss open-source application server into its fold. However, Morisse said he was not prepared to talk about JBoss at the event.

Meanwhile, Morisse spent a bit of his time knocking proprietary operating systems and their vendors.

"Proprietary software vendors have huge fixed costs," he said. "Sun said it cost them $500 million to produce Solaris10 ... So what happens when you want to invest for the next version of the platform?"

Morisse said proprietary vendors present an operating system "like a black box…you have no insight into the way it works. How do you know its something you can trust? It increases your testing costs because you cant get into the guts. With these higher costs in testing, that black box starts to become a black hole for your resources."

/zimages/6/28571.gifClick here to read about Red Hats acquisition of JBoss. Click here to read more.

However, as opposed to the closed nature of proprietary systems, "Red Hat gives you early access to the technology" through efforts like the Fedora Project and Red Hats beta program that enables its customers to look at the guts of the Red Hat technology."

One Red Hat financial services customer offered his view on the Red Hat offerings. Jim Johanek, senior vice president of U.S. technology strategy for Amsterdam-based Euronext NV, said: "In a nutshell, performance, cost and scalability were the three most important factors … The technology is 30 times less expensive for the same amount of performance … Were getting 30 times more bang for our buck in moving over to Linux."

Meanwhile, one attendant at the conference who would only identify himself as an IT staffer for a large investment bank, said his company uses a lot of open-source software and he has had enough of hearing how Wall Street has adopted open-source technology and is more interested learning about user experiences now that they have been using open source for awhile.

"Im also hoping to see more conferences that enable us to delve more into the various individual [open-source] projects, like Spring and Hibernate," he said.

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