Wall Street Gaining Respect for Linux

Panel of Wall Street IT execs says savings are spurring Linux adoption among financial service companies.

NEW YORK—One 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.)