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. Last Updated: 07/27/2016

High-Tech Companies Set to Cash In on Linux

OTTAWA -- There's a clash of technology cultures brewing as big business ponders ways of making money out of Linux, a free computer operating system that's taking a run at the all encompassing Windows program by Microsoft Corp.

Interest in Linux, which was developed by Linus Torvalds of Finland when he was a university student, has been heating up in the past six months as computer giants jump on a Linux bandwagon that has been zealously protected by software developers who want to maintain its free, and somewhat anarchic, spirit.

Linux has been distributed free over the Internet since 1991. It has slowly gathered steam as an alternative to Windows, which is installed on the majority of machines worldwide.

Now companies are scrambling to cash in on the increasing popularity of Linux, with a spate of initiatives announced by high-tech giants including Corel, Compaq, Dell, IBM, Intel and Hewlett-Packard.

All are readying a variety of hardware and specialized software designed to work with Linux.

The UNIX-like system works with servers that dish out files and services to other computers, called clients. Linux can be downloaded for free from the Internet or purchased in software packages that provide manuals and instructions.

Linux still represents a minor market. According to International Data Corp. figures, it holds a 16 percent share of the server market. Annual server sales of about $31 million compare with $2.4 billion for UNIX and $1.4 billion for Microsoft. Still, IDC expects Linux server sales to grow by 25 percent annually until 2003.

Business is working hard to get its foot in the Linux door, said Dan Kusnetzky, IDC director of operating environment research. "It's an attempt to steer the unsteerable," he said.

With no leader or organization, Linux runs counter to the business mind-set. And despite a corporate marketing push, Linux may eventually enter the mainstream due to work by developers modifying the system so it runs easier and better.

"It's a community - there is no leader, there is no single plan. In fact, if anything, you could say that Linux grows due to irritation," Kusnetzky said. "A developer gets irritated based upon something the software does or doesn't do, calls together a group of like-minded people and goes and solves it."

That's paid off for some. A volunteer project by a tiny operation called The Puffin Group in Ottawa, for example, recently attracted the attention of Hewlett-Packard.

Working for free to make Linux work with a group of Hewlett-Packard's high-end servers, Puffin ended up in partnership with the corporate giant, which supplied hardware and technical support, but no cash.

Revenue did follow, with paid work for consulting and software development, said Puffin co-founder Christopher Beard. The deal also attracted attention and business from other firms.

"Now that Linux has approached its critical mass, where it's usable by a larger number of people, it's caught the eye of corporations," Kusnetzky said.

Linux won't likely take over the world, he said, but it does have niches.

It should find favor with appliance servers, for example, or cheap consumer devices that run single functions and need inexpensive components that work well. Internet appliances and increasingly cheaper PCs are also a good fit for Linux.

What's next is anybody's guess.

"The Linux community is working very hard and they've looked at what are the things that are difficulties for Linux," Kusnetzky said. "They're attacking every single one of them."