January 17, 2000

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New IBM Unit Seeks To Capitalize On Linux's Potential
But questions remain about vendor's strategy for unix

By Aaron Ricadela and Martin J. Garvey

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BM last week placed its Linux efforts under the control of its top enterprise systems executives to ensure that the increasingly popular operating system runs smoothly on the vendor's hardware. But industry watchers wonder how IBM will manage its various and evolving Unix platforms.

IBM unveiled a reorganization that places responsibility for its Linux strategy under senior VP Sam Palmisano, who reports directly to CEO Lou Gerstner. In a memo sent to Gerstner on Jan. 7, Palmisano wrote that Linux will "play a pivotal role" in meeting customers' demand for interoperable systems and heralds "another important shift in the technology world."

"Any vendor these days, especially a hardware vendor, needs to make sure its Linux strategy is in order, and it can't just be hand-waving-you need to have some meat behind your strategy," says Tony Iams, a senior analyst with D.H. Brown & Associates.

To capitalize on the growing reach of Linux, whose low cost and freely modifiable source code has made it popular for running Internet infrastructure applications and file and print services-especially among Internet service providers and online businesses-IBM has created a unit within its enterprise systems group to oversee all Unix and Linux efforts. Irving Wladawsky-Berger, VP of technology strategy, will manage the unit and report to Palmisano. Wladawsky-Berger, a 30-year IBM veteran, successfully launched the company's RS/6000 SP high-end server business in the early '90s, then headed IBM's Internet division. IBM dissolved the Internet division this month, saying a separate group was no longer necessary as E-business permeates every corner of the company's operations.

As Linux matures, IBM watchers wonder how the company will handle the platform alongside AIX, the IBM Unix variant that runs on its PowerPC RS/6000 servers, and Project Monterey, a version of Unix for the PowerPC and Intel's upcoming 64-bit CPUs that combine elements of AIX, SCO, and Sequent's Dynix. "Linux is the next-generation platform for

E-business, and IBM is repositioning itself to take advantage of that," says Stacey Quandt, an associate analyst at Giga Information Group. "But it makes Project Monterey all the more confusing, and down the road it will compete more directly with Linux." An IBM spokesman says the company plans to evolve AIX as its high-end platform with Monterey, positioning it as a step up from Linux.

Linux seems to fit squarely at the low end of IBM's portfolio. To advance Linux's appeal to large companies, the vendor plans to step up efforts to run Linux on its four core platforms-System/390, RS/6000, AS/400, and Netfinity-write middleware that enables interoperability between Linux servers and legacy systems; and develop scalability, availability, and other enhancements to the Linux kernel that IBM could license to other vendors. Managers working on Project Monterey will report to Wladawsky-Berger, who says, "You'll see us do a better job of making sure Linux interoperates with all of our existing systems."

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