Open-source software and operating systems are increasingly touted as a way for companies to take greater control of their IT environments, in the process controlling the cost and content of their operations. Yet it's clear that open source represents different things to different companies, depending on the company's size and the investments it has already made in information technology.
At a LinuxWorld event in New York on Wednesday, three companies laid out the different reasons and ways they've pursued open-source strategies.
E-Trade Financial Corp. was a star customer for Sun Microsystems technology in the 1990s but moved to open-source Linux on Intel-based servers beginning in 2001 in an effort to cut IT costs, said Joshua Levine, chief technology and operations officer for E-Trade Clearing LLC. Sun's 4500, 6500, and E10K servers, plus the Solaris operating system, had allowed E-Trade to consolidate its IT operations, but at too great a cost. When the online brokerage company needed to cut costs, IT infrastructure fell into the crosshairs. "We wanted to improve our operating margins," Levine said.
One obvious way to trim costs was a move to an Intel-based server architecture. As for the corresponding operating system, "we looked at Windows, but it would have been too expensive," Levine said. "Linux was the only other logical choice." The result was a series of $3,800 dual-processor Linux-based servers that could operate at twice the speed of a $250,000 Sun 6500 running 10 processors, Levine said. Sun of late has made a number of overtures--including offering its Solaris operating system running on lower-cost x86-based servers--designed in part to court Wall Street.
At about the same time E-Trade was making its move to Linux, Cendant Corp. was going through the process of migrating its airline fare-calculation and ticketing applications from a mainframe to a Unix platform and then to a Linux environment. The travel-services provider has saved about $100 million since the move to Linux, compared with what it would have cost to stay on the mainframe, said Robert Wiseman, chief technology officer for Cendant's travel-distribution services division. The company is still able to achieve "five nines" availability, which translates to about six minutes of downtime per year, he added. In fact, since June, the company has had no downtime, scheduled or unscheduled.
Cendant, whose mainframe operations process 7,000 transactions per second, didn't take its move to Linux lightly. "If [the servers] go down, we lose business," Wiseman said. "If our fare system goes down, United Airlines stops flying." Cendant manages United's airline reservation system.
Like Cendant, Citigroup Inc. moved to Linux as a replacement for an aging legacy system. Now the company relies in an IBM zSeries mainframe running IBM's DB2 database and S2 Systems' OpeN/2 enterprise payment software on top of SuSE Linux to automate transaction processing. When a consumer makes a purchase online, chances are it's coming through this system, Aaron Graves, a Citigroup senior VP, said at LinuxWorld.
Citigroup is looking at a move to a 64-bit Novell's SuSE Linux environment. Cendant is likewise considering 64-bit, a move that could include a transition from Red Hat Inc. to SuSE. "Linux's ability to let companies switch vendors is good," Wiseman said.
Cendant chose Red Hat because it was the top Linux distributor in the United States--a position Red Hat still holds, although Novell has made strides as a Linux vendor since acquiring SuSE Linux. Cost savings will continue to be a driver for Linux, but that doesn't mitigate the need for careful testing of Linux environments before they're placed in production, Wiseman said. This applies to other open-source applications as well.
Cendant also uses the open-source Apache Web server and Tomcat servlet container to run its CheapTickets.com operation.
Citigroup's Graves made it clear that Citigroup isn't interested in using any applications that lack vendor support. "Support for the Linux environment was our biggest concern," Graves said. "Vendor backing for the distribution was important."
For Linux and other open-source vendors to continue to succeed, they need to focus as much on the cost and quality of their support operations as their technology, E-Trade's Levine said. Support is likely to be a key differentiating factor among Linux providers in particular moving forward, given that they build atop the same Linux kernel and run on the same hardware.
Beyond Linux, E-Trade has retained consulting firms to help it evaluate open-source applications in a number of areas, including the JBoss application server and JSR, an open-source project that specifies API and semantics for temporary, in-memory caching of Java objects.