E-Trade Taps Linux For New Web Site - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

12:57 PM

E-Trade Taps Linux For New Web Site

Online broker expects big savings, a must in the tight economy

When E-Trade launches its beefy new Web site this week, it will throw the switch on one of the most high-profile proving grounds yet for Linux. To power the site, the cornerstone of E-Trade's online trading business, it's ditching expensive Unix systems from Sun Microsystems in favor of Linux-powered IBM Intel-based servers. E-Trade says it could eventually save millions of dollars as a result of the move.

Saving money by using what is essentially a free operating system has for years drawn academic and scientific users to Linux. But until recently, many business users shunned the software because of reliability and security concerns. Now, tight IT budgets and support commitments from major vendors have companies taking a second look.

Linux will power virtually all of E-Trade's customer-facing Web sites, says chief technology officer Josh Levine. Analysts say the decision could pave the way for more big businesses to adopt the software. "E-Trade has always been on the cutting edge, so this is a huge endorsement for Linux," Forrester Research's Laura Koetzle says. But others say Linux requires learning a whole new skill set, especially for Windows shops not versed in Unix. "You'd have to factor that in to any cost savings," says Glenn Bonner, CIO at MGM Mirage in Las Vegas.

That wasn't a concern for E-Trade, which is moving off Sun Solaris. "We were looking for the hardware manufacturers to support it, patch it, run it, and be accountable," Levine says. Cradle-to-grave Linux support from a major vendor such as IBM was crucial, but the low cost of buying and maintaining Linux systems was most attractive, he says. "It's going to be almost 30 times cheaper to run and maintain" than Sun systems. The switch to Linux may take a year.

E-Trade's fortunes sank last year when the stock market bubble burst. Its 2001 revenue fell 5% to $2.06 billion, and it reported a net loss of $270.8 million, compared with net income of $27.8 million the year before. That prompted it to slash technology-development expenses by 37% in the first nine months of 2001, according to a third-quarter SEC filing.

No problem, Levine says. The money E-Trade saves with Linux will let it get closer to customers via new CRM initiatives without blowing the tech budget.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
10 Ways to Prepare Your IT Organization for the Next Crisis
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/20/2020
IT Spending Forecast: Unfortunately, It's Going to Hurt
Jessica Davis, Senior Editor, Enterprise Apps,  5/15/2020
Helping Developers and Enterprises Answer the Skills Dilemma
Joao-Pierre S. Ruth, Senior Writer,  5/19/2020
Register for InformationWeek Newsletters
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll