Small Arizona CU Cuts Processing Costs With Move To Linux System

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Karen Howe doesn't do Windows.

"We couldn't afford the services we offer if we had to go with the costs associated with a Microsoft or UNIX product," said the manager at $13-million Hospitality USA Credit Union.

Instead, last year Hospitality USA started using Linux to run core processing and seven other major systems, including general ledger, loan processing and report writing. The 5,300-member CU has been running a Linux-based homebanking application since 2001.

"With Linux, you're dealing with an operating system that's basically free," Howe explained. "And that creates a nice cost savings."

Anyone can download a free copy of Linux, although some supported enterprise editions can cost up to $1,000. Beyond that, Linux doesn't require per-user license fees, unlike Microsoft or UNIX.

"I didn't want software that required us to go with new software when our licenses expired," Howe continued. "Licensing costs are too high. I didn't want to have to choose between paying for upgrades or operating with problems caused by old software."

The CU's Linux-based programs run in-house on Tiger, a processing system provided by BSA Turnkey Corp. of San Antonio, Texas. BSA has more than 30 years' experience serving credit unions with systems that have simultaneously processed up to 700,000 members.

Last month, Glastonbury, Conn.-based Open Solutions Inc. acknowledged Linux's growing presence in the computing world when it announced it too would support Linux operating systems. Open Solutions provides data processing technology for community financial institutions.

Tiger Web Teller, BSA's homebanking application, includes account access, funds transfer, bill pay, and e-statements. Hospitality USA paid BSA one-time fees for programming and software, as well as monthly maintenance and broadband Internet connection fees.

Burke Cabaniss, president of BSA, started offering the Linux option on Tiger five years ago, once he discovered the system's benefits.

"We realized we had tremendous powers that we didn't have with the IBM mainframe," Cabaniss explained. "And in a Microsoft environment, I have to buy and license programs that will do only part of a job. I have to buy a few and somehow tie them together to get the job done properly.

"With Linux, we can access many free source programs through an Internet search engine," he continued. "I can then write direct interfaces that allow me to perform the functions l like.

"My job has changed to selecting and interfacing as opposed to writing every program" he added.

Cabaniss enjoys passing the savings to his clients. "These source programs are not only free to me as a developer, but they're free to my clients. And I don't have to make them pay licenses for the programs for each terminal."

Whereas Linux enjoys "great technical and capability advantages in comparison with other operating systems," Cabaniss said, the system suffers from weak marketing. "Business managers get their technical advice and knowledge almost exclusively from persons who sell products such as operating systems. Because their products are virtually free, Linux and the open systems community have very few sales persons."

Tiger, also offered for Windows- and UNIX-based systems, will be entirely Web-based this summer, Cabaniss added. "Think about that- with no software licenses, period."

For info on this story:

*Hospitality USA at

* BSA at

* Linux at

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