Linux made lots of friends in its rise to be the darling software at the heart of a number of investment banks, not to mention a wide array of firms in other industries. But it's making a few enemies along the way. Among the angry is the SCO Group, which claims Linux includes code that violates its copyright.
SCO is now upping the ante by saying Linux and open-source software is a threat to national security and the American economy.
A letter from the SCO Group, published on the Internet by an open-source lobbying group called the Open Source and Industry Alliance (OSAIA), says the commoditizing influence of open-source software avoids export controls on commercial products. SCO has been battling Linux for the past year or so in the courts, suing IBM for allegedly contributing code to Linux derived from SCO's version of UNIX. SCO also claims Linux includes other code that violates its copyright.
SCO's letter, signed by Darl McBride, president and CEO, was sent to all 535 members of Congress. It says Linux threatens not just the United States' competitive position, but is a means for enemies-or nations placed on a "no sell" list by the government such as Libya and Iran-to build technology for military applications. By way of example, the letter suggests computer experts in a hostile nation such as North Korea could download Linux, use multi-processing capabilities "misappropriated" from Unix and, "in short order build a virtual supercomputer."
Linux creator Linus Torvalds disputes SCO's claims, and has publically said export controls apply to hardware and not software. He also downplays the notion of a hostile nation using Linux to build weapons of mass destruction.
Another Linux ally, Novell-a Linux supplier-says SCO does not even own the copyright in dispute. SCO has responded by filing a slander suit against Novell. OSAIA says SCO's attempt to lobby Congress against open-source software actually undermines its claim because the more people who are using it, the more people SCO can eventually collect money from if its claims are validated. The OSAIA also claims SCO is acting on behalf of Linux rival Microsoft, which has paid software licensing fees to SCO. Stowell denies those claims.
In an ugly turn whose connection to the dispute is unclear, Reuters reports MyDoom, a powerful Internet worm which recently infected hundreds of thousands of computers and corporate systems worldwide, was designed to attack the Web site of the SCO Group. The new worm, which is also called Norvarg or Shimgapi, is activated when recipients of an e-mail message open an infected attachment. Hit by what was reportedly the fastest-spreading worm ever, infected computers allowed attackers to gain unauthorized access and use the computer to attack SCO on the Internet.
The battles come as Linux continues to gain traction in parts of the financial services sector. Brokerage houses have been more active, though banks are still dragging their feet. While brokerages in some instances have moved enterprise-critical servers to Linux, banks are still limiting their use of Linux to ancillary functions like e-mail and file print servers. "Banks are just risk-averse," says Jeanne Capachin, research director of corporate banking at Financial Insights. "They need it proven to them before they will adopt it."
According to Financial Insights, the financial services market for Linux is likely to grow in the next three years. In 2003, the capital markets spent about $393 million on Linux implementation. Spending is expected to grow to $1.8 billion by 2007. By contrast, Capachin estimates banks spent less than $100 million on Linux in 2003, though their spending is likely to increase by a comparable percentage to the capital markets over the next four years.
Donie Lochan, vp of Cap Gemini Ernst & Young Financial Services and Wealth Management, says some financial institutions have reduced costs up to two-thirds by switching to Linux.
The cost of servers is significantly cheaper. According to Michael Haney, senior analyst for Celent Communications, a high-end server from Sun Microsystems might cost $250,000. In comparison, the least expensive Linux box is $4,000 or less. "The licensing of the operating system is free," Haney says. "What you may pay for other operating systems out there is significant."
Such an elementary economics lesson struck a chord with E*Trade, which began switching its servers to Linux in late 2001, when IBM and Hewlett-Packard announced separately that they would support the system.
Joshua S. Levine, president and chief technology officer of E*Trade Technologies, says the implementation saved the on-line financial services company $13 million in maintenance and licensing fees its first year, and he expects similar savings in subsequent years. In 2002, the on-line brokerage switched two thirds of its customer-facing Web site and computing platforms over to Linux. In 2003, it switched its crucial remaining database layer.
Linux was released to the general public about 10 years ago after a Finnish student, Linus Torvalds in Helsinki, wrote the source code. Torvalds stipulated that his code be offered free to anyone who wanted to use it. Since it's free, legions of programmers have added to it over the years, sharing new applications with each other in an open forum. n
