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Sun Launches Linux Product, Embracing Rival System to Please Clients

Sun Microsystems launches an entry-level-server strategy at the LinuxWorld Conference and Expo in San Francisco on Monday that will run both the Linux and Solaris operating systems on a standard Intel box.

As momentum builds for low-cost Linux servers on Wall Street, Sun Microsystems launched an entry-level-server strategy at the LinuxWorld Conference and Expo in San Francisco on Monday that will run both the Linux and Solaris operating systems on a standard Intel box.

Sun's new product -- called the LX 50 -- will run either Sun Linux 5.0 operating system on an Intel Pentium III, 1.4 Gigaherz processor box, or Solaris-8 Intel Platform Edition.

"It became more and more apparent to us that the customer base was interested in buying products from Sun because they view Sun as their trusted partner for Unix -- and Linux and Unix are very similar," says David Littlewood, director of worldwide financial services at Sun.

"(By) offering this joint Linux/Solaris proposition, which says you can use Solaris for your high-value, high-reliability solutions and use Linux for your low-end-edge servers, we'll provide a one-stop shop for both," adds Littlewood. Sun will provide software and support services to enable integration between the two such that "you can have an end-to-end architecture," adds Littlewood.

Sun announced two Wall Street customers that are considering the entry-level Linux servers -- Salomon Smith Barney and Reuters. The brokerage firm is working with B2Bits, a Sun partner, to run a low-cost FIX connection to institutions on Linux. B2Bits, a maker of FIX engines, developed its product in conjunction with Sun on Linux. "We're working with them on having pre-bundles available for FIX engines running on a Linux platform," explains Littlewood, who says low-cost FIX connectivity is one of the niche areas where entry-level Linux can be applied.

Linux servers are typically used for so-called "edge-of-network" applications -- caching servers, content-delivery solutions, firewalls, Web servers, computer farms or custom applications, says Bill Roth, Sun's group marketing manager, volume systems products.

The move represents a reversal for Sun, a provider of Unix workstations, whose chief executive officer and chairman Scott McNealy has made disparaging remarks about the free, open-source Linux operating system. Linux is a variation of the Unix operating system, but it can be downloaded for free from the Internet.

Despite some of these comments, Sun has been a supporter of the Linux movement for a long time, says Littlewood, who notes that Sun has done a lot of work to run Linux applications on Solaris without even recompiling. Sun also has a 70 percent market share in Linux-office-productivity software with its Star Office word-processing product.

Many say Sun has Star Office in a good position against Microsoft if it chooses to enter the Linux desktop market. But will this sway financial-services companies?"It is fighting the tide here," says TowerGroup analyst Dushyant Shahrawat. "They have recognized that they need to address the growing Linux market," adds the analyst. "It's going to send some ripples to the water, but if this is a ploy to attract large (financial-services) users that are dropping Unix, I don't know if this (platform) is going to hold them back," he adds.

Over the past six to 12 months, several leading Wall Street-brokerage houses have been migrating certain applications over to Linux from Solaris and NT. One primary example of that is Credit Suisse First Boston running Engenera's blade server -- a mainframe-based machine optimized for data centers -- that runs Linux.

Reuters, a Sun partner, is migrating its Reuters Market Data Services over to Linux for market-data distribution. Merrill Lynch is also reportedly a customer. In June, IBM, which has invested $1 billion overall in Linux, invested $1 million in its lower Manhattan offices to create a facility for demonstrating Linux to Wall Street.

Analysts say the trend threatens to encroach on sales of high-end Unix servers, where Sun is dominant. "Everybody is looking at Linux because it's much cheaper and a much more open environment. It is not really dominated by a vendor," comments TowerGroup's Shahrawat.

Sun dominates Wall Street's middle and back office with Solaris, on which highly scalable, highly available applications are operating. "This opens up an opportunity to go back down to the low-end of the market where it used to play," says Littlewood.

"There have been a lot of customers migrating their front-end Web servers and that has a lot to do with the x86-based server versus the higher-cost SPARC architecture," says Stacey Quandt, industry analyst, Giga Information Group. "It can be three to five times higher (in cost) depending on the actual server," she adds.

To make its offering more compelling, Sun is bundling applications, support and system-management tools with the product. In doing so, Sun is addressing three major pain points: lack of applications, lack of support and lack of management tools, says Roth.

In software, Sun is providing Java2 Standard Edition, version 1.2, Sun ONE active server pages, and support for the Sun Cobalt Control Station -- a management appliance that, through a Web-based interface, helps a firm to provision a network of machines with software, do software updates and update content on entry-level servers.

Going forward it will provide more of Sun ONE -- an architecture for building Web services -- including Sun ONE Directory server, Sun ONE Web server and Sun ONE Portal Server.

Prices will range from $2,795 for the low-end box up to $5,295 for the high-end box, says Roth, noting that Solaris and Linux are priced the same.

By giving customers a choice of the x86 architecture, analysts say there is a risk that Sun will cannibalize its high-end servers. "The challenge is do they want to cannibalize their Solaris/SPARC installed based with a commodity Linux product," says Quandt.

However, Sun's Littlewood doesn't see that happening for quite some time. "We really see the bulk of Linux purchases at the low-end, small one-two processor machines. Firms could use Linux servers in racks and provide scalability that way," he says. "You don't get the features that you get with Solaris with Linux so it isn't going to be as robust or as sophisticated, though you might be able to get away with it and some firms will look to do that." Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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