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Linux Starts to Find Home on Desktops

The Linux operating system, having made inroads into corporations' backroom server computers, is showing hints of inching into a much broader market: employees' personal computers.

The much-hyped notion that Linux would be viable software to run desktop and notebook PCs seemed dead on arrival a few years ago. But the idea is showing some new vital signs.

Chief information officers have experienced the cost savings that Linux has brought to their server computers, which do narrow and repetitive tasks such as data storage and serving up Web sites. Now some CIOs are taking new interest in installing Linux on workers' PCs as well, for certain narrow applications.

Auto maker PSA Peugeot CitroŽn last month said it will start using Linux on 20,000 of its workers' PCs. Novell Inc., which sells a version of Linux and is supplying it to Peugeot, says it has recently signed up several large U.S. financial institutions that are installing Linux on some employee PCs. Sales of Linux PCs are showing a "really nice uptick" at Novell, says Ronald Hovsepian, chief executive of Novell.

New-Factory Test

Last year, an internal study of TRW Automotive Inc.'s PC strategy found that Linux "looked like it was something we would want to pursue from a cost perspective," says TRW Chief Information Officer Joe Drouin. He says the auto-parts company may test Linux on PCs in Romania, Hungary or another country where it is building a factory.

First popularized in the late 1990s, Linux was touted initially by its boosters as a replacement for Microsoft Corp.'s Windows operating system and the Unix operating system. Like Windows and Unix, it runs the basic functions of a computer. In contrast to Microsoft's highly profitable software, however, Linux grew from a project at the University of Helsinki and was placed on the Internet to be used free of charge. Several companies, including Novell Inc. and Red Hat Inc., refined it and built businesses offering customers support and other services related to Linux.

The allure of desktop Linux is the low entry cost: A typical license for Linux from Novell is $50 a year per PC versus the $299 Microsoft charges for Windows to businesses that don't have a long-term contract with the software maker. (Contract customers, mostly large businesses, pay less than $299 for Windows; Microsoft charges $199 for an upgrade.)

World-wide Growth

Also, a Linux PC doesn't use Microsoft's Office, which has its own price. And companies willing to go without the support that comes from paid versions can install free versions of Linux.

Linux still goes into only a tiny proportion of the desktop and laptop PCs sold. But in a recent report, market researcher IDC said licenses of both free and purchased versions of Linux software going into PCs world-wide rose 20.8% in 2006 over the previous year and forecast that licenses will increase 30% this year over last. That compares with 10.5% growth in 2004, according to IDC.

Whether Linux gains a stronger footing in PCs depends partly on whether PC makers start supporting it more strongly. To date, neither Del Inc. nor Hewlett-Packard Co. have offered PCs preloaded with Linux. But Dell has been soliciting input from its customers to help guide its plans for Linux -- which some industry observers say could lead the company to start making Linux PCs. Today Dell will start a formal survey on its Web site to determine what Linux products and support customers want, says Bob Pearson, a Dell spokesman.

Custom Offering

"We're certainly listening to the comments very closely and trying to determine what we should be doing with the [Linux] community longer term," Mr. Pearson says.

H-P says it has recently signed deals -- on an ad hoc, custom basis -- to provide Linux PCs to large customers. Some industry observers expect H-P to detail further plans in coming months for supporting Linux on PCs, although an H-P spokeswoman said the company isn't ready to discuss future plans for Linux PCs.

Despite initial expectations by Linux promoters, few businesses were interested in using the operating system on PCs. They remained loyal to Microsoft's Windows for many reasons, including its support for Office and other business programs.

Cheaper Alternative

But Linux found strong success elsewhere: as a replacement for Unix, an operating system sold by Sun Microsystems Inc. and others that had run on specialized chips running servers. CIOs found that Linux, combined with machines using standard Intel Corp. chips, was often a much cheaper alternative to Unix machines.

As corporate-technology chiefs become more comfortable with Linux running on their servers, they are beginning to warm to the idea of installing Linux in PCs for workers who don't require most of the features offered by Windows and other Microsoft software, such as the Office suite of programs.

TRW's Linux PCs would possibly be used in "shared services" centers handling accounts receivables and other business functions that span TRW's operations, Mr. Drouin says. Workers in the centers "might not need the features of an Office 2007," he says.

Peugeot says Linux machines will be used by general office workers and engineers. And Novell says the financial institutions to which it has sold Linux are using it for retail banking, securities trading and other order-entry-related tasks.

While initial prices don't include the total cost of maintaining the software over the life of a PC -- training and support, for instance -- it's enough to have some companies taking a serious look at Linux. The cheaper initial cost of Linux may be a particular factor behind its growing use in developing countries.

In places such as China, Microsoft has made some progress curtailing piracy -- a change that could be spurring PC users to pick up Linux, avoiding both paying for Windows and the risk of being nabbed for illegal software. "That in some respects drives the adoption," says Al Gillen, an analyst at IDC.

So far, the clearest shift toward desktop Linux is happening in Asia, which "may turn out over time to be a pivotal market for Linux on the [PC] desktop," Mr. Gillen says. Shipments of Linux for PCs in Asia in 2005 caused a surge in overall Linux licenses that year, he says.

Windows' Grip

Almost no industry experts expect Linux to make much of a dent against Microsoft on the desktop and laptop any time soon. Windows is still in some 92% of the PCs sold each year, according to IDC. Microsoft could cement its grip on the PC further through a strategy of tying it more closely with its various types of server software, a move that adds new capabilities to Windows PCs.

Most businesses, meanwhile, are reluctant to leave the Microsoft camp for a still-nascent environment. Linux lacks the vast array of software available for Windows PCs and switching from an established Windows set-up can lead to other costs for information-technology managers, analysts say.

"When you boil it all down there still isn't a compelling alternative to the Microsoft infrastructure on the desktop," says Bill Whyman, an analyst at Precursor Advisors.

The State of Illinois in recently consolidated its IT systems onto Microsoft software -- and has no interest in using Linux, says Paul Campbell, director of the state's Central Management Services department. "We don't have time for science projects in state government," he says.