The Business Case for Linux

Computerworld - When Cendant Corp.'s Travel Distribution Services (TDS) division considered shifting its airline-fare system to Linux on Intel-based servers, the IT department couldn't simply flip the switch. The system handles 700 transactions per second in the course of processing millions of fares from more than 500 airlines around the world. So the IT team set aside a few months to do a careful analysis of the business case.

Now that Linux is more commonly viewed as a mainstream option for mission-critical functions, IT managers are increasingly evaluating the open-source operating system with the same due diligence with which they compare commercial offerings, according to industry analysts.

"It's not a science project anymore," says Julie Giera, an analyst at Forrester Research Inc. "At this point, Linux shouldn't be different than any other commercial software package you buy. The rules should be the same. The level of scrutiny should be the same, and the process for approval should be the same."

A key first step is establishing the criteria by which Linux will be judged. Enterprise Linux use has concentrated on the server, and decisions are generally made in concert with moves to cheaper hardware. So the business case is usually built for the hardware and the software operating system at the same time.

Two years ago, Chicago Mercantile Exchange Inc. (CME) was paying $20,000 to $40,000 for each of its Sun Microsystems Inc. servers running Solaris, according to Joe Panfil, the company's director of enterprise technology. When the CME needed to add capacity, the IT team was anxious to see if it could reduce the server costs.

Linux servers were priced at about $3,000 apiece, and a Red Hat Inc. support subscription tacked on another $400 per box, Panfil says. Even though the operating system can be downloaded for free, serious users typically don't want to risk running Linux without a support contract, especially if they're running mission-critical applications on it.

But cost wasn't the sole metric in the business case, particularly after Sun began to drop its server prices. The CME had to be sure that its critical third-party software products—Tibco Software Inc.'s middleware, BEA Systems Inc.'s WebLogic application server and Oracle databases—were certified to run on Linux, Panfil says.

Transaction speed was another key driver. The CME makes money based on the number of trades it can process, so every millisecond it shaves off the round-trip trading time counts.

But none of that would matter if the system didn't run reliably on Linux. Internally developed electronic trading, clearing and regulatory applications needed to be ported to Linux, and developers needed training to write code optimized for Linux.