Miracle Linux president sees more growth ahead

IDG News Service - Two years ago, Japanese Linux server operating system developer Miracle Linux Corp. decided it needed to better promote its local Linux distribution. It developed two aims, according to Miracle's president, Takeshi Sato.

One was to attack Red Hat Inc.'s dominance in the Japanese Linux market for enterprise servers, the other was to kick-start a pan-Asian fight-back against U.S. dominance of the global IT market, he said.

When Sato became president, on June 1, 2003, Miracle Linux had 23% of the Japanese market for server installations using Linux in comparison with Red Hat's 50%, Sato said, quoting estimates from Japan's Yano Research Institute Ltd.

In 2004, his company joined with China's Red Flag Software Co. to develop the Asianux Linux 1.0 distribution, which provides a common kernel, library and packages for server operating systems.

Asianux hit the region a year ago and is sold by Miracle Linux in Japan under its own brand name. To sell Asianux, Sato also gets help from Oracle Corporation Japan, which has a 58.5% stake in Miracle Linux. Oracle provides certification for Miracle's Linux products and offers them for sale with Oracle products.

Japan's growing Linux market and the support from Oracle appear to be paying dividends. From the start of this year until May, Miracle Linux doubled the number of new licenses it sold compared with the previous year, according to Sato.

The release of Asianux 2.0 in Japan this September may boost the company's business again as cost-conscious CIOs dump Unix in favor of Linux, he said.

But challenging Japan's Windows server market remains a dream, Sato said, in a recent interview with the IDG News Service. Following is an edited transcript.

What has changed for Miracle Linux over the past couple of years? In 2003, there were about 47,000 [total Linux] licenses in Japan. It's still a small market. At that time, uses were mainly for Internet infrastructure, things like file, print, Web and application servers. Miracle Linux's strength is in the business application area. Because we are a subsidiary of Oracle Japan, our users use Oracle with Miracle Linux. Red Hat has a very strong BTO [built-to-order] model, especially with global [independent software vendors] such as HP, IBM and Dell. In 2003, we decided to adopt the BTO model and have become very successful following the introduction of Asianux. A year ago, Veritas and BEA gave us certification. Our share has grown a little bit and Red Hat's share has also grown a little bit, but TurboLinux has declined because it can't