Adopting open source software: the Linux wave is cresting--and it will change everything.

The vast majority of American CEOs have long accepted monopoly control over the software their companies use, something they would never tolerate else-where in their businesses. But 2005 is going to be the year when that finally changes. Why? Because viable open-source software based on Linux is now becoming widely available to corporate users, both at the server and the desktop level. Choice is returning to information technology. CEOs need to understand this so they can free their chief information officers from Microsoft's grip.

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Most CEOs have regarded Linux with suspicion, because it has the whiff of a guerrilla army, which it is. Linux is the best-known success of the open-source community, a loose association of roughly 1 million programmers all over the world who believe in choice. They provide their programming expertise, which adds up to over a decade of experience on average, free of charge.

Anyone with an Internet connection can download Linux. But users have to be sophisticated enough to install and administer this software, which is not an easy task. And CEOs have always wanted to know, "Who do I call in the middle of the night if something breaks?" Until recently, there hasn't been a compelling answer.

Now there is. Leading industry vendors such as Novell, IBM, Hewlett-Packard, Oracle and others have devoted significant resources to creating certainty and predictability around the constant motion that characterized the open source movement. How? In a nutshell, by making open source look and feel like something customers already know.

Early this year, Novell acquired one of the top commercial Linux distributions, SUSE LINUX. A Linux distribution is a combination of the Linux kernel--developed and maintained by an open-source group led by Linus Torvalds, the father of Linux--plus supplemental open-source packages on top of that kernel to deliver various services for customers. These range from Web browsing to management tools to multimedia features and more.

What Novell does is take several thousand open-source packages and assemble them into a usable whole. We make sure the programs are compatible and that there are no issues with intellectual property protection. We make sure the distribution works on all the leading enterprise hardware platforms from IBM, Dell, HP and Sun, and on leading chips from Intel and AMD. Then we maintain that resulting code for a five-year period, delivering patches and updates. Enterprises need this stability to plan. Finally, we provide the support and training you'd expect of any serious enterprise software offering.

We make money by doing this, to be sure, because we are providing a service. That's the business model for open source. But the net result is software for the corporation that, because there's no license fee, is much cheaper than what the dominant market player offers. Plus it's secure, it's supported and it's reliable. And you can run your applications--Oracle, SAP and more--on it.

Because it's open, with the code visible to all, Linux also gives customers more flexibility to solve one of the corporate sector's biggest nightmares: integrating different pieces of an enterprise that don't function well together. Any enterprise of significant size has built up a hodgepodge of systems and applications over the years that weren't designed to work together and that certainly didn't anticipate the Internet phenomenon. The polite phrase for this is a "heterogeneous environment." The reality is, integration challenges can be a financial and technical black hole. Linux and open source are going to significantly improve the way that information technology gets done.

Here are three examples of interesting open-source initiatives under way:

1. How companies write software. We're seeing fundamental changes in this. I know of one very large U.S. electronics company that put an internal software project into the open-source community and was able to tap the skills of several thousand programmers. This CEO lowered the company's risk and costs at the same time. It's true that the company ultimately had to give up ownership of that technology because the open-source community demands it. So it's not something a company would do with highly proprietary functions. But there are many kinds of software that don't need to be proprietary. There is no reason to waste money by building them by yourself.

2. The financial sector as an early adopter. The financial industry is perhaps the most aggressive user of Linux and open source. We like to think that's because those companies really know how to do cost-benefit analysis. But the bottom line is that technology is critical for finance--both in terms of maintaining always-on connectivity, as well as driving down costs. And Linux has proven its performance capabilities time and again in independent tests.

3. Inroads into retail. Given that the system requirements of retail store locations are fairly limited and well-defined, retail is one area with great potential for early Linux adoption. IBM and Novell have a combined retail solution offering that Circuit City and Pep Boys, among others, are deploying.

Does the success of Linux to date mean CEOs should tell their CIOs to run out and dump everything for Linux tomorrow? Not at all. But it does mean CEOs should be asking CIOs a series of questions about the next information technology infrastructure buys:

* Are there viable alternatives to the dominant vendor?

* Are there cheaper options?

* Will this increase or decrease our future flexibility?

* Does this improve our security?

* Will it support applications from leading partners?

* What about technical support?

* Am I protected against intellectual property challenges?

With Linux delivering favorable answers to these questions, companies gain new IT options. Linux can be additive. If you determine you need additional infrastructure, add Linux. It can replace costly existing deployments. If you're shifting off of proprietary UNIX or replacing desktops, consider a Linux option. Try introducing open source in stages, or to different parts of the business. Workers in a call center and mobile workers like airline employees or salespeople simply don't need all the bells and whistles (and the expense) of a Windows desktop. A dependable, Linux-based machine with a browser, word processing, messaging and scheduling is enough. We at Novell are so confident in Linux that we're moving our entire work force to Linux desktops. We have canceled our maintenance and upgrade agreements for the Microsoft Office suite and Microsoft operating systems.

Open source is not the answer to all problems. The future of IT will be a "mixed-source" world. Novell will continue to offer our proprietary networking technologies that run on top of Linux, but we'll certainly encourage our customers to evaluate and deploy open-source products for platform and core infrastructure.

As open source keeps working its way up the ladder, we will have to continue to move our own software rapidly upward to stay ahead of the curve. That's the challenge all software vendors face, and most--Novell, Sun, Oracle, Computer Associates, SAP--are trying to adapt. Software vendors sticking to an old, solely proprietary model will be hard-pressed to compete.

In the long run, the most important impact of open source is that it shifts power from vendors to customers. The technology "lock in" will disappear. Not surprisingly, the company with the most to lose is trying to sow fear, uncertainty and doubt--a.k.a., the "FUD" factor--about Linux. But, to date, it has no real strategy to respond. The situation is reminiscent of AT & T and IBM decades ago. AT & T couldn't escape its lock-in strategy. IBM showed that it is possible to escape. Today's mighty gorilla, Microsoft, is facing an army of open-source guerrillas. And those guerrillas are getting stronger.

Jack Messman is CEO of Novell, based in Waltham, Mass.