From Wintel to Lintel

Intel Corp. made a splash at ISPCON Fall '98 by announcing it would endorse the growth of Linux through an investment in one of largest Linux distributors. At that conference, Red Hat Software Inc. (Research Triangle Park, N.C., <A HREF="http://www.redhat.com/">www.redhat.com</A>) basked in the glow of the spotlight as Intel, Netscape Communications Corp. and a couple of venture capital firms all took minority equity positions in the company.

Intel Corp. made a splash at ISPCON Fall '98 by announcing it would endorse the growth of Linux through an investment in one of largest Linux distributors. At that conference, Red Hat Software Inc. (Research Triangle Park, N.C., www.redhat.com) basked in the glow of the spotlight as Intel, Netscape Communications Corp. and a couple of venture capital firms all took minority equity positions in the company.

The companies involved in the deal, including Red Hat, maintain this will have no effect on Intel's relationship with Microsoft Corp. "Microsoft has several multitudes more users than we do," observes Robert Young, president of Red Hat Software. "I have too much respect for Microsoft as a marketing organization to compete with them directly."

"Absolutely none," is Intel spokesperson Jane Rauckhorst's reaction to the question of whether this deal affects the Wintel relationship. "Basically, we are very focused on expanding our server business," says Rauckhorst. "We found that almost all of our customers have different types of operating systems running their networks."

Actually, some industry observers note that the move seems to underscore an effort by Intel to appear less platform-biased. "Intel's made it very clear for the past year, that they would rather we not use the term Wintel," quips Bob Sakakeeny, an analyst with the Aberdeen Group (Boston).

Sakakeeny says the agreement won't have any impact on the desktop but "there's always going to be the technical guys out there using Linux. [The deal] will affect the traditional Unix players on the server side."

"Nothing in this small equity investment indicates any change in the relationship between Intel and Microsoft," adds Ed Muth, enterprise group marketing manager for Microsoft. He says Intel's decision was simply vintage Intel: "Intel is a very business-oriented, practical company. One would imagine they looked at this as a way to increase the market share for their products. We respect and understand Intel's business model."

Some analysts have already prophesized that Linux will become the future platform for Web server management and NT will be left to manage data servers, but Muth argues that IIS already owns 54 percent of the Web server marketplace.

However, that data conflicts with data from a Web server survey published in September by Netcraft (Bath, England, www.netcraft.com/survey) that reported the Apache server -- which runs on numerous operating systems including Linux, Unix and Windows NT -- as leading the market with over a 51 percent share. Netcraft data shows Microsoft IIS follows with a 22 percent share of the market.

Venture capital firms Greylock and Benchmark Partners are taking positions in Red Hat as well. While not taking an equity stake, other companies that have expressed support of Red Hat’s Linux operating system include Oracle Corp., Informix Software Inc., Computer Associates Int'l Inc., Sybase Inc. and IBM Corp.

Red Hat also announced it is establishing an Enterprise Computing Division that will offer enterprise-grade products and services to support global, mission-critical applications.

Tom Schenk, systems administrator for Deja News Inc. (Austin, Texas, www.dejanews.com), says he was more excited by the announcement of the Enterprise Computing Division. Nevertheless, Schenk, who uses Linux exclusively, says what stands out about the investment deal is the Intel tag. "It is a good thing because it brings Linux notice and makes it more respectable in management's eyes," he says.

There's more support on the way for Linux. Earlier this month at Internet World in New York, Oracle Corp. announced immediate availability of Oracle8 and Oracle Application Server for the Linux operating system and the Apache Web server. Oracle also announced that developer licenses for Oracle8 and Oracle Application Server for Linux will be free to all developers using the Oracle Technology Network. So far, Oracle has already reported 20,000 Internet developer registrations in less than two weeks.

International Data Corp. (IDC, Framingham, Mass.) estimates between 7.5 million and 10 million copies of Linux are in use worldwide. IDC expects sales from the two top commercial Linux firms, Red Hat and Caldera Systems Inc. (Orem, Utah, www.caldera.com), to increase by 43 percent this year.