Linux Will Arrive When OS/2 Departs
Loony as that may sound, the thought came to me a few weeks ago when IBM launched its new Branch Transformation Portfolio for the banking industry. The company describes it as a multichannel platform to tie all facets of a bank platform from the ATM network, the branch systems, call centers and the Web into a common architecture, something that's been lacking by a major vendor in the banking community. The platform is based on IBM hardware, WebSphere and Tivoli software. What's noteworthy about that is one-third of all systems running at bank locations run on OS/2. It's one of the few reasons IBM still supports it and releases occasional patches.
Remember back in the late 1980s when IBM and Microsoft were collaborating on OS/2, before the two split ways and the battle lines were drawn between OS/2 and Windows? Well, the new battle is between Linux and Windows, with the difference being no one considers it a winner-take-all conquest.
IBM has successfully maintained a strong presence in the banks because financial institutions were not interested in moving off of OS/2 or DOS-based systems. But now banks are starting to upgrade their decades-old systems, and OS/2 support is no longer a pre-requisite. Microsoft is already gaining traction. According to a report released last month by Celent Communications, a market research firm that covers the banking and financial-services industry, Microsoft is quickly gaining in the branches. For ATM machines alone, 12 percent now are based on Windows, up from 5 percent last year. Next year, 28 percent will be based on Windows, and in 2005, that number is forecast to jump to 65 percent.
Surely IBM is loathe to give up its share of the banks' business. According to TowerGroup, another market research firm that specializes in IT for financial services, banks of all sizes will spend $3.5 billion on technology this year and $4.1 billion in 2005. Because of the business challenges facing banks (I'll cover that in my next column), IBM is offering a significant breakthrough in branch-automation technology. It runs on both Linux and Windows, but IBM is pushing the former.
"We are fundamentally agnostic," says Mark Tempelmeyer, vice president of solutions technology in IBM's software group. But, he adds: "We hear over and over again from banks that efficiency, cost effectiveness, availability, reliance and security are critical. In every aspect we think Linux is a better OS to be able to deploy in that model."
Just to further make his case, he gives this zinger: "There are no viruses that have infiltrated Linux as they have with Windows."
That's all well and good, but the problem is that Linux is not yet up to the entire task of running all of these mission-critical applications, says TowerGroup analyst Jerry Silva. And it's Microsoft and its partners that are gaining in the banking community for now. To be sure, the battle is only beginning.
Bob Steele, a vice president at John Ryan, a systems integrator and IBM partner with a specialty in retail banking, talks less of the platform and more of the higher-level issue, noting his primary requirement is that solutions are able to integrate systems that are now in silos.
"To the extent that IBM is increasingly making that possible we are interested," Steele says.
But the key to Linux's growth is for more solution providers to jump on the bandwagon. There's definitely opportunity. I recently talked to a midsize customer who uses solution providers for everything in his shop except for Linux work, which is now in the early stages. The customer works with a major IBM business partner. When the customer asked the partner about its knowledge of Linux, the customer was told: "The only thing we've done with Linux is play Doom with it." So the customer opted to do it in-house and buy direct. Need I say more?
Others, like HP, admit they are only in the early stages of rolling out partner programs for its Linux offerings. One of the problems that vendors and partners have to overcome is the notion that Linux is supposed to be free, therefore customers don't want to pay for services around it. Well, that same argument was made years ago with the Internet, so certainly there's hope.
In the meantime, there will be continued leading indicators along the way that Linux is moving up the food chain. One, I maintain, will be when IBM pulls the plug on OS/2.