City sees the appeal of Linux

The New York financial community is increasingly adopting Linux to cut costs, and London's banks aren't far behind.

Two of the leading vendors of the open-source operating system have told Computing that the growing popularity of Linux in the US is spreading to the UK.

IBM says it has 10 potential users on each side of the Atlantic. HP says it is talking to seven London banks, has nine users already in New York, and another 10 contemplating a switch.

Some major finance companies have already made the move.

Credit Suisse First Boston (CSFB) recently announced plans to move its mission-critical application infrastructure onto Red Hat Linux, and online trader eTrade is migrating to open-source from its proprietary server platform.

UK interest has been stimulated by developments such as at CSFB, says HP senior strategist for Linux Bruce Perens.

'New York seems to be about a year ahead of uptake in UK as far as the financial markets are concerned,' he said. 'Bad economic times have been a factor driving customers to Linux. A couple of years ago people didn't care that they were paying more, but suddenly they do.'

The biggest growth area is number-crunching tasks traditionally done by expensive Unix systems, says IBM financial sector global Linux strategist Derek Duerden.

'The processor-intensive workload is where finance houses want to do a lot of analysis to give themselves a more competitive edge, or allow them to operate in a more informed way,' said Duerden.

'At the top level there is a huge amount of activity now. Some have gone public, like eTrade, but that's just the tip of the iceberg.'

IDC vice president Dan Kusnetzky says lower costs could lead to Linux clusters at every trader's desk.

'It would be too costly for each analyst to have a Unix system, but giving each a cluster of Linux machines is not very expensive,' he said.

But Meta Group programme director Ashim Pal says the cost of the platform is not the only consideration. 'The operating system is a relatively small part of the total cost of ownership. Purely focusing on the cost of the platform is deluded,' he said.