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A window of opportunity for Linux

Two years ago, a bunch of big computer companies persuaded the Justice Department to sue Microsoft for crushing a fledgling competitor, Netscape. But now that the case is reaching its conclusion, the main beneficiary isn't likely to be the big guys--IBM, Apple, Sun Microsystems--or Netscape, now owned by America Online. If the Justice Department gets its way, the ultimate winner may be Linux.

Linux, an operating system available free online, has been a runaway success on the Internet, where it runs 30 percent of sites. But even its founder, Linus Torvalds, is disappointed at its puny 4 percent market share on desktop computers, the machines folks use at home and at the office. That's because Linux can't run the most popular software programs used with Windows, especially Microsoft Office, which includes Word and spreadsheet Excel. Without Office, Linux doesn't have a prayer of a chance on the desktop. But if a breakup does lead Office to develop a version for Linux, watch out.

Alternatives. Linux has already achieved surprising muscle, but only behind the scenes, running so-called servers--the hub computers that run networks or Web sites. Last year, it grew from 16 percent to 25 percent of the market for server operating systems. Its gains came at the expense of both Microsoft's Windows NT, which held steady at 38 percent, and big Unix-based systems offered by Sun, IBM, and Hewlett- Packard, which fell to 15 percent. "People looking at new alternatives are all moving to Linux," says Larry Augustin, CEO of VA Linux, a maker of Linux computers.

Linux's biggest draw is that it's open source software. Unlike proprietary software such as Windows, Linux can be tinkered with and customized without breaking any licensing agreement. If a bug pops up, you can post a note on the Internet and experienced programmers will fix it free. Windows can't be opened and altered. "Would you buy a car with the hood welded shut?" says Bob Young, chairman of the Linux purveyor, Red Hat. "We treat our customers like partners instead of victims." Red Hat's version of Linux is the most widely used, running 70 percent of Linux servers.

Linux has attracted an A+ cast of cheerleaders. Intel, known for its close ties with Windows, has nonetheless invested in several Linux startups. Compaq, Dell, IBM, and Hewlett-Packard all manufacture personal computers with Linux preinstalled. And IBM plans to offer Linux on all its platforms, including mainframes. "We very much view Linux as the evolution of the Internet," says Irving Wladawsky-Berger, IBM's vice president for technology and strategy. "You will see Linux running everything from a very sophisticated watch to supercomputers."

Ironically, beating Windows on the desktop is not the Holy Grail for most Linux executives. Instead, they want to dominate the faster- growing market for Web and Internet devices. "Windows is a legacy system. It won't go away, but it's not the platform of choice," says Ransom Love, CEO of Caldera Systems, a Linux service provider.

With or without the breakup, Linux devotees are confident that the future belongs to them.