In perhaps the most significant alliance for any of the dozen or so Linux software companies, IBM announced it will offer the Red Hat Linux operating system on all of its new server and mainframe computers. The endorsement by the mighty IBM is almost certain to spark new interest throughout the industry in Linux-based solutions.

Until now, IBM offered Linux only on four server lines, most notably the Netfinity series of machines. The new line of Linux machines will be brand marketed as the "eServer" line of computers. IBM is mostly targeting Internet applications where Linux's low cost and high reliability make the software ideal for running Web and e-commerce sites.

"IBM is very focused on the customer and the customer is very focused on open standards and Linux right now," said IBM director of Linux solutions marketing Scott Handy. "This relationship represents a significant revenue opportunity for Red Hat," said company vice president of products and platforms Paul McNamara.

Investors, not expecting any significant sales from the deal in the near term, appeared as unimpressed with Linux as they have been for much of this year. Red Hat shares actually declined 31 cents on the announcement.

Red Hat also announced new software that bundle its Linux distribution with database and other small business application software from IBM. Handy said IBM expects the new servers and packages of software will help Linux to get accepted for more complicated networks and sites. He said IBM, which will jointly market and sell the new servers with Red Hat, is interested in helping Linux attain "the next phase of adoption."