By Peter Henderson and Lisa Baertlein

SAN FRANCISCO: Linux was created as the people's software, free and open for everyone to use, in an attempt to thwart the commercialization of technology. But now the decade-old operating system is getting as corporate as button-down shirts and PowerPoint presentations.

One in five servers, computers that handle Internet traffic and corporate networks, ran on Linux among those sold last year, and the software is expected to gain market share. The economic downturn has been brutal toward dot-coms, many of which have disappeared. But Linux, closely associated with Internet start-ups like Yahoo! and Amazon.com, is more than just surviving. It's becoming a player, gaining favor with budget-conscious, old-line companies drawn by its performance improvements and lack of licensing costs.

Tech giants such as International Business Machines, Oracle Corporation and Hewlett-Packard Co. all back the system. Linux users spent only $80 million on the software, less than one percent of the amount spent on all operating systems for all computers, even though it's widely used, researchers at International Data Corp. reported. At a recent computer industry gathering of Linux users, pony-tailed men in T-shirts mingled with executives in short-sleeved golf shirts emblazoned with corporate logos.

It was a scene that the Linux geeks would rather have avoided a few years back. But the growth of the software has given them a new standing. The designer-suit clad billionaire, Oracle CEO Larry Ellison, was among those paying homage to Linux. "Linux has been the province of computer hackers, computer scientists and universities. Now, I'm afraid, in a couple years you will have people here with suits on," said Ellison, one of Silicon Valley's richest and best-dressed executives.

Developers often write "free speech" software -- software not controlled by a corporation -- using Linux. Thus, Linux paves the way for using low- to no-cost substitutes for expensive programs such as corporate e-mail managers. After a stagnant 2001, Linux sales are expected to grow fast as corporations accept that they can get cost savings without sacrificing reliability, at least for some tasks.

The change was clear this month in San Francisco at the twice-yearly LinuxWorld, the premier meeting place for those eager to talk software coding strategies. An exhibit hall once dominated by big booths from obscure Linux distributors instead was filled with mainstream tech names like IBM, Hewlett-Packard, Intel Corp. and AMD Inc. And, in a small booth in the back, one could even find Microsoft, the king of the brand-name operating systems.

"Wall Street is going for Linux in a big way," said Oracle's Ellison, who often compares technology trends to those seen in high-fashion. Once, million-dollar server computers from Sun Microsystems Inc. were fashionable for dot-coms with big plans, but Sun, known for sticking to its own technology, joined the Linux fray this month with a knock-off Linux machine using an Intel chip for under $3,000.

Chris Grams, a marketing manager at the old-guard Linux company Red Hat Inc., was stunned that business types had begun stopping by his booth to kick the tires. Few interested in buying software had dropped by at past shows. "It's less shorts, T-shirts and baseball caps and more real IT (information technology) guys," he said.

IBM's head of global services, Doug Elix, gave a keynote address filled with videotaped testimonials from customers that had the infomercial air of most big company trade show presentations. IBM's embrace of Linux a few years ago sounded a starter's pistol shot in the big guns' acceptance of the upstart "open" system. This year's LinuxWorld seemed to mark a turning point in big business' public embrace of the upstart software. Elix suggested that now, it's time for the Linux community to change, too. It's time for a shift toward driving "to business value."

But Matt Taggart, who works at Hewlett-Packard but is a devotee of Linux says the transition might be difficult. Like many other open source backers, he volunteers his time to write code to build Debian, a venerable version of Linux. Taggart's happy to see the corporate support growing, but he says not every open source is so accepting of the newcomers at the LinuxWorld gathering. "A lot of people are bothered by the business focus and they just don't bother to show," Taggart said.

(C) Reuters Ltd.