Intel, credit Linux for huge savings

By : |October 31, 2001 0

Linux has never made any Linux company any money. But the software appears
responsible for allowing to achieve its first quarterly profit since
its founding six years ago. And at Intel, executives credit a switch to Linux
for saving the company $200 million in operating expenses. said it was able to reduce third quarter technology expenses by $17
million (25 per cent of technology expenses) from a combination of declining
telecommunications costs and by shifting its back-end networking and online
server operations to the Linux-based operating system.

Linux saved Intel $200 million said Doug Busch, Intel’s vice president for
Information Technology. Bush said Intel eliminated expensive Unix servers with
proprietary Unix software and replaced them by cheaper Intel-based servers
running Linux software. Busch said it was easy to migrate to Linux because of
its similarities with Unix. The Linux servers are used in the engineering and
scientific departments of Intel. The company’s business lines, which rely on
accounting software and other office software, still use Microsoft’s Windows
2000 because of the lack of adequate business software on the Linux platform.

Linux is increasingly used to replace buggy and security problem-plagued
solutions from Microsoft and the more expensive Unix based alternatives from
Sun, HP. By implementing Linux corporations have a wide choice of hardware
solutions, since Linux run on Intel and other microprocessor platforms.

There are no license fees to pay and skilled network administrators with Linux
experience rarely, if ever, have to rely on paid Linux support services offered
by the companies that distribute Linux. Already Linux has taken control of 24
percent of the market for server and IDG projects Linux will remain the No. 2
server operating system behind Windows through 2005.

Amazon would not give specific on how Linux has been implemented and what it
replaced. But in the past, has relied heavily on Microsoft
technology. "We’ve always been pretty closed-mouthed about technology on
back-end stuff," said spokesman Bill Curry said.

Curry said the change to Linux was driven by Hewlett-Packard. "They’ve
really helped streamline the infrastructure, move us to Linux and build a
lasting cost improvement."

Amazon also uses Red Hat to use its software to process credit card transactions
securely. In 2000, Red Hat bought the Hell’s Kitchen company that provides such
services. The shift to Linux started in April when said it would
moving a "large portion" of its systems to Linux as part of a broader
plan to cut costs and nudge the money-losing company towards profitability. Bush
also credited Napster, the music sharing company and Linux for saving the
chipmaker tens of millions of dollars in telecommunications expenses.

Napster remains shut down as the firm has not been able to meet legal standards
for protecting recording studios against piracy of copyrighted songs. But the
company’s file swapping architecture has inspired Intel to set up a similar
service for distributing large multimedia computer files containing information
such as manuals or video messages to employees across
the globe.

Intel cannot afford to send such files from its Santa Clara headquarters to tens
of thousands of workers in facilities around the world using the Internet as
that would result in huge telecom bills.. Intel’s vice president for Information
Technology, Doug Busch said that he was "absolutely inspired" by
Napster when he and a team of engineers set out to develop a similar
peer-to-peer network file sharing system to allow employees to download certain
files from each other’s computers. "I couldn’t afford to send big files
over the wide area network (WAN). It didn’t fit into my budget. Now employees
just look for the file on a PC closest to theirs, which can be in the same
office. It’s a lot cheaper. It’s a lot faster."

The cost Intel incurs today using the peer-to-peer system is less than 1/10th of
what the company spent previously.

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