Intel to market Red Hat Linux

In a powerful blow to Microsoft, Intel said will include the Red Hat Linux operating system software with its Pentium and Xeon-based servers. Meanwhile, Microsoft said it has set a firm date for the launch of Windows 2000 February 17, 2000. Linux is a widely used operating system for servers that host Internet sites. Even Hotmail, the Microsoft e-mail service subsidiary in Sunnyvale, still runs most of its servers on Linux after Microsoft failed to convert the service to Windows NT. Red Hat leads the market of Linux distributors.

Intel plans to bundle the Red Hat Linux operating system on servers it supplies to Internet Service Providers. The Red Hat deal is a key component in Intel’s effort to increase the share of the Intel-based servers in the ISP sector, an area dominated by Sun Microsystems. Intel executives belief such servers represent a huge growth market opportunity and is still in an embryonic stage when compared to the expected Internet server demand in the next five to 10 years.

"A key part of our ISP channel program is to provide a full range of products and services and thus offer a large menu of choices for ISPs and their business customers,'' said Scott Richardson, general manager of Intel's communications and Internet server unit. "The Red Hat solution gives our global ISP sales force another strong option for these rapidly growing providers,'' he said.

The move is blow to Microsoft and its Windows 2000 operating system. Microsoft, from Bill Gates on down, has been downplaying Linux as a viable operating system in the business world. Microsoft even published an article on its Web site with a seemingly far-fetched claim that Windows NT is far more reliable than Linux. Intel’s move, on the other hand, appears a major vote of confidence in Linux.

Microsoft, meanwhile, said it hopes to finally launch the much-delayed Windows 2000 OS on February 17. Gates has said the Windows 2000 launch will be one of the company's most important, forming the foundation of all future operating systems and paving the way for the company to make deeper inroads into corporate computing.

But unlike NT, Windows 2000 is facing a new market situation, in which it has to compete with Unix and Linux operating systems on the same Intel-based hardware platform. With hardware cost out of the equation, the focus of purchase managers and systems administrators will increasingly shift towards reliability, scalability and security, areas where Microsoft has traditionally been weak.