Tech firms set up Linux shop for City of London

AMSTERDAM: A group of computer companies have announced that they will open a Linux software and services shop in the City of London financial district, waving the prospect of 30 percent cost savings in front of investment banks and insurers eager to preserve cash.

The Linux centre where banks and insurers can learn about the free and open source Linux operating system, which competes with Microsoft's Windows and Sun's Solaris will be located at walking distance from the City's square mile. The venue will officially be opened on Tuesday, a day after insurance and banking stocks suffered further severe losses on global stock exchanges.

Several banks and insurers have been struggling with their diminishing cash positions that cover liabilities in the wake of collapsing equity markets in which they have invested.

The Dow Jones European insurance index was one of Europe's biggest sectoral losers on Monday, shedding 6.5 percent at 134.58 points around the close of trade. Europe's banks lost 5.9 percent.

The centre, headquartered at IBM's London offices on the river Thames, will also offer services from Linux service provider Red Hat, chip maker Intel, applications software maker Oracle, media software producer RealNetworks and storage management software maker Veritas. British computer resellers and services companies Computacenter and Morse also participate.

IBM's European head of Linux services for the financial sector, Andy Cash, said he expects 20 to 30 percent of all banks to work with Linux in a few years time.

Very few banks currently use Linux because they are concerned about the support and long-term viability of the open source platform. Linux, which like Sun's Solaris and Apple's OS X is an operating system based on the widely relied upon Unix architecture, was developed by the Finn Linus Torvalds and improved by volunteer software engineers on the Internet.

Because Linux software is free to use companies only need to spend money on installation and maintenance. "Linux typically offers a 30 percent price improvement on the systems banks use now," Cash said.

© Reuters