IBM scores coup at NYSE with Linux contract

IBM scores Linux coup at NYSE: Sun Microsystems loses contract

to supply servers that report buy and sell transactions

Financial Times; Aug 29, 2001


IBM, the computer group, yesterday announced that crucial parts of the New

York Stock Exchange’s computer operations were being transferred from Sun servers to IBM mainframes

running the Linux operating system. The move is a significant coup for the company’s mainframe

business as well as for Linux,

a free operating system that IBM has been championing in the corporate market,

but has so far been

limited to niche applications.

« This is a major endorsement of our Linux strategy.

This is the start of an important shift and underlines the fact that Linux

has become an industrial scale

operating system, » said Michael Nelson, director of internet technology and

strategy at IBM.

IBM has become the largest supporter of Linux, which it believes will be used

increasingly as additional features are added to the software. It is the fastest-growing operating system

and the leading challenger

to Microsoft’s Windows and Sun’s proprietary version of the Unix operating


Securities Industry Automation Corporation (SIAC), responsible for NYSE’s computer


yesterday revealed it was in the process of transferring the system that reports

all buy and sell

transactions to brokers and NYSE member firms. The application, called Artmail,

reports between

15-20m transactions a day. Artmail was previously running on about 180 Sun

Sparc servers.

Sun, based in Palo Alto, California, is the leader in the sale of Unix servers.

Its shares fell 5 per cent yesterday in early trading, partly pulled down

by a Goldman Sachs

earnings downgrade. Sun will hold a mid-quarter conference call today. IBM

has developed technology

that allows a mainframe to run « virtual servers ». Mr Nelson added: « Rather

than running hundreds

of servers, the applications can be run on a single machine. That presents

huge savings. » Tom Kraemer,

analyst at Merrill Lynch in New York, said: « This deal is part of IBM’s strategy

to commoditise the

server operating system market using Linux, and shift margins to semiconductors

and services. »

SIAC, a wholly-owned subsidiary of the NYSE and Amex exchanges, said a pilot

scheme was

started six months ago, and the system had been running for 30 days with 100

per cent reliability.

The company was now considering transferring its internal management reporting

system and

other applications to IBM machines, running Linux. « This system provides greater

reliability and

also allows us to add other applications. It’s scaleable, flexible and reliable, »

said Jerry Sztabnik,

director of middleware operations at SIAC. « All US stock exchanges depend on

SIAC to process

their trades, » said Steve Romano, senior vice president of SIAC. « For these

trading organisations,

downtime cannot be tolerated. »

Source: Copyright: The Financial Times Limited

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