Wall Street becoming Linux stronghold

Though open source licensing still a concern for some

NEW YORK -- Wall Street firms increasingly are buying into Linux, but some still need convincing that open source licensing and support models won't make using the technology more trouble than its worth.

NEW YORK -- Wall Street firms increasingly are buying into Linux, but some still need convincing that open source licensing and support models won't make using the technology more trouble than it's worth.

Linux providers, speaking this week at the Securities Industry and Financial Markets Association (SIFMA) conference in New York City, stated their cases that Wall Street firms have nothing to fear about diving into open source. Red Hat and Novell argued that's especially true now that specialized Real Time Linux has been developed that meets strict low-latency and messaging requirements of brokerages and trading firms.

"There's a strong business case for Linux as an alternative to Microsoft or Unix derivatives," said Roger Levy, senior vice president and general manager of open platform solutions at Novell, which late last year released what it calls SUSE Enterprise Real Time 10 specifically for use in organizations that have millions or billions of dollars at stake based on how quickly they can complete trades.

In addition, Levy said Novell has released the alpha version of SUSE Studio toolkit for "mass customization" of Linux, adding this is "something a proprietary systems vendor would never do."

Chart showing Linux becoming more prevalent at Walll Street firms.

Red Hat, which last month celebrated news that the New York Stock Exchange (NYSE) and its international subsidiaries were adopting Red Hat Enterprise Linux and dumping Sun's Solaris, also has a Real-Time Linux version. Its Red Hat Enterprise MRG uses the Advanced Message Queuing Protocol developed by financial institutions JP Morgan Chase Bank and Credit Suisse with contributions from Cisco, Red Hat, Novell and other high-tech firms.

"This is about not just being fast but guaranteed-to-happen within a certain window," said Michael Tiemann, vice president of open source affairs at Red Hat.

But even as the Wall Street crowd increasingly puts its money on Linux — market watcher Tabb Group estimates that Linux adoption among the 14 biggest investment firms this year will reach more than 72% of the installed operating server base vs. 60% in 2006 — it's clear concerns linger about the licensing model. That model requires users return changes to the open source community under certain circumstances, a touchy subject for companies that are battling to accelerate their business processes.

Sun Microsystems, which now has an open source version of Solaris called OpenSolaris, is addressing such concerns by letting technology managers know that it doesn't make the demand to re-contribute changes. "Our business model is very different," says Amir Halfon, lead architect with the global financial services solutions division at Sun, which has developed Java Real-Time System to give Java-based applications a real-time requirement for fixed latency.

Linux vendors acknowledge they that hear the licensing concerns come up often.

"There's a great fear sometimes, that if I use open source, will I lose my intellectual property?" acknowledged Novell's Levy. Other panelists Randy Hergett, director of engineering for the Open Source and Linux Organizations at HP, and Marcus Rex, CTO at the Linux Foundation, sought to assuage those fears.

"The current license for Linux requires you give back any changes you make to the open source community, but there's no way anyone can require those assurances and there's no way we'd know," Rex said.

Hergett said that concerns about Linux security and scalability have largely been replaced by concerns that are more "business-based," such as "open source governance" and the "life-cycle management of a complex stack" with 200 or 300 components.

While Larry Tabb, CEO of market watcher Tabb Group, is skeptical that investment firms will adopt open source applications widely because they have such a huge stake in their proprietary applications, he says there is no doubt that Linux adoption itself has become mainstream on Wall Street.

Learn more about this topic

Red Hat launches real-time Linux

Sun Microsystems information on The Java Real-Time System

Information on Novell's SUSE Linux Real Time 10

Information on Red Hat Enterprise MRG

The Options Clearing Corp's "Symbology Initiative"

Interview with Brian Stevens, CTO, Red Hat

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