Financial services IT execs weigh Linux’s strengths

A panel of Wall Street IT veterans at the LinuxWorld Expo here this week weighed in on the pros and cons of Linux as a core platform in the financial services sector.

NEW YORK – A panel of Wall Street IT veterans at the LinuxWorld Expo here this week weighed in on the pros and cons of Linux as a core platform in the financial services sector.

Several speakers said the combination of Linux’s low cost and good performance made it a good alternative for many Unix-based server applications.

“If you have a lot of Unix, then Linux makes sense,” said Robert Lefkowitz, director in the Technology Architecture Group at Merrill Lynch. “You have to sell Linux on TCO [total cost of ownership],” he said. Merrill Lynch runs Linux on its mainframes as an application platform for crunching complex derivative calculations.

While much of LinuxWorld was focused on Linux on Intel, Lefkowitz said the fact that the open source software runs on systems such as IBM RISC and mainframe computers and HP Alpha and other platforms is also a positive attribute.

“What makes Linux attractive is what makes Java attractive – it can run on multiple architectures and is not tied to any particular hardware vendor,” he said.

Credit Suisse First Boston (CSFB) turned to Linux for running one of its busiest trading applications when its RISC-based Unix infrastructure became outdated.

“The great thing about Linux is that you can use real TCO as the selling point to get your organization to buy into something that also lets us do innovative things,” said Evan Bauer, an independent software consultant and former CTO at CSFB.

As a result of this infrastructure change, the trading desk was able to make $20 million more in a year, Bauer said. “[CSFB] could take on more business because our trade flow was increased.”

Merrill Lynch’s Lefkowitz also praised the malleability of Linux, due to the availability of source code and the ability to work with open source tools and programmers to create a unique piece of code for a certain task.

“One of the strengths of free software is that it’s not an either/or proposition,” Lefkowitz said. “It gives you the opportunity to take bits from here and there and make the ‘Borgish’ thing that can satisfy [almost] all of your computing needs” for a specific task.

One panelist took a more skeptical view.

“We would install any open source software that was best-of-breed,” said Robert Ryan, an IT executive at J.P. Morgan Chase. Ryan said his firm uses Linux, but is taking a cautions approach towards leaning heavily towards open source, or any other single kind of operating system. He added that choosing open source for the sake of open source is not wise.

“At the end of the day… Linux will have to stand on its own as a technology,” Ryan said. Open source operating systems, he added, “have a tremendous opportunity to succeed, but the Achilles’ heel for those products will be if they are oversold on the merits of their openness and not on the merits as an operating system.”