Linux: Off the Bleeding Edge

The Open Source operating system has grown up and small businesses are finding it a safe bet.

When it comes to technology purchases, companies of all sizes have to weigh the advantages of getting the latest and greatest--they don’t call the leading edge the bleeding edge for nothing. Small businesses tend to be even more conservative. If a new kind of hardware or a whizzy new program doesn’t quite pan out, it’s a nuisance and maybe a write-down for a big corporation. For a smaller company it can mean extinction.

However, there comes a time when new technologies are proven and reliable—when the risk is reduced. This is where the Open Source software movement is today. Open Source, the most famous example of which is the Linux operating system, is more of a movement than a technology per se. Unlike proprietary software, such as Microsoft’s Windows operating systems, Open Source products are not owned or developed by a single company. They are based on open standards and are distributed freely. And, because anybody can contribute new ideas and applications, Open Source systems can evolve more rapidly than proprietary software—or so the theory goes.

Linux has already found its way into hundreds of major corporations and organizations, such as Ford Motor Co., eBay, Google and the Department of Energy. And a growing number of hardware and software vendors (including Micorosoft) have lined up behind Linux and are crafting products and marketing strategies specifically for small businesses. Novell, which got much of the small business world into networking with its Netware software, acquired SUSE Linux, and is rebuilding its small-business networking software business around that operating system. IBM, HP and Dell all sell small business packages based on Linux.

So, is it time for small business owners to embrace Linux and Open Source? Yes and no. The consensus among tech consultants is that Linux is definitely a good choice for running your internal network, handling email, file sharing (providing many users with access to shared documents, such as reports, spreadsheets, etc.) and running company databases. Where Linux is not right for most small businesses—yet—is on desktop computers.

“The Internet was built on Unix (the precursor of Linux),” notes Faber Fador, president of Glen Gardner, N.J. based Linux New Jersey, a company that specializes in installing Linux systems in small businesses. As of this August, 70 percent of the world’s websites ran on Apache, the Linux software for Web hosting, according to Netcraft, a British Internet market researcher and security company.

The big advantages of Apache and other Linux/Open Source products are cost and efficiency. They tend to be inexpensive to buy (many products are technically free, but you wind up paying for distribution and, most importantly, for support, customization and add-ons), require less powerful hardware than Microsoft Windows operating systems and applications, and are less expensive to maintain and update.

The Uptime Group, a Lakewood, Col. consulting company, got into the Linux business four years ago when its founder Dale Laushman saw that Linux would work for small businesses. Laushman had been the tech guru at several dot.com startups, all of which had relied on Linux to run their websites—mainly because it was so inexpensive. Laushman saw that it was reliable, too. The company snagged its first small-business clients by promising prices that would be at least 50 percent below the cost of installing systems based on Microsoft’s Small Business Server.

Since then, the Linux business has grown up, says Patty Laushman, Dale’s wife and partner. Now, Uptime isn’t the only Linux expert in the Yellow Pages. That helps build credibility and also assures clients. “Often, their biggest fear is that the company will disappear,” says Patty. “Now, they know if that happens there will be somebody else who can support their system.” The other change, she notes, is that Microsoft has responded to the rise of Linux in this market. Not only has it started its own Linux efforts, but it has also reduced pricing on some of its server products, shrinking the price gap with Linux to between 30 percent and 40 percent.

But purchase price is only part of the equation, notes Fedor. When he prices out new company networks or upgrades, he says, another key factor is the price of hardware. While each new release of a Microsoft operating system (the next one, code-named Longhorn, is due next year), requires customers to buy new computers to keep up with the growing demands of the software, Linux is lean and mean by comparison. The basic software to run a company network on Linux can fit onto a single CD-ROM—that’s less than 700 megabytes. Micorosoft Small Business Server is 4 gigabytes of code. And, rather than paying for an all new operating system (or paying at all), Linux customers can add new OS functions as they are made available to the Open Source community.

Fedor says he often finds that a Linux mail server or Web server (depending on volume, of course) can easily fit on an existing machine. “You can have it all on one box—the email, the database, the Web server,” he says. One Linux New Jersey customer, whose company handles between 40,000 and 80,000 emails a week, is using a server powered by a Penitium II, a circa 1998 machine. “Quite frankly, a lot of small businesses are very cheap,” says Fedor. In fact, he says, one of the problems for his business is that customers hire him to install a Linux system and the server works so reliably that they never call him back.

Linux on the desktop, however, is still relatively rare. Microsoft’s hold there is too firm, says Fedor, and most workers are trained in Office. Open Source programmers have come up with many applications that attempt to match the industry-standard Microsoft programs, such as Office, but they don’t quite measure up, says Dale Laushman. In particular, the Open Source community has thus far failed to match the Windows crowd in products for scheduling, calendar synchronizing and managing group contact lists. Laushman says he gave up on Linux when he had trouble synchronizing his Palm Pilot with his Linux desktop.

Still, Linux applications are improving all the time. Open Office, which apes the functions of Microsoft Office, is being tweaked. Novell has recently brought out Linux-based programs for “groupware,” which includes group scheduling and calendar.

Meanwhile, many popular Windows-based desktop applications, such as Quick Books, the small business accounting program, and ACT, the popular contact-management program, work well with Linux data bases.  

The next big thing, according to Laushman, is Asterisk, a Linux program for Voice over Internet Protocol (VoIP).  Like all VoIP setups (see this White Paper from Small Business Review), Asterisk creates a virtual voice-telephone system on the Internet. Using Asterisk, which is available from digium.com, a small business can create a phone system with the features of a large corporate PBX, but at about half the price charged by VoIP vendors such as Lucent or Cisco.