Latin America - Private sector driven to Linux
IDG News Service 7/18/05
Juan Carlos Perz, IDG News Service, Latin America Bureau
Although Linux adoption in Latin America has for years been the subject of loud debates in governments between backers of Microsoft Corp. and proponents of open-source software, a quieter but no less interesting trend is developing among private-sector enterprise users.
While countries such as Brazil and Venezuela have initiatives to promote broad adoption of open-source software in government agencies, Linux, on its own, is steadily winning converts among private-sector IT managers in the region.
Businesses such as banks, pharmaceutical companies and e-commerce providers in Latin America are turning to Linux servers to tackle an increasingly broad array of business and technology problems, attracted by what they perceive as its solid performance and comparatively lower costs. Along the way, Linux is elbowing out various other server operating systems -- primarily Windows, but also Unix, NetWare and legacy platforms.
Users say they trust the technical stability, performance and scalability of Linux servers and are using them to run essential business software, such as messaging systems, firewalls, databases and enterprise applications. Adopters also report solid support from Linux vendors such as IBM Corp., Hewlett-Packard Co., Novell Inc. and Red Hat Inc., as well as their respective channel partners.
In 2003, MercadoLibre.com SA, a Buenos Aires-based online marketplace with operations in multiple countries in the region, outgrew its server infrastructure, which was made up entirely of Sun Microsystems Inc. boxes running Solaris. It opted to migrate to HP Itanium machines running a Linux operating system from Red Hat, instead of adding Sun servers to its existing setup.
"With a single shot, we had to solve three issues: availability, scalability and performance. And we had to do it at a low cost," says Edgardo Sokolowicz, MercadoLibre.com's chief technology officer, in an e-mail interview.
MercadoLibre.com, whose biggest shareholder is eBay Inc., today runs its entire operation -- both back-end processes, including an Oracle9i database, and customer-facing Web operations -- on HP Itanium servers with Red Hat Linux server and PC operating systems. The move has slashed maintenance costs and increased performance, Sokolowicz says.
"As the business grew, we added HP Linux servers, improving performance, eliminating single points of failure and obviously doing all this within our budget," Sokolowicz says.
While Linux found its way into MercadoLibre.com by providing improved performance at lower costs, its security won it entry in 2001 to the Mexico office of British publishing company Macmillan Publishers Ltd.
Although it had security software from McAfee Inc. and Microsoft's Proxy Server, Macmillan Mexico was suffering from constant virus infections and server intrusions, as hackers routinely deleted server boot-up files and redirected Web site pages, says Jos Valdovinos, information systems manager for Macmillan's Mexico and Peru operations.
Dissatisfied with Proxy Server, which Microsoft later discontinued, and stung by what it considered high Exchange licensing fees for its then 80 or so users, Macmillan Mexico decided to migrate to servers running the Linux operating system and a messaging system and firewall from SUSE Linux AG, a German vendor that was later acquired by Novell Inc. The McAfee software was replaced with enterprise security products from Kaspersky Lab.
"The [security] problems, which were a daily occurrence for us, are gone," Valdovinos says. "It was the best decision we've made to ensure the company's continuity of operations."
While Valdovinos acknowledges that Microsoft has improved the security in its products in recent years, he says the SUSE Linux products are working well, and he sees no reason to migrate back to the more expensive Exchange messaging system, particularly now that Macmillan Mexico is expanding. The publisher, which is standardizing its server and desktop hardware on Dell Inc. machines, now has close to 200 users, Valdovinos says.
And it's likely Linux will continue invading Macmillan Mexico's systems. Macmillan Mexico currently runs an ERP suite from Baan (now owned by SSA Global Technologies Inc.) on Windows 2000 Server and Microsoft SQL Server 2000. But seeking increased performance and lower costs, Valdovinos plans to migrate the ERP suite over to a Linux server operating system and drop SQL Server for an Oracle database.
A Big Year
"What we're seeing is that in 2003, Latin American enterprise users were learning about Linux, and then in 2004, Linux became for them a reality, a viable alternative in terms of its feature set. In 2004 was the turning point, when massive adoption of Linux servers began in the region," says Ricardo Villate, a program manager at IDC Latin America.
IDC estimates that 15 percent to 18 percent of servers in Latin America run Linux -- putting Linux in second place, behind Windows, which runs about 75 percent of servers, Villate says.
In terms of dollar value, Linux servers in the region have a projected compound annual growth rate of 17 percent between 2004 and 2009, the fastest rate among all server platforms, he says. A 2004 IDC study shows that Windows is the operating system most often displaced by Linux in Latin America.
Although the lower costs associated with acquiring and operating Linux servers are still the main draw for Latin American enterprises, an emerging trend is the small but increasing use of Linux servers for critical tasks, such as running ERP suites, Villate says. This shows that Linux is increasingly being seen by Latin American IT managers as a secure and solid server platform that can be used for workloads beyond Web serving, e-mail and file-and-print tasks, he says.
A big help has been a push from vendors such as IBM and HP, plus an increase in resellers and systems integrators that are skilled on Linux and can offer support, observers say.
Servopa Group, a car dealership and rental company in Curitiba, Brazil, last year implemented IBM servers running Linux from SUSE to seek greater computing flexibility than afforded by its Unisys Corp. mainframe.
"We decided to implement Linux servers because the Servopa Group was searching for technological solutions with open systems which could offer conditions and facilities to keep up with our market growth. Within this scope, Linux was a cost-effective, safe and robust product," says Celina Hara, the company's IT manager, in an e-mail interview.
Today, about 50 percent of Servopa's servers run Linux, including the company's ERP suite, but in the coming years Hara expects that percentage to reach between 80 and 90 percent at this 700-person company.
"We hope that with the adoption of Linux we will have increased flexibility and freedom in the choice of development tools. It is easier to choose vendors, hire developers and support technicians," Hara says.
Of course, Linux also strikes out at times. In 2003, pharmaceutical company Medley S.A. Industria Farmaceutica in Sao Paulo, Brazil, implemented a non-commercial Linux operating system on a server that worked very well for several months until it had a configuration problem and stopped recognizing network cards it needed to operate.
Medley's IT department couldn't find a qualified company to fix the issue on a timely manner, which created a major headache for the company, says IT chief Pedro Balista. "I felt totally isolated and alone," Balista says in a phone interview.
As a result, Balista swore off Linux and decided to standardize its IT infrastructure, which supports about 700 users, on Microsoft server products running Windows and on IBM AS/400 servers.
Other IT managers opt for a non-Linux platform because they feel that it provides from a single vendor a variety of products that they would have to otherwise procure from a variety of Linux makers.
That is the case at Financiera Rural, a bank run by the Mexican government whose purpose is to provide financial assistance and support to farmers. The bank uses Windows server applications for messaging, collaboration, security, software updates, system monitoring, remote access and the like, says Jos Luis Gmez, IT infrastructure manager.
"We couldn't find a Linux vendor that could provide all of that. We would have had to integrate systems from various vendors," Gmez says in a phone interview.
Valdovinos says he has noticed that IT managers in Mexico are increasingly receptive to using Linux on their servers.
"In the past two or three years, I've noticed a greater acceptance toward Linux at the enterprise level," Valdovinos says. "More people are trying out these products, and they are more open-minded, whereas there used to be a lot of skepticism."
HOT POCKETS: A sampling of Linux users in Latin America
Macmillan Publishers Ltd., Mexico City
Linux deployment: Dell and Compaq servers using a SUSE Linux server operating system and running the SUSE Linux OpenExchange messaging and groupware platform as well as Kaspersky Lab antivirus and antispam products.
MercadoLibre.com SA, Buenos Aires
Linux deployment: Cluster of 10 HP Integrity servers, each with four Itanium 2 processors, using a Red Hat Linux server operating system and running Oracle's Oracle9i database and e-commerce applications developed in-house.
Servopa SA, Curitiba, Brazil
Linux deployment: IBM xSeries servers using a SUSE Linux server operating system and running IBM's DB2 database, Tivoli systems management software, WebSphere Application and Edge servers and multiple business applications.
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