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Fri, Mar 26, 2004 - Page 12 News List

Hewlett-Packard under pressure to offer more Linux

AP , SALT LAKE CITY

Hewlett-Packard Co says it is yielding to large clients' demands and expanding Linux distribution -- a decision that could force Microsoft to reconsider some of its corporate pricing for Windows.

HP announced a wider partnership on Wednesday with Novell Inc and plans to package its SuSE version of Linux with computers bound for corporate clients.

"What's interesting is the possibility it will give Microsoft the impression that it's actually in a competitive market," IDC analyst Roger Kay said. "It would act like a competitor rather than a monopoly and use price as a competitive tool."

Microsoft Corp declined to comment, and an HP executive downplayed suggestions of fiercer competition for the software behemoth at a news conference Wednesday.

"Our Microsoft relationship is good, strong and powerful," said Martin Fink, vice president of HP's Linux division.

Still, Redmond, Washington-based Microsoft could stand to lose the most if HP's new venture proves successful.

HP decided to move more toward the Linux platform after "a number of very large customers from Fortune 50 companies" expressed interest in the product, Fink said. Those customers are looking for ways to cut information technology costs, and figure that cutting out the expense of buying multiple Windows licenses would help, he said.

HP already offers Linux options for select client systems, and sells more than 400,000 Linux-based workstations each year. But Fink said most of those clients are in Asia and Eastern Europe, and Wednesday's announcement reflects a bigger commitment to integrating Linux desktops into corporate operations in North America.

Fink declined to offer specific projections of how many more Linux-based desktops the company might sell.

"We want to grow at least as fast as the market, and faster if we can," he said.

The desktops would be available only to corporate consumers. He wouldn't comment on how much the units would cost, saying expenses would vary by client and by distribution method.

Linux, an open-source operating system that's developed by a community of volunteers and paid programmers, has so far found traction mainly in corporate servers, not in desktop PCs. Today, only up to 3 percent of all client computers ship with Linux, though the number is difficult to track since half of them end up in China, where many of the computers end up with copies of Windows installed, Kay said.

"The reality is it's probably 1 percent using Linux," Kay said.

Fink said he expected to roll out the product in the second half of the year.

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