Application Envy

The most important feature of any operating system is one that's not in the manual: third-party applications. On the continuum between having no third-party applications available on Linux to having every single application that a bank may need, it's still the "early days."

"I would guess that we're somewhere between 30 and 40 percent of the way into it," says Andrea Klein, vice president, financial services, Oracle (Redwood Shores, Calif.). "Probably in 18 months, you'll be up to around 50 to 60 percent, in terms of availability of applications."

Helping that percentage along, Oracle has been working with vendors such as Fidelity Information Services (Jacksonville, Fla.) in core banking and Synoran (Columbus, Ohio) in check truncation and image exchange to build Linux-based solutions for banks. "You could create the consistency across all the different channels on Linux," says Klein.

But, in the meantime, banks that adopt Linux will have to do so in stages, as programs become available in each area of the enterprise.

In the database world, Oracle was an early believer in Linux. "Instead of having to support AIX and HP Unix and Sun and all the different variants of Unix, you can support a single open-source code, which really gives you ubiquity in the marketplace," says Klein. "Without having to develop different variations of their product and provide support under each of the different [variants], it will be a lower cost over the long term for the ISV."

Other database vendors have also planted their flags in the Linux camp. Sybase (Dublin, Calif.) has teamed with IBM to offer its enterprise database software on IBM Power Architecture servers using Linux. "This new partnership will provide world-class, mission-critical, 24/7 support worldwide," says David Jacobson, senior director of product marketing, Sybase.

Yet another database vendor, Kx Systems, has also made the switch. Kx's database software, which also runs on Windows and Solaris, is designed for heavy users looking to "handle enormous amounts of data very quickly," says Simon Garland, the vendor's senior vice president, technology.

These high-end customers typically have the resources to put full-time employees on their Linux implementations. "You have to bite the bullet and employ some people in-house to be able to look after it," says Garland. "You can't think that you can just install Red Hat and then everything will work completely unattended."

Switch-Hitters

Several banking software vendors also have launched Linux versions. In keeping with IBM's partner strategy, the bulk of the recent announcements have come from IBM partners, including S1 Corp. (Atlanta), Chordiant (Cupertino, Calif.), i-flex solutions (Mumbai) and eFunds (Scottsdale, Ariz.).

The companies best able to offer Linux versions are those that have built their systems using development tools abstracted from the operating system and the hardware layer. For example, Chordiant created a Linux version of its business process management system. "As an all-J2EE [Java 2 Enterprise Edition] application, the port work was extremely inexpensive," says Brendan Abbott, director of product management, Chordiant.

Most of Chordiant's customers had previously run on various flavors of Unix. Now, using Linux, they can take advantage of inexpensive Intel x86 boxes while keeping all of their business processes intact.

Other companies are targeting the branch. S1 Corp., also a J2EE development shop, built a thin-client branch teller application. "Your teller doesn't have to run Word or PowerPoint," says Imad Mouline, S1's CTO. "All you need is to run a very specific application - that's the teller software," he notes. "And, by the way, it doesn't care what operating system it runs on," adds Mouline.

Microsoft's response to this idea: "The industry is suffering today from the use of siloed software, and this simply reinforces that problem," says Microsoft's Warren Lewis, global industry manager, banking. "Within branches, where people have two jobs and switch back and forth, to have a foreign user interface just makes no sense."