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MARCH 30, 2004
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Marc Andreessen: "Linux Has Matured"
The Web pioneer says big corporate customers tell him that by going to the open-source software, "they're saving a lot of money"
He was there at the dawn of the World Wide Web as one of the co-founders of Netscape Communications, the original Web browser company. Since then, Marc Andreessen has moved up the info-tech food chain. His current company, called Opsware, builds sophisticated software that makes it easier to manage large fleets of servers running highly complex tasks. In many instances, that means lots of Linux servers.
So, Andreessen is in the thick of the Linux landscape and often hears what technologists at big companies think about open-source software. BusinessWeek Online Technology Editor Alex Salkever spoke with Andreessen about Linux on Mar. 27. Here are edited excerpts of that conversation:
Q: Why is Linux doing so well right now?
A: The mainframe was the dominant way to do big computing, until the 1980s. Then it was Unix workstations with Sun (SUNW ), IBM (IBM ), and HP (HPQ ). But all proprietary versions of Unix ran on expensive, exotic hardware. Sun would sell you a $1 million Unix server. It used proprietary software and sold at very low volumes.
Now you can put Linux on Intel (INTC ) hardware at a fraction of the cost. That's big news because all the people who worked on Unix can easily migrate to Linux. So it's not only free but it's also on cheaper hardware, and a relatively easy transition. It's sort of like trading in your Lamborghini for a Honda that goes almost as fast.
Q: So what has changed with Linux to make chief technology officers more comfortable running it on critical systems?
A: Two things have happened. Linux itself matured. Ten years ago it was a toy. Five years ago you could make it sit up and jump and do various things, but it wasn't ready for a database. In the last two years, Linux has matured to become comparable to almost every other commercial operating systems. There's very little it can't do that companies need.
The second thing that has happened, which is equally or more important, is that Intel's server hardware has gotten extremely sophisticated and powerful. You can buy a $2,000 server from Dell, and it's just as powerful as a $200,000 server from Sun was five years ago.
Q: When you're talking to companies doing a big installation on Linux boxes, besides the hardware cost, why else are they saying they want to go with Linux?
A: Another big reason is control of their own destiny. If you look at for 40 or 50 years of business computing, banks, airlines and insurance companies have always bought proprietary products and always been locked into one vendor. Vendors have a monopoly in those accounts because switching off of those systems is too hard. It's kind of like if you buy a Ford car as your first car and that means every car you buy for the rest of your life has to be a Ford. After 20 or 30 years of that, you would be pretty bitter.
Remember, these aren't little companies. These are big companies that are being locked in. Linux is the first opportunity they have to get total control over their computing destiny. They can buy their server from anyone. They can get their software to work on any of these boxes. They love that.
Q: Is Linux saving anyone real money? I ask because you clearly can save on hardware, but licenses from open-source companies such as Red Hat (RHAT ) aren't cheap. And now that you can run Sun on Intel hardware is there any real savings?
A: Most of the studies that show Linux is not cheaper have been funded by the old vendors. You'll typically find an analyst study that was paid for by Sun or Microsoft (MSFT ). That's compromised research.
What the customers will tell us, and I am not in the business of selling hardware or operating systems, is that they're saving a lot of money. Morgan Stanley has an 80-20 rule. That rule goes like this: They're replacing 80% of their Sun system with Intel boxes for 20% of the cost. Now that means they need to manage lots of boxes, and they may need more people for that, but they still feel they're saving a lot of money.
Q: How has the ecosystem around Linux changed over the past two or three years?
A: We are an example of that. Our product can run on a Linux server. And there are more and more commercial software companies that can run on top of Linux. Oracle (ORCL ) in the last year has made a big push on this. The big difference is now there is a big market behind these products. The history of this industry is commercial software vendors follow the operating-system market.
Q: You're not a huge fan of Microsoft, but it has been gaining lots of market share. Do you think it has a place?
A: The market is going to go 50-50 Linux and Microsoft. And it's going to go 100% on Intel or x86 hardware. Microsoft is the other way to go to commodity hardware. The difference is the skill sets and the software base already out there. You have a large body of people at big companies who are trained in Unix, and they're going to go to Linux.
Then you have this whole universe of people in smaller businesses who are used to Microsoft. Those people might be more likely to buy Microsoft servers. I would say Microsoft has a really big advantage in small and medium-size business. They have such a huge installed base. Linux hasn't really figured out yet how to penetrate that market. If a small business has Linux, that's because it's owned by a hobbyist.
Another key thing to remember is that everyone coming out of college is familiar with Linux. It has overwhelming market share in colleges and universities. In every computer science program I'm aware of, it's the default language people teach on. They like it because it's open-source, and you can look at how it really works. The reason that's important is because those kids leaving college will enter the workforce and bring those skills to their employers.
Q: As Linux moves into embedded devices and out of the server closet, how does that change the software landscape?
A: That's an interesting question. Linux is taking over in server software and in embedded software. It's not doing that well on the desktop. What does it mean? It means you can assume that Linux is present if you're building a cell phone or a new personal digital assistant or a new car. In the future, the 50 microprocessor chips in a car that are now running on a variety of proprietary operating systems will run on Linux. If you look at the economics of embedded systems, it's probably a low-margin product line. Because Linux is free, it helps them make a profit.
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