Who’s Afraid of Linux?

BJ Havlik is not afraid of being on the bleeding edge. Two months ago, Havlik, the IT manager of Menasha Corp., a $1 billion packaging and forest products company in Neenah, Wisc., swapped his company’s SAP applications from Hewlett-Packard servers using a Unix operating system and onto Dell servers running Linux.

Havlik’s motivation was simple: he figures moving to Linux has saved his company about $700,000. It has also propelled Menasha into the brave new world of enterprise resource planning on Linux, a world that, so far, only a handful of companies have ventured to explore.

The H-P servers had served since 1997 as Menasha’s home for a number of applications handled by SAP R/3 software, including its financials, shop floor management, human resources, sales, and distribution services to 1,500 users at more than 30 locations.

At a Glance

Company: Menasha Corp. of Neenah, Wisc., makes packaging, plastics, and materials handling items. It also has a forest products group which harvests and sells timber from the northwestern United States. The privately-held firm had 1999 revenues of nearly $1 billion and has 5,700 employees.

Problem: Upgrade Menasha’s SAP installation from version 3.1 to 4.6, without adding expensive new hardware.

Solution: A shift from H-P 9000 Unix servers to four-processor Dell systems running the Linux operating system.

But last year, when the company wanted to upgrade to R/3 version 4.6, SAP told it the new version would require more hardware. While all five of Menasha’s H-P 9000 servers had been completely reliable, Havlik says, one look at the cost of adding more sent him scurrying to find a less costly approach.

Menasha replaced the H-P boxes with what Havlik calls a “dramatically less expensive” solution: 10 four-processor Dell servers running Linux. The company’s Oracle database continues to run on an H-P Unix system.

While Menasha is not the first company to run SAP’s R/3 on Linux — a few companies in Europe, like Munich chip distributor Consumer Electronic AG, have been running SAP on the open source operating system for more than a year — it is a pioneer in the United States.

It’s hard to know exactly how many companies are running enterprise-wide applications on Linux. The number is clearly small but appears to be growing. SAP, which first released a version of R/3 for Linux early last year, now claims to have 400 Linux installations. Not all those, however, are actual production instances. One of them, for example, is an R/3 test system which Siemens Business Services in Canada has been running for several months at the its Toronto data center.

Siemens, which hosts SAP applications for clients, has recently suggested to a couple of clients that they consider shifting to Linux, says David Paish, a team leader at the Toronto data center. While Paish isn’t convinced that Linux is ready yet for a high-volume application such as SAP Retail, he believes Linux is well suited to hosting R/3 systems for small to mid-sized businesses. For a company with under 500 users, “running SAP on an Intel platform is cheaper,” he says.

Lukewarm, at best
While SAP pushes ahead with Linux, support for the open source operating system from other ERP vendors has been lukewarm, at best.

PeopleSoft of Pleasanton, Calif., has a handful of customers running Linux, but only on the client side. An official from Lawson Software, of St. Paul, Minn., says the company supports Linux on the desktop but does not know of any customers running it. And up-and-coming Swedish vendor IFS, whose North American headquarters are in Schaumburg, Ill., says it has one German customer running Linux but has yet to see much demand for it.

That’s not surprising, says Dennis Byron, vice-president of enterprise applications research at IDC, a Framingham, Mass, consultant. “Linux is just not on the radar screen” of most IT shops looking at ERP applications, he says.

That doesn’t mean that companies aren’t using Linux for enterprise-wide applications. In fact, an IDC study published in February showed that the number of Linux users using Linux for enterprise applications such as ERP and customer relationship or human resources management jumped to 10 percent, up more than three times from a year earlier. But Byron said most of these applications are probably being built in-house.

As Linux matures, it’s likely that more companies will consider it for business-wide applications. Linux has always been a highly reliable operating system — an important attribute for enterprise-class applications — but until recently, it has lacked key features for enterprise computing.

The most recent release of the Linux kernel, version 2.4, remedied some shortcomings by increasing the amount of memory Linux can use and boosting the number of CPUs a Linux box can manage from four to eight. A version of Linux featuring the new kernel was released by Red Hat in April. The release of Intel’s new high-powered Itanium processor, which will run Linux as well as other operating systems, will probably make Linux more appealing for the high-end market as well.

Oracle’s Position
While Germany-based software company SAP is eager to trumpet its support for running business applications on Linux operating system, the other big player in the enterprise resource planning market, Oracle Corp., of Silicon Valley, seems more ambivalent about the open source movement.

SAP released its first Linux version of its primary ERP software, R/3, as far back as late 1999. This February, in contrast, Oracle chief Larry Ellison cautioned users at Oracle’s AppsWorld conference not to try to run Oracle’s 11i application suite on Linux.

That was “an unfortunate statement,” says Steve Westmoreland, chief information officer of Linux hardware vendor VA Linux. Westmoreland was scheduled to speak the next day about how his company has been successfully running nearly the full suite of Oracle’s 11i applications on Linux since last October. “After hearing that, I was a little concerned whether anyone would show up,” he recalls.

About 25 or 30 people did come to Westmoreland’s presentation, but the incident is a clear indicator of Oracle’s ambivalence about Linux.

It’s not that Oracle is opposed to open source in general: Oracle’s new 9I application server, for example, is based on the open source Apache Web. Plenty of users run Oracle’s database on Linux, and the software maker chose Linux as the platform server to demonstrate the latest version of Oracle’s database software, 9I, at its official unveiling on June 14. And in the same speech in which he advised users not to run Oracle applications on Linux, Ellison declared, “I’m a huge supporter of open source.”

Lessons Learned

1) A growing number of companies are using Linux for enterprise-wide applications — but so far, most are writing them in-house, rather than using packages from Oracle, SAP, or other vendors.

2) As with any unfamiliar operating system, it pays to have expertise with Linux in-house before attempting to host your ERP applications on Linux systems.

3) Shifting your ERP applications onto less expensive Intel-based hardware running Linux could cut your hardware costs by two-thirds.

But — perhaps because of Oracle’s tight relationship with Sun Microsystems, which sees Linux as a competitor to its Solaris version of Unix — that endorsement does not seem to extend to Linux as a platform for Oracle applications.

“Oracle did not support it one iota,” says Jeffrey Sofferin, CIO of Aviation Systems International Inc., in Boca Raton, Fla., a $40 million aviation parts distributor which tried — and failed — to run Oracle 11i on Linux a few months ago.

When ASI received its copy of 11i for Linux, says Sofferin, Oracle had included disks for NT in the package. “If they’re serious about Linux, they have a funny way of showing it,” he says.

ASI, which uses Linux for its mail and Web servers and firewall systems, has given up on Oracle’s applications altogether, and is now looking at other ERP products, some of which run only on NT.

A deal killer?
Oracle’s ambivalence towards Linux hasn’t completely stopped users from adopting it for Oracle applications, but it is making them hesitate. For instance, BOSS Corp., a Duluth, Ga., systems integrator, was working with a $100 million manufacturing firm which was eager to run Oracle 11i on Linux, according to Bill Dunham, BOSS’s ERP practice director. The client was already using Linux for firewalls and proxy servers, and estimated that running Oracle applications on Linux would be three times less expensive than running it on Unix systems from vendors like H-P, IBM, or Sun.

Ellison’s warning at AppsWorld made the firm reconsider its plan. But in the end it decided to proceed, and the project is now up and running in a test environment. The installation has been trouble-free, according to Dunham, and the project is actually ahead of schedule. One key to its success, in the executive’s opinion: both BOSS and the client already had IT employees with Linux experience in-house.

Dunham says other BOSS Corp. clients are beginning to express interest in running Oracle applications on Linux. The main driver: potential cost savings.”We have several Oracle clients that are looking at spending a half million or a million dollars on new hardware,” he says. “To them, this configuration looks pretty attractive.”

To Dunham, that makes a lot of sense, especially since the first installation went so smoothly. “We don’t see any difference,” he says, “between implementing Oracle on Linux and implementing it on IBM AIX or HP-UX or Sun Solaris.”

Especially for companies with employees used to navigating in the Linux universe, savings of that magnitude will cause many IT managers to give open source platforms a long, searching look.

Dan Orzech is a Philadelphia-based writer specializing in technology. This story originally appeared on Datamation, an internet.com Web site.