Demand rising

The open source architecture provides a roadmap for open source technologies. Some enterprises view these technologies as a way of restoring competition in the software industry that has become anti- competitive through consolidation and the accretion of power to a few large players.

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By  Alex Ma'louf Published  July 26, 2005

|~|Red-hat-Body.jpg|~|Salazar: The demand for open source technologies is growing in the Middle East.|~|Not so long ago Bahrain unveiled the region’s first e-government solution centre based on open-standards solution. Designed to assist regional nations in implementing e-government projects, Bahrain hopes the move will increase the appeal of open source technologies to authorities in the Middle East.

Governments in Europe, South America and Asia have embraced the technology. Norway, Germany and Spain have adopted open-source programmes. Brazil is championing the open source industry as an alternative for businesses and education and Taiwan is drawing up plans to promote the development of local Linux software. Although the Middle East is lagging behind when it comes to open source, there are signs that this is changing.

“There has been a strong acceptance of open source technologies in Western Europe for several years. However, it is starting to [gain popularity] in the Middle East. Businesses are keen to use IT solutions that are cost-effective and open source technologies provide that option,” says Paul Salazar, European marketing director at Red Hat.

This is in sharp contrast to the choices enterprises had a decade a ago. Back in those days a lone programmer would have set about a revolution that would have had profound impact on the technology environment. For instance, Linus Torvald’s work on an alternative operating system, Linux, spurred independent software vendors worldwide to develop, innovate and provide enterprises with a range of diverse solutions for their IT infrastructures.

So what does the open source community intend to achieve for enterprises in the Middle East? According to Graham Porter, marketing manager at Sun Microsystems Middle East and North Africa, technology adoption and value for money are the major benefits.

“The open source [community] believes software products are becoming commodity items and should be shared. It is also a means of bridging the digital divide; there are companies around the world which cannot afford US list prices, and we as an example have developed a pricing model for much of our software that takes into account the GDP per capita in less developed countries – giving them access to technology,” Porter explains.

With a numerous Linux distribution companies such as Red Hat, Mandrake, and Debian, and a who’s who of the IT vendor landscape such as IBM, Sun, Novell, Intel and HP, endorsing open source technologies, enterprises now have ample alternatives to proprietary software.

According to global research firm IDC, Linux will represent approximately 29% of all server unit shipments worldwide by 2008. Topping that, the Linux market is estimated to triple in value over the next three years, from US$11 billion in 2004 to US$35.7 billion in 2007.

The region’s business community is starting to sit up and take notice of open source options. “We did not just wake up one day and decide to adopt Linux for our company,” says Hatem Al-Sibai, CIO of the Al Ghurair Group. “We have been experimenting for years and we slowly developed the skills of our IT team, tested it and made the move. When we took the decision to migrate to Linux our employees were completely familiar with the solution,” he adds.||**|||~|Ratchiffe,-Gordon-----NOVEL.jpg|~|Ratcliffe: Enterprises in the Middle East are turning to Linux, but very slowly.|~|According to Gordon Ratcliffe, general manager at Novell Middle East, the attractions of open source are numerous besides being cost –effective. “Customers face many IT challenges, most of which involve getting the most out of their IT investments. They want to use what they already have, be able to manage their environments as a single network with everything working together and be secure at the lowest possible cost,” notes Ratcliffle.

“Such cost-effective solutions as open source are encouraging. They provide more flexible options for exploring new areas and have solutions tailor made to customer needs. This is nothing to do with marketing or media. It is customer driven,” he adds.

The advocates of open source architecture claim regional enterprises are willing to embrace the technology. The interest among corporations is high because of the strong value proposition open-source technologies have to offer in terms of scalability, availability and the return-on- investment (ROI). “There is a genuine interest in Linux and open source and as the IT industry grows in the Middle East and other parts of the world, new technologies can be introduced and adopted easily,” says Bashar Kilani, software group manager at IBM Middle East.

One such organisation is ADNOC Distribution. Operating a vast network of filling stations covering the entire UAE, ADNOC Distribution has implemented an enterprise resource planning (ERP) suite from Oracle to streamline its business operations. The distribution company used to run Unix and Windows on its server network, but after a stringent re-evaluation of its requirements decided to run Linux.

“Linux offered us promising alternatives; the platform was robust and cost-effective. The total time for project completion was six months, however, the Linux deployment took much less time,” notes Dr Ali Guidoum, CIO of ADNOC Distribution.

“All the core systems are now running on Linux. We are getting a much better performance from the same hardware. Oracle is providing support for its ERP suite on Linux and the vendor can even support Linux if a customer is installing the operating system. We went with Red Hat, which also comes with support,” he adds.

By deploying Linux, ADNOC Distribution has taken a major step forward in its IT services. The organisation has utilised its IT infrastructure to implement a grid computing structure that has multiple, low-cost servers spread over various locations to reduce its total-cost-of-ownership (TCO).

“With Windows we had to have a client access license for every server. That is not the case now that we have Linux. With the Linux server platform, enterprises like ourselves are only paying for the support and not the system,” explains Dr Guidoum.
Linux has made strides in the global enterprise space, with organisations running their applications on Linux-based servers. Both Gartner and IDC have reported strong growth in the Linux server market. The global Linux server market is now worth US$1 billion a quarter, and with a growing number of companies switching to Linux, the open source operating system is almost starting to become mainstream.

Research by IDC for its 2004 server consolidation survey sheds light on the popularity of Linux in the corporate sector. 18% of the organisations that were polled said they were replacing their Unix servers with Linux and 14% were replacing their Windows servers. For Solaris, 32% of the companies that were using the Unix-based operating system, decided to move to Linux. Forrester Research found its respondents were even more enthusiastic about Linux. 52% of business users polled claimed they were replacing Windows servers with Linux.||**|||~|Al-Sibai,-Hatem-----AL-GHUR.jpg|~|Al-Sibai: We did not just wake up one day and decide to adopt Linux for our company. We have been experimenting for years and we developed the skills of our IT team, tested it and made the move.|~|On the local front, the migration to Linux has already begun on a mass scale, claims Khalid Al Rajhi, the chairman of Holool. Businesses are becoming comfortable with Linux and are no longer concerned about licensing and intellectual property issues.

“The adoption rate of Linux has increased considerably in the Middle East, particularly in the Kingdom of Saudi Arabia (KSA), Oman and the UAE, which have witnessed large-scale server implementations,” says Al Rajhi.

One such company that has made the move to Linux is Emirates Industrial Gases (EIG). The energy producer and distributor decided to implement a Linux-based operating system so that it could deploy its core IT applications such as the ERP suite. EIG used to run its apps on Windows NT 4.0, however, instead of upgrading to Windows Server 2003, EIG decided to save on licensing costs and choose Linux to improve performance over the network.

“We wanted to cut down on software costs, as well as gain more control [over our infrastructure] right down to the source code on the network. While most of the IT spend went into licences, now we are diverting the budget onto hardware,” says Payam Irani, systems administrator at Emirates Industrial Gas.

The costs involved in upgrading from Windows NT 4.0 to Windows Server 2003 made EIG think twice about staying with the same operating system. Linux provided a low-cost alternative that gives EIG the freedom to develop and consolidate its Windows clients for further cost savings.

Although the TCO for open source solutions is a compelling incentive for many organisations, IBM’s Kilani believes that Linux adoption is held back because enterprises are tied up with long-term contracts for their existing software. “We have to remember that many regional businesses are on two or three year contracts. While we have seen interest surge in open source from every industry in the Middle East, many are awaiting the expiry of their software licences.”

The interest in Linux and open-source technologies is mostly coming from countries with lower GDPs, such as Pakistan, where IT budgets are extremely tight. Vendors have been inundated by requests for support on Linux deployments, according to Kilani.

“I was in Karachi a few weeks ago and met with enterprises from across the board, including a textile mill, a bank and [several] manufacturing organisations. This particular bank is running Linux on its 400 servers and is planning to rollout an open- source operating system for its thousands of desktops, saving up to US$4 million a year on licensing costs,” says Kilani. “There is a strong interest because of the strong value proposition in terms of scalability, availability and most of all the ROI.”

The TCO arguments have surrounded open-source for sometime, with proprietary vendors claiming Linux is not all that cost-effective. Cybersource, which is an Australian IT consultancy firm, says taking into account support contracts and other related costs such as hardware, IT staff, consultancy fees and other miscellaneous expenses, Linux can be up to 36% cheaper to implement and maintain over a period of three years.

However, Sun’s Porter says there is more to open-source than just cost savings. “Customers like the idea of reducing cost by moving to Linux, however, they realise there is no such thing as a free lunch. The benefits that have attracted Sun customers to Linux are availability. Linux does not crash, so you no longer have to overuse the Ctrl-Alt-Del keys.

Secondly, there is the virus issue. Microsoft provides all the viruses and software patches you can imagine on a weekly basis, whereas we have a banking customer that has been running Linux on both the desktop and back office for more than five years and has not had a single virus in that time.”

Another misconception surrounding Linux is that the platform is unstable due to its open-source development model. There have been security scares surrounding open source applications over the past 12 months, but the ability to review codes and fix at the source is a major benefit for enterprises looking for a secure operating environment.

“Linux is now secure enough that you’ll see institutions such as the Lawrence Livermore National Laboratory loading it on their entire IT setup – not only on desktop and server computers but also on the supercomputers it uses to simulate the aging of nuclear materials,” Mohamed Alojaimi, principle product manager for Oracle server technologies.

“We have been told that Linux is more secure than Windows, and that there aren’t as many ways to break the system. Some of our own software has met the Common Criteria Standard at EAL4 level – the highest industry security level for commercial software,” Alojaimi explains. ||**|||~||~||~|Despite all the publicity surrounding Linux and open source technologies, Microsoft continues to dominate the global software industry including the Middle East. IDC estimates Windows-based servers will continue to make up the lions-share of server sales, representing 60% of shipments worldwide, with revenues exceeding US$22.7 billion.

The difference is even more pronounced on desktop PCs. Out of the two million PCs shipped in the Middle East two years ago, 83% came pre-loaded with Windows. Linux accounted for 14% of installed operating systems. There are signs of changing times, however. For example, eSys plans to establish a 50,000 square feet warehousing and manufacturing facility at Jebel Ali and launch its own brand of low-cost Linux-based PCs.

Tewfiq Zitouni, managing director of Red Hat’s regional distributor OpenNet MEA, believes Linux vendors have learnt lessons about how to develop Linux for desktop PCs. There was a stage when enterprises had reservations about using Linux. However, things have changed.

Today, the application tools found in Windows are similar to those embedded on open source technologies. “Half a day is all it takes for end users to learn the features on our software and they are up and running. Enthusiast users themselves develop Linux software so the features you will find are really the key features the users need and want. Open source software is really made by the users for the users,” adds Zitouni.

Support from the developer community has also helped the demand for open source technologies and it is not difficult to see the reasons why independent software vendors (ISVs) are flocking to create codes based on open source kernels. “It is 40% cheaper to develop applications for Linux,” notes IBM’s Kilani. “The question to ask is why do ISVs need to develop for multiple platforms when they only have to design codes for Linux? The capital required to enter the open source market is very low; experienced IT programmers have all the skills needed to develop open source software.”

Regional nations such as Bahrain and Jordan are exploiting the potential of open source technologies to build their IT sector and create a regional development community capable of meeting the demands of local businesses. “To date there has been much hype; Linux has been used primarily for internet application servers. Education has also been the key adopter of open-source [solutions]. It allows students to do research and add to existing intellectual property without charges and fits in well with the sharing mentality of education,” explains Porter.

A number of tier-one vendors, including industry giants such as Sun Microsystems and IBM, have been working closely with universities and authorities across the region to educate the next generation of the Middle East’s IT community on open source and programming. These local initiatives expand on global commitments from the two vendors to provide the open source community with significant portions of source code. Sun will soon introduce a Java development community pilot programme into the Middle East, bringing together diverse programmer groups.

As Porter notes, if the Middle East is to become a true technology hub, it has to start developing its own innovations rather than relying on outsourcing to other regions. Both Porter and Kilani believe that with the huge amounts of resources being poured into open source developments at the university level, there will be a significant home-grown development community emerging over the next few years.

The benefits of an Arabic-speaking open source community will be obvious to enterprises in the region, with customisation of software high on the agenda for many local companies. However, even more pivotal to the uptake of open source is having professionals who understand the technology. “Linux is ideal for enterprise as far as core application deployment is concerned, whether it be databases, ERP solutions or web-based services. Linux is now in the prime time. However, I am a little surprised about its [low demand],” says ADNOC Distribution’s Dr Guidoum.

“People in the industry were praising us because at that time it was a bold initiative for us. Howver, the big worry for most enterprises is that we do not have enough Linux trained professionals that have an understanding of the technology. Understanding is the key. Enterprises need to have someone who understands Linux and can support it internally,” explains Dr Guidoum.

Another option is that end users can turn to vendors who provide Linux support, but as Dr Guidoum points out, enterprises may not be aware of this. “A lot of people do know about Linux in terms of what it is, but they don’t know its value and strengths. People who understand Linux are in short supply in the Middle Esat, unlike the numbers certified in Windows.”

So what does the future hold for open source technologies? Enterprises in the Middle East are turning to Linux, but very slowly. “There are no barriers or obstacles holding back Linux development in this region. [The fact] is that no one wants to make the first [move] because of the possible repercussions due to a lack of courage to embrace new technologies and adapt to changes,” argues Novell’s Ratcliffe. “Regional enterprises are so used to spending [big] on expensive solutions that they do not believe they can get a product so cost-effectively, which could exceed their business requirements.” ||**||

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