Taking aim

Worldwide, and now in Egypt, IBM is promoting Linux software to cut into Microsoft’s market share | Business Today Egypt

In this modern-day version of David versus Goliath, a penguin holds the sling. Linux, with its iconic penguin logo, is seeking to take a knock at Microsoft’s dominance of the operating systems market in Egypt. And in going up against the software giant, Linux is getting some help from a higher power, Big Blue.

IBM Egypt heavily promoted Linux software at its annual forum in Cairo in September, announcing that the software will be playing a central role in a number of IBM’s products and services. The move should come as no surprise considering that IBM Egypt’s mother company is the heaviest investor inan open-source consortium that includes Dell, Hewlett Packard and Oracle.


In contrast to “closed-source” products such as Microsoft’s Windows operating system, open-source is a way of developing software that opens up software codes to allow corporations or individuals to modify it to their specific needs. Worldwide, IBM’s investments in open-source seem to be paying off. 

The company’s revenues from sales of Linux-mounted hardware reached about $2 billion in 2003, according to Fortune. With 23 percent of worldwide shipments, Linux servers also rank a respected No. 2 after Microsoft’s Windows, which has 55 percent of the market, according to The Economist.

But it may be much tougher to crack the market in Egypt, where Microsoft seems to hold a special place in the IT world.

In his first visit to Egypt this past January, Microsoft’s Bill Gates derided the open-source movement, saying the not-for-profit software movement stifles job creation. The tough talk highlights Microsoft’s concerns about open source, which many analysts say is less vulnerable to security threats than proprietary code.

Ahmed Tantawy, the director of IBM Egypt’s Cairo Technology Development Center, says IBM’s support of Linux derives from the company’s commitment to support all open standards, which gives freedom to the customers and improves efficiency. This is evident from IBM’s support of all the available platforms, including Windows, UNIX, OS and AIX IBM’s licensed version of UNIX operating systems, he adds.

At IBM’s annual forum, there were updates on both the hardware and software front. That covered servers as well as the “middleware” portfolio for operating databases, business intelligence applications and e-commerce, with products like DB2, Tivoli, Rational and WebSphere. These applications target the small- and medium-sized enterprises (SMEs) in sectors as diverse as banking, digital media, telecommunications and e-government.

Meanwhile, the open-source movement has come under fire for the supposed advantages it offers users. 

About a year ago, Forrester Research, an American IT consultancy, released a Microsoft-commissioned paper maintaining that for medium- and large-sized businesses, Windows’ development environment for various applications is cheaper than Linux. 

IBM’s Tantawy counters the results of Forrester, saying that there have been many research projects carried out by independent parties, like universities, that emphasize that the total cost of operating Linux, and building applications on top of it, is more effective.

IBM’s efforts to grab a bigger share of the SMEs market have yet to come to their full fruition, with Microsoft leading the market and working hard to maintain its position. Only two days after IBM’s forum, Microsoft Egypt abounded the launch of the new version of its Great Plains application suit for SMEs, which is embedded with enterprise resource planning applications and is integrated with other Microsoft applications like Office 2003.

Microsoft, though, isn’t seeking to counter the open-source threat only by churning out more enhanced or integrated products. In 2001, the company launched the “shared-source” initiative that permitted some big clients, like UBS Investment Bank, to “see” the Windows code a change in strategy that would be unthinkable in the penguin’s absence. 

Microsoft even allowed some manufacturers, including Samsung and Mitsubishi Electronics, to modify Windows CE, the operating system for cell phones and Personal Digital Assistants, and to copyright their modifications. And earlier in 2003, Microsoft started allowing governments to see its operating system code, neutralizing the transparency advantage that might entice governments to convert to open-source. More than 30 countries now have checked the code, including Russia, China, Turkey and the NATO alliance. 

Officials from Microsoft have said they expect a “move to the middle” where both the open- and the shared-source models will become ever closer.

It seems Goliath is weary of another fight.

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