FEATURES & COMMENTARY

San Jose, CA — Who would have thought an operating system whose mascot is a cute, smiling penguin could engender such fear?

One after another, companies attending the LinuxWorld Conference and Expo here are portraying the so-called open-source movement as the great equalizer, capable of reducing giants to dwarfs and making paupers patrons as new electronic applications begin to flow freely and fast.

Companies developing everything from wristwatches to electronic organizers to supercomputers are flocking to Linux because the platform allows anyone to tinker with the operating system to fit individual needs, while freeing them from paying costly licensing fees. That helps keep down the price and can speed product development, allowing upstarts to take on entrenched competitors.

“Linux is a business-model disruptor of pretty mammoth proportions,” said Michael Dell, chairman of Dell Computer Corp., in a keynote address to conference attendees.

Microsoft Corp.’s Windows and Apple Computer’s Mac OS have been mentioned as the most threatened operating systems, but companies such as Dell, Motorola Corp. and others are using Linux to challenge markets dominated by Sun Microsystems, Hewlett-Packard and Palm Inc.

Even small companies see opportunities. Agenda Computing Inc., a subsidiary of Hong Kong-based Kessel International Holdings, showed off a slick, new electronic organizer called the VR3 that uses the Linux operating system. The handheld market is currently dominated by devices that run on the Palm OS.

And new software applications such as word processors, spreadsheets and games that could challenge Microsoft’s Office suite could come sooner rather than later now that industry leaders are working to establish a common desktop interface for the raw code that powers Linux.

The 3-year-old Gnome Foundation announced Tuesday that Compaq, HP, IBM, Red Hat, TurboLinux and others had joined an advisory board determined to set a single standard for the interface.

Middlemen such as San Francisco-based CollabNet also are gaining new business as they bring together corporations to work on projects with developers.

Dell noted his company is expected to announce soon an agreement with the startup, similar to those announced by HP, Sun and Oracle for software engineering projects.

CollabNet launched what 26-year-old founder Brian Behlendorf, a well-known programmer in the open-source movement, terms an “open-source eBay.”

CollabNet’s SourceXchange so far has attracted nearly 8,000 programmers as registered members. When a client with a software problem posts a formal request for help, SourceXchange programmers are notified by e-mail. Willing programmers then submit proposals and suggested fees.

If a client accepts a proposal, SourceXchange creates a contract, supplies a “peer reviewer” to referee any disputes and oversees payment, charging the client an additional fee.

“It’s really hard to deny there’s a huge phenomena happening here,” Bernie Mills, vice president of marketing at CollabNet, said of open source. “There is an element of spontaneous innovation that happens when you have developers share code and advance that code using open-source principles.”

Companies that would benefit from weakening Microsoft’s dominance are backing the project in a big way. CollabNet has received $35 million in funding from Sun, Oracle, HP and Intel Corp., and Netscape co-founder Marc Andreessen, whose browser was trambled by Microsoft, sits on CollabNet’s board.

“These are all advantages proprietary systems do not provide,” added Stacey Quandt, an analyst who follows Linux for Giga Information Group. “We don’t see the same sort of excitement and trends focusing on Windows at this point.”

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