HP Touts its Prowess in Linux and Open Source

Published: March 13, 2007

by Timothy Prickett Morgan

While everyone knows that Linux is now pervasive in IT organizations, the slippery nature of open source software makes it difficult to gauge how deeply it has penetrated into the data centers of the world. And it is even harder to reckon how much money those Linux investments represent, since in many cases the costs associated with Linux are soft ones--paying system administrators to patch machines--rather than hard ones--buying a license and support contract from a third-party vendor. And if Linux is hard to quantify, other open source software presents even more of a challenge.

In any event, Hewlett-Packard's Open Source and Linux Organization, or OSLO, which is a cross-divisional technology and marketing arm of HP dedicated to the commercial deployment of Linux and other open source software, thinks that its approach to peddling open source is gaining traction.

Doug Small, who is director of marketing for OSLO, is making the rounds in the IT press and analyst community, talking up HP's prowess in this area.

As we all know, by acquiring Compaq six years ago, HP bought the biggest server player in the young but exploding Linux server market. Compaq's ProLiant machines by far had the best support for Linux, and the company enthusiastically supported Linux alongside Windows, NetWare, and SCO Unix.

Quoting statistics from IDC, Small says that HP (meaning HP plus Compaq) has dominated the Linux server market for the past nine years, and through the end of 2006, has been able to rake in $7.8 billion in Linux servers. He says that HP has about 30 percent of the current installed base of Linux machines, compared to IBM's 20 percent and Dell's 13 percent.

Back in the early days of the Linux wave, HP used to quote how much money the whole company made in Linux, and mainly to prove that the total value of its Linux engagements were larger than numbers quoted by IBM. After a few years of doing this, HP stopped giving out that number. At LinuxWorld in early 2004, the company said that it had $2.5 billion in Linux-related sales, and servers probably made up about a quarter of that. HP had $600 million in Linux-based server sales in the fourth quarter of 2006 alone, which would suggest that, if the multiples are the same, HP's Linux-related business (including open source software riding on top of it and the services to implement it and support it) is now probably closer to $9 billion to $10 billion a year. That makes Linux and open source software about a tenth of HP's overall business--very roughly speaking. (HP, any time you want to give us the hard numbers instead of making us do estimates, I am all ears.)

Last summer, HP was the first of the top-tier systems providers to offer support on Debian Linux--in particular, on the "Sarge" Debian 3.1 release, which came out in June 2005. And while this is not a big revenue generator for HP, it shows that the company is interested in moving beyond the relatively easy task of offering commercial Linux from Red Hat and Novell and into the relatively uncharted waters of Debian Linux.

"There has been quite a bit of demand for Debian lately," explains Small. Since announcing Debian support last August, the Debian support, which is done by HP's own techies, has driven about $25 million in systems sales--primarily in Europe. He says that Debian is particularly popular in Germany, Spain, and South Africa. "A lot of customers develop applications in Debian, but then they have to go through the hassle of deploying on Red Hat or SUSE Linux because these are the Linuxes with enterprise-class support."

Small says that HP charges similar pricing for Debian Sarge support as its charges for Red Hat or Novell Linux support, which it offers customers as an OEM reseller. Incidentally, HP is not supporting the Ubuntu variant of Debian--at least not yet.

HP is not, of course, just interested in Linux. Last April, in an effort to move up the open source software stack to get a little implementation money, HP created a set of integrated open source software stack blueprints, which it distributed for free. These blueprints show system designers how to plug particular software, such as JBoss application servers, MySQL databases, and LDAP servers together.

In the past seven months, over 12,000 of these blueprints have been downloaded. The most popular blue print is for deploying J2EE-based application servers (either JBoss or Tomcat/Hibernate) on Red Hat Linux. Small says that the blueprints for deploying MySQL and PostgreSQL databases are also popular.

HP has no way of knowing exactly who is using these blueprints, but Small says that he knows of a $20 million deal that went down in Japan for running Linux and open source stacks on a collection of Superdome and ProLiant servers where the blueprints played a key role. Most of the people downloading the blueprints appear to be larger enterprises, too. "There's a lot of interest here at the high end. But as open source operating systems and middleware gets more popular, we'll expect to see an uptick from smaller customers for the blueprints," says Small.

The other trend that Small is seeing is that some companies, in an effort to control costs and to free budget for other projects, are deciding to standardize on Linux, open source middleware, and X64 servers. "By doing this, customers can use the money they save to get a better Web site, add customer relationship management software, or do something else the business needs."

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