E*Trade Switches to Linux

The Menlo Park, Calif.-based company said this week that it's switching its entire architecture from a closed server platform to one based on Linux. By moving to the open architecture, E*Trade officials say they can deliver better services more cost-effectively than its existing systems can.

To help it make the switch, E*Trade has tapped IBM and its Global Services division, which will help the company migrate to IBM Intel-based eServers running the Linux operating system.

In making the announcement, E*Trade executives said they expected the switch would, among other benefits, result in a more stable Web site and offer three times the user capacity of its current infrastructure.

"E*Trade selected Linux because we have found that open systems and open standards provide an optimal marriage between the best total cost of ownership and the best performance," said Josh Levine, CTO and managing director of Europe, Africa and the Middle East for the financial services provider.

The E*Trade account is a big win for IBM, which continues to build its Linux offerings and cutomer base. Last week the company announced it would release a Linux-only mainframe.

In a speech at LinuxWorld this week in New York, an IBM executive said the open-source movement continues to transform e-business and will end the days when vendors could use a proprietary platform to maintain control over their customers. He also cited E*Trade's commitment to Linux as a prime example of the trend.

"For decades, the proprietary model of computing has defined the computer industry. That day is over, and those who don't realize it's over are on the wrong side of history," said William Zeitler, senior vice president and group executive of IBM Server Group.

Another company building its Linux offerings is Sun Microsystems, which announced this week that it was preparing to release a Linux version of its iPlanet server for e-business.