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Merrill Lynch counts the pennies and goes for Linux
It's the people who cost the most

By Robert Lemos

Published: Monday 09 June 2003

The 'Thundering Herd' is to switch to Linux to save on the heavy costs of managing Windows.

Mark Snodgrass, the bank's vice president of IT, told an audience at the Enterprise Linux forum that it wasn't just the costs of licences that made the savings. "It's the people that cost the most," he said.

Merrill Lynch's new plans for its information infrastructure call for running much of its Linux applications not on their own physical machines but in virtual machines running on high-end servers.

Such a scheme simplifies management and allows for rapid deployment of new Linux "servers" by activating a copy of a stored pre-configured image in as little as 2 minutes 14 seconds.

Using such virtual Linux servers to store files could cut costs dramatically, he said. Keeping their file systems on Windows servers would have cost the company $600,000 in hardware and five times that to pay for the personnel to manage the servers.

"We are not trying to promote Linux," Snodgrass said. "We are just trying to reduce the cost of ownership. We know that Linux is not for everything. But there are not many applications that require more than Linux can give us."

Snodgrass's group proposed replacing the company's Microsoft Exchange servers with a Linux-based solution that would have all the same collaboration features and have a cost savings of 70 percent to 80 percent.

However, for other reasons that Snodgrass wouldn't discuss, the company's executives decided to stick with Exchange but outsource the management of the groupware to save money.

Not everyone agrees that Linux saves money, however. Last year, market researcher IDC released a report that indicated that the five-year cost of ownership for four out of five applications would be lower if Microsoft software was used.

The sole Linux winner was Web server software, according to the report. Snodgrass said he wasn't familiar with the study, but his own data indicated that running virtual Linux servers saves a lot of money compared with running those same services under Windows.

"We've done our numbers, and we are a bank, so we know our numbers," he said.

Robert Lemos writes for news.com