Low price boosts Linux growth in India

By SiliconIndia   |   Tuesday, 26 September 2006, 07:00 Hrs
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Looks like India is molding a new platform for Linux and the entourage is being lead by state schools. An example would be that of Cotton Hill Girls High School in Kerala, where all the 4,000 students are adapting themselves to Linux rather than rival Microsoft. In fact, computer science based on Linux software will be made mandatory in all of the state's high schools over the next two years.

"As a government that keeps the interest of society over corporations, we are committed to the use and development of free software," says V.S. Achutanandan, Chief Minister of Kerala.

Linux Software is based on open source model, meaning that its code is available to developers worldwide to tweak and improve to adapt it to their own needs unlike proprietary software from companies such as Microsoft. The software itself is often given away for free.

While Business Week Online reports that 18 of India's 28 states either are using Linux or have pilot projects for its use in various government schools, the federal ministries of defense, transport, communication, and health, are also using the software on server computers. India "is one of the key countries I have been focused on," says Scott Handy, IBM’s global Linux boss. "India has been a star."

But that does not mean Linux is winning the battle over Windows. It’s not even close. But judging by recent statistics that show Microsoft had 68 percent of the server market, versus Linux' 21 percent this June in comparison with the 70 percent for Microsoft and 11 percent for Linux two years ago, the distance is being bridged.

While most of its progress has been in server software, government agencies and businesses use for their Web sites, payroll, and other key tasks. Deepak Phatak, from Indian Institute of Technology, Bombay, expects India to be the first country to use Linux extensively over a large user base across many sectors by the end of the decade.

Researcher IDC estimates that the Indian Linux market will grow by 21 percent annually, to US$19.9 million in 2010, mostly for services provided by companies such as Red Hat-IBM, and locals like Wipro and Tata Consultancy Services.

That's a modest amount compared with Microsoft's Indian sales of nearly $200 million last year. But Microsoft's lost opportunity is still substantial, since it sells Windows at $50 or more per copy to makers of PCs and servers, and then it typically sells other programs that run on top of it.

The shift in government has spurred more businesses to use Linux, too. One convert is state-owned Life Insurance Corporation of India, which in 2005 switched its servers to Linux. With the $2 million in savings from using the free software, LIC is adding more computers. Today it has 70,000 PCs, all running Linux, and by next year it expects to have more than 100,000.

Others are taking a more measured approach. Eighteen months ago, when Bombay-based Unit Trust of India wanted to set up a call center, the bank settled on Linux for its servers even as it continues to use Windows on its PCs. "The openness of the system appealed to us," says UTI President V.K. Ramani. Now, he says that the bank is putting its credit-card system on Linux as well.

However, Microsoft is fighting back. The company has been working on India-specific products at its development center in the southern city of Hyderabad. One of them is Windows XP Starter Edition, a scaled-down version that can only open three programs at once and doesn't support advanced networking. But, it sells for just over $20, or less than half the price of the original.

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