One of the biggest investment banks in Europe is using Linux for up to 70% of its new IT projects after finding that running the open source operating system on Intel-based servers cut running costs by nearly half.
Dresdner Kleinwort Wasserstein (DrKW) is deploying Linux to run key front-office systems for trading and risk assessment.
The bank, which is using Red Hat's version of the open source operating system, is considering using Linux to support a grid computing project.
Although each deployment has to be justified to the business - and it does not have a formal policy on Linux - DrKW said it has seen substantial improvements in performance and reductions in cost by using Linux on standardised Intel hardware. The bank estimated that it has made annual cost savings of 45% by replacing Sun Microsystems servers with Intel-based servers from Hewlett-Packard.
It calculated it has seen an average 30% improvement in performance for some of its databases running on Linux.
Hans Christoph Classen, global head of risk IT at DrKW, said, "Linux is increasingly emerging as the bank's preferred choice on both a cost and performance basis. We are already using Linux in a number of our mission-critical business areas.
"We are finding strong support from our programmers and application managers to work with Linux because of the advantages it offers and because it is leading edge."
DrKW, which began using Linux in 1999, has been one of the most high-profile corporate users of open source software.
The widespread use of Linux by DrKW for some of its critical systems emphasises the way open source is entering the mainstream of financial services. Gary Barnett, a research director at Ovum, said, "Linux is definitely on its way into the mainstream for financial services. It is replacing Unix at a far greater rate than Windows."
In October, Computer Weekly revealed that Standard Chartered Bank is running its wholesale and retail banking systems in nine countries almost entirely on open source software.
Investment banks Credit Suisse First Boston and Morgan Stanley have also moved to Linux.
Andrew Butler, a vice-president at analyst firm Gartner, said, "There has been enormous investment by financial industry firms in moving towards Linux over the last few years.
"Banks have been abandoning Solaris [the Unix operating system from Sun Microsystems] because they believe it is cheaper to move to Intel-based hardware. Linux is the most natural fit for Intel hardware."
But he said that Linux has not yet matured enough to run the largest databases "You cannot run Linux on huge databases because it does not scale," said Butler.
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