Global Economics

Linux Spreads its Wings in India


With 4,000 students and just 21 computers, the Cotton Hill Girls High School in the south Indian city of Trivandrum wouldn't appear to be at the vanguard of anything related to information technology. Yet the 71-year-old school is abandoning Microsoft (MSFT) Windows software in favor of its free, open-source rival, Linux. So when students -- typically eight to a machine, seated at two benches -- turn on their PCs they see Linux desktop software that helps them navigate their way to all manner of math, graphics, and writing programs. ``We're using something called Linux,'' says 12-year-old Arya VM as she plays with Tux Paint, a Linux drawing and painting application. And Windows? ``Never heard of it,'' she says.

The school is one of 2,600 in the state of Kerala making the shift. That means each of the state's 1.5 million high school students will grow accustomed to working not in the Windows environment familiar to computer users worldwide, but in Linux. And over the next two years, computer science based on Linux software will be made mandatory in all of the state's high schools. ``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, Kerala's sarong-clad chief minister.

India is shaping up to be a key battleground in the global assault of Linux. The country's long history of snarling at corporate interests, its widespread poverty, and its nascent PC culture make it fertile territory for the communitarian ethic of the upstart computer operating system. Two years ago, New Delhi said the best way to improve computer literacy in India was to adopt open source software in schools. Although Kerala is the first to introduce such a program statewide, 18 of India's 28 states either are using Linux or have pilot projects for its use in various government departments and schools. The education ministries in most states, and in Delhi the federal ministries of defense, transport, communication, and health, are all using the software on server computers. And eight state governments have put their treasury operations on Linux, while the western state of Maharashtra is using it to revamp health-care systems. India ``is one of the key countries I have been focused on,'' says Scott Handy, IBM's (IBM) global Linux boss. ``India has been a star.''

That's not to say Linux will be knocking Windows off the desktop anytime soon. So far, most of its progress has been in server software, programs that government agencies and businesses use for their Web sites, payroll, and other key tasks. In June, Microsoft Corp. had 68% of the server market, vs. Linux' 21%, compared with 70% for Microsoft and 11% for Linux two years ago. The desktop is a different story: Just 3% of India's PCs use Linux. Still, that's about triple the level in the U.S. ``We expect India to be the first country to use Linux extensively over a large user base across many sectors by the end of the decade,'' says Deepak Phatak, an open-source evangelist from Bombay's famed Indian Institute of Technology. Two years ago, he took a yearlong sabbatical to travel across the subcontinent and make a push for Linux.

Unlike proprietary software from companies such as Microsoft, Linux is based on an open-source model. That means its code is available to developers worldwide, who can tweak it to make it better or adapt it to their own needs. Since the software itself is often given away for free, revenue numbers for Linux don't add up to much. Researcher IDC (IDC) estimates that the Indian Linux market will grow by 21% annually, to $19.9 million in 2010, mostly for services provided by companies such as Red Hat (RHAT), IBM, and locals like Wipro (WIT) 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. And if students in the emerging tech powerhouse never get any experience with Windows, the damage a decade from now could be far greater.

The shift in government has spurred more businesses to use Linux, too. One convert is state-owned Life Insurance Corp. 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, the bank is putting its credit-card system on Linux as well.

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. And unlike the full Windows it comes in 10 Indian languages rather than just English and Hindi. While ``it's too early to say'' whether Linux has hurt sales, ``we are concerned'' about its rise, says Radhesh Balakrishnan, Microsoft's director of platform strategy for India, who moved from the U.S. in July. ``We need to demonstrate superior value to our customers,'' he says.

SERVICE TROUBLE. Linux, meanwhile, is having some growing pains. One issue that has slowed its spread is counterfeiting. Since software is widely pirated in India, many users pay nothing for the Windows operating system and other Microsoft applications that they use. Also, since Linux is distributed free, it's not always obvious whom to call for service. Companies such as Red Hat and IBM support the software -- for a fee -- but they're having trouble finding Linux-trained engineers in India.

Those issues have led some companies to abandon Linux. For instance, North Delhi Power Ltd. started using Linux both in its servers and on the desktop in 2002. But the Linux e-mail program it was using, Sendmail, never quite worked right. The company soon switched to Windows and Microsoft's Exchange e-mail server, and it has no plans to go back. ``There were immense maintenance, service, and upgrade issues,'' says Akhil Pandey, NDP's principal executive officer. The good news for Linux? As all those girls from Cotton Hill -- and millions of other students -- grow up using the software, those issues may no longer loom so large.


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