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Bidding on Linux

It's cheap and it works. But can you run your company on Linux?
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The Linux operating system is hot. It's cheap. And it works. But can you run your company on it?

Wearing a blue windbreaker with a James G. Murphy Co. logo on it, Julie Murphy stands in the company's muddy auction lot in Kenmore, Wash., just north of Seattle. As she looks on, men in flannel shirts and logging boots inspect the tires and climb into the cabs of the used backhoes and dump trucks that will be going on the block shortly. Each year Murphy's company auctions off some $30 million worth of this sort of heavy equipment, along with used police cars, tools, and even the contents of an entire restaurant or sawmill.

But today's auction is different. For one thing, nearly 1,500 bidders have registered, far more people than the monthly auctions usually attract. And there's more than the average air of expectation in the auction yard. That is largely because of just one item: a one-of-a-kind, baby blue 1971 convertible Plymouth Hemi Barracuda "muscle car." Seized by police in Everett, Wash., in connection with a drug arrest, the car is in mint condition. No one knows how much it will go for when the bidding starts at noon, but it won't be small change: the city of Everett has suggested that the minimum bid be set at $250,000. One fellow has flown up from Phoenix to try his luck. Other bidders are on the phone from places like Blue Springs, Mo., and St. Paul, Minn. "This is one of the most exciting things we've ever sold," says Murphy.

In a previous life, Murphy was a certified public accountant at Arthur Andersen. Now she is chief financial officer, controller, and office manager of James G. Murphy Co. The company was founded in 1970 by her father, James. Murphy's older brother, Tim, is CEO and head auctioneer. Along with her many other duties, Julie Murphy is responsible for the company's computers.


Not every small business will be able to (or should) jump on Linux immediately.


And this auction, like all the others her father and his fellow auctioneers have held for the past four years, will run on Linux. In the company's cramped mail room, Murphy proudly points to a metal rack sitting in a corner behind the copier. It holds two computers that run Linux, the software program that has taken the computing world by storm. Since 1996 -- long before most people had ever heard of it -- James G. Murphy Co. has been using Linux to run its auctions. Today the company uses the program to run almost its entire business.

Linux, a computer operating system, is essentially a version of Unix, the software that runs powerful workstations sold by companies like Sun Microsystems and Hewlett-Packard. It has two big advantages over competing operating systems (like Microsoft Windows NT, for one), says Bill Campbell, the Seattle computer consultant who installed the Murphys' Linux system: It is dirt cheap. And it is incredibly reliable.

That reliability is important if you're in charge of a 30-employee family business running auctions that sometimes draw more than 1,000 bidders. This morning, while most of the crowd is jockeying for seats in the indoor auction hall to get the best view of the bidding on the Hemi 'Cuda, others are lining up in the office to pay for the heavy equipment and trucks they acquired during the morning's auctions. Using computer terminals and PCs hooked up to the Linux server, 10 cashiers are taking payments. All the information they need is already in the server: descriptions of the items to be sold were entered before the auctions began. Prospective buyers received bidder numbers when they arrived this morning. During the auction itself, workers frantically typed winning bids into the system, so when bidders come in to settle up, says Murphy, "you just punch in their number, and it tells you what lots they bought and how much they paid."

Just to be on the safe side, Murphy still uses every auctioneer's favorite manual backup system: slips of paper. That's how the business handled payments before buying its first computer in 1986. What would happen if the company's computer system were to fail during a huge auction like today's? It wouldn't be a pretty sight, says Murphy. "I would probably just jump out the window."

Fortunately, the system has never crashed. That sort of reliability is typical of Linux computers. "Some of our clients have Linux systems that have been running for a year solid," says Jim Capp, president of Keystone Programming Inc., a computer-consulting company in Harrisburg, Pa., that sells a lot of Linux systems.

Linux holds another attraction for small businesses: it is essentially free. That's because it was developed completely by volunteers, led by Linus Torvalds, arguably the world's best-known computer programmer after Bill Gates. Torvalds, who started work on Linux in 1991 while he was a student at the University of Helsinki, distributes the software free on the Internet. It takes patience and Web know-how to download it, however. So most people pay a modest price -- typically $30 to $59 -- to get Linux from companies like Red Hat Inc., Caldera Systems Inc., and Corel Corp., which provide it on a CD-ROM, along with manuals, tech support, and other applications.

Linux can also save small companies money because it runs well on older, less powerful machines. When Campbell installed E-mail and a firewall -- a security gateway between the company's computers and the Internet -- at James G. Murphy Co., two years ago, he used an old 486 computer that Murphy was preparing to jettison. "I could have sold them a new computer," Campbell says. "But Linux runs just fine on that computer, so why sell them hardware they don't really need?"

Linux also runs well on laptops, says Campbell. That's useful to Julie Murphy, because most of her company's auctions are run on location, sometimes at customer sites as far away as Texas or Virginia. Last November, for example, Tim Murphy and three employees headed off to the small logging town of Philomath, Oreg., where they auctioned off the saws, conveyor belts, and other equipment at two lumber mills. They took the auction software with them on an IBM ThinkPad 560 notebook computer running Linux. As with the computer system in the company's home office, the auction cashiers used computer terminals networked to the laptop to take payments.

Two years ago few people had heard of Linux. Then its impressive reliability and low cost started attracting attention. Now major computer companies like IBM, Dell, and Gateway sell it. It is widely used on the Internet -- 31% of Web sites are powered by Linux -- and Linux companies have pushed aside Web start-ups to become the hottest items on Wall Street. The initial public offering last December of VA Linux Systems Inc., a Sunnyvale, Calif., company that sells computers with Linux preinstalled, shot up 698% on the first day. That set a record for the highest gain made by a new stock offering.

As Linux has become more widely accepted, several large companies -- such as Burlington, N.J., retailer Burlington Coat Factory Warehouse Corp. and New York City's Cendant Corp., which owns Ramada hotels and inns and Avis Rent A Car -- are starting to use it. Now small organizations as well are discovering that Linux may be a good choice for them. Sam Brown, a private investigator in San Francisco, uses three Linux computers to do research on the Internet and to pick up E-mailed reports from his six investigators. And the Paducah Sun -- a 135-employee newspaper in Paducah, Ky., with a circulation of about 30,000 -- bought a Linux system last fall to archive stories and photographs. The newspaper considered buying an archiving system running on a computer from Sun Microsystems but decided to go with Linux instead. "It was significantly cheaper," says publisher Jim Paxton.

Both Brown and Paxton were introduced to Linux in the same way that the Murphys were, through a computer consultant. That's now happening a lot, as folks like Campbell begin using Linux more and more. James G. Murphy Co. was the first of Campbell's customers to begin using the system. Now nearly all the computers he installs run Linux. "In the last year I've put in 3 systems on SCO Unix," Campbell says. "In the same time period I've installed at least 30 new systems running Linux."

Not every small business will be able to (or should) jump on Linux immediately. One problem: many software programs still don't run on the system, says George Weiss, a research director at the Gartner Group, in Stamford, Conn. Campbell's three customers who are not using Linux, for example, are running an accounting package from RealWorld Corp., in Manchester, N.H., which doesn't work on Linux. And Microsoft, which views Linux as a threat, has yet to issue such software mainstays as Word or Excel for Linux.

The lack of Microsoft Office apps isn't necessarily a showstopper, however. Julie Murphy, for example, is using an office suite for Linux called Applixware, from Applix Inc., in Westboro, Mass. "If someone E-mails me a Microsoft Word file, it converts it cleanly," she says. "You don't know you're not on a Windows system."

Weiss also suggests that support can be a crucial issue. "Linux is no simpler than any other version of Unix," a notoriously complicated system, he warns. Small organizations that don't have a trained programmer on staff should make sure they have a Linux-savvy computer consultant to install and support it, he says.

Murphy was confident that Campbell knew what he was doing when he suggested switching to Linux. She's been relying on Campbell's computer know-how since 1988. "I don't care what the computer is running," she says, "as long as it works."

The bidders packed into the auction hall this morning don't care either. Not with that one-of-a-kind Hemi on the block. At a few minutes past noon, the crowd falls silent as the bidding begins. The first bid is immediately doubled to $200,000. A man seated high up in the bleachers waves his hand -- he'll pay $225,000. That figure is immediately raised by a bidder on the phone from San Mateo, Calif. In less than five minutes, the price has jumped to $350,000. The man in the bleachers drops out. It's now down to two: the bidder on the phone and a guy on the floor, who's practically holding his breath as he stands next to the car he hopes to take home with him.

There is a pause while the bidder on the floor converses on his cell phone and considers what to do. At last he bids $380,000. All eyes are now on the auctioneer holding the phone. Almost immediately he stabs the air with his hand, signaling yes -- the bidder on the phone will go higher. The man on the floor shakes his head. He's done. The car has just been sold to the bidder from San Mateo for $400,000.

For that amount of money, you could buy a lot of Linux systems.

Dan Orzech is a freelance writer in Philadelphia.


For more about Linux, see "Good Stuff Cheap" in Book Value.


Please e-mail your comments to editors@inc.com.

Last updated: Jun 15, 2000




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