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Like blues musicians who once wandered the South singing for their supper, this 18-year-old high school dropout lives out of a suitcase--sometimes trading his software programming skills for a place to crash or some spending money. His travels have taken him far and wide, from a programmers' confab in Istanbul to Massachusetts Institute of Technology's famed Artificial Intelligence Laboratory. Walker's fresh, earnest face tells all: He's an idealist. He believes in sharing his software innovations with others. Three hundred miles to the south, on the 12th floor of a Manhattan office tower, Walker has an unlikely soul mate. Birnbaum, 37, is managing director for computing at brokerage giant Morgan Stanley's Institutional Securities Div. He's so buttoned-down that he wears a suit on Casual Friday. You would think this cog in the capitalist machine would have nothing in common with young Walker. But Birnbaum is betting Morgan Stanley's ( 186 MWD ) technology future on the kinds of software projects, called "open source," that Walker participates in. He's busy replacing 4,000 high-powered servers running traditional software with much cheaper machines running Linux. Does it bother him that counterculture kids like Walker have a hand in Linux? Just when it seemed the technology world had lost its fizz, a powerful movement is on the rise. A ragtag band of open-source programming volunteers scattered around the globe--and hooked up via the Internet--is revolutionizing the way software is made. At the heart of what they do is Linux, an operating system flexible enough to run everything from an IBM supercomputer to a Motorola ( 189 MOT ) cell phone. Because it's open source, Linux can be downloaded off the Web for free--though it's typically bought by corporations as part of a package that includes service. Imagine the havoc in the energy business if some newcomer started giving away gasoline. Linux is bringing on a convulsion of that magnitude in tech. Practically every tech company is being forced to figure out how to take advantage of Linux--or to avoid being swept aside by it. And don't be fooled by Linux' harmless-looking penguin mascot, Tux: This stuff is shaking up the balance of power in the computer industry. It poses the biggest threat to Microsoft's hegemony since the Netscape browser in 1995. Backed by technology titans such as Intel ( 190 INTC ), IBM ( 191 IBM ), Hewlett-Packard ( 192 HPQ ), and Dell ( 193 DELL ), Linux is just now going mainstream. From DaimlerChrysler ( 194 DCX ) to Tommy Hilfiger ( 195 TOM )--not to mention just about every major brokerage on Wall Street--Linux is gaining ground. Meanwhile, Linux is finding its way into countless consumer-electronics gizmos, including Sony PlayStation video-game consoles and TiVo TV-program recorders ( 196 TIVO ). The answer is absolutely, positively, unequivocally yes," says Steven A. No one could have seen this one coming, not even Linus Torvalds, the young Finnish programmer who wrote Linux as a cut-down version of Unix for the PC in 1991. Torvalds figured it would be a free plaything for computer hobbyists who weren't satisfied by what big tech companies like Microsoft and IBM produced. Corporations under intense pressure to reduce their computing bills began casting about for low-cost alternatives. This made it possible for corporations to get all the computing power they wanted at a fraction of the price. The third ingredient was widespread resentment of Microsoft and fear that the company was on the verge of gaining a stranglehold on corporate customers. Riding that wave will give us choices going forward," says John A. While it is holding on to its monopoly in desktop systems, Linux' march into servers threatens a key growth area--one that controls much of the Internet. But James Allchin, the group vice-president who runs the Windows business, calls Linux "the No. Because it's free, Linux is undercutting Microsoft much the way Microsoft has gutted its rivals with lower prices for the past two decades. But Microsoft insists that Windows is more capable than Linux and argues that innovations--such as its Tablet PC technology--will keep coming from commercial software outfits. One Microsoft executive, chief strategist Craig Mundie, even calls Linux unhealthy for the technology industry. The computer industry has been built on a simple premise: Companies invest to create software, sell it, and pour a good part of the proceeds into building more. Now, with the open-source philosophy, that stream of revenue is threatened. And it's not just because the Linux operating system is free. Before using open-source software, tech companies must sign a license in which they promise to give away innovations they build on top of it. Longer term, the open-source movement threatens vast sectors of the software industry. True, since the volunteer programmers often lack specialized knowledge, complex business applications are probably beyond their range. But basic open-source databases and e-mail are already available. What happens if corporate customers begin gobbling them up? While no one knows how far open source will go, it could deflate profits. Like all big shifts, the Linux phenomenon will produce winners and losers. Likely winners include IBM, which specializes in high-performance computing and is selling twice as many Linux servers as any other computer company. Processor maker Intel is riding Linux' coattails into the world of high-powered computing. And Dell is pumping out low-priced Linux servers and selling them directly to companies via the Net. While Microsoft stands to lose from Linux, the movement is inflicting far greater damage on Sun. Some of Sun's customers are migrating to Linux machines, which perform similar tasks at a fraction of the price. SCO Group, holder of the original patents for Unix software upon which Linux is based, has announced plans to form a licensing division and hire superlawyer David Boies to press its claims against sellers of Linux. Another potential problem: There are a handful of commercial versions of Linux. If they evolve into substantially different programs, software companies that sell applications might have to create a separate version for each type of Linux. None of this, though, looks likely to halt Linux' advance any time soon. So far, the threat of patent claims is not deterring customers. And sellers of Linux vow to keep their versions compatible with one another. While many companies haven't tried it yet, analysts expect an improved version coming out this year to tempt a new wave of corporate tech buyers. The Linux phenomenon spreads like water--finding its way into all sorts of surprising nooks and crannies. When Torvalds started writing the operating system on a $3,500 computer while a graduate student in Finland, he made it both compact and flexible, so it could be used in a host of ways. He also decided to share the technology freely with others. The idea: Take it, build something, share what you make. He had tapped into a vibrant underground community--true believers in the principles of open-source software--that would help him build Linux into a global phenomenon. Torvalds, now 33, still orchestrates this digital quilting bee. He has final say on everything that goes into the updates of his operating system--and doesn't mind being called the "benevolent dictator" of Linuxland. These days, Torvalds' day job is programming for startup chipmaker Transmeta Corp. But for the most part he prefers to stay in the background, writing code, exchanging e-mails with his comrades-in-arms, and spending his free time with his wife, Tove, the six-time women's karate champion of Finland, and their two daughters. While he makes no money directly from Linux, he cashed in on the boom modestly by selling some stock he was given before the 1999 initial public offering of Linux seller Red Hat Inc. After that, he traded in his old Pontiac for a sporty BMW Z3. Mainly, he says, he just wants to have fun, which he considers a prerequisite for good programming. The open-source movement's roots are decidedly more radical than Torvalds'. In this softwar...
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