AT&T weighs switch to Linux from Windows

AT&T Corp. is testing Linux software as a replacement for Microsoft Corp.’s Windows operating system, which runs the 70,000 personal computers used by its employees.

By TIERNAN RAY
BLOOMBERG NEWS

http://seattlepi.nwsource.com/business/193873_attlinux06.html

A decision by AT&T to abandon Windows would be Microsoft’s biggest loss to the 13-year-old Linux system. A surge in viruses and efforts to cut costs have driven customers to look for alternatives to Windows, which dominates the $10 billion market for PC operating systems.

"Just like every other chief information officer in the country, I have to worry about reliability, security, productivity and lowering my costs," Hossein Eslambolchi, AT&T’s information chief, said in an interview yesterday. AT&T is the largest U.S. long-distance phone service provider.

Microsoft, which is growing more slowly than Linux in the market for server computers, is now under pressure in personal computers, where it has a 95 percent share.

Linux gained a foothold in Europe, where the city of Munich, Germany, decided to switch 14,000 PCs. South Korea, China and Japan are jointly developing a Linux product as an alternative to Microsoft.

"It translates into pricing pressure" on Microsoft, said Brendan Barnicle, an analyst at Pacific Crest Securities in Portland, who rates Microsoft shares "outperform" and owns them. Microsoft gets about 80 percent profit on each Windows PC sale.