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Linux Gains Ground

While still cautious on open source, insurers are seriously studying-and increasingly implementing-Linux-related solutions.

While still cautious on open source, insurers are seriously studying-and increasingly implementing-Linux-related solutions. Arbella Insurance is like a lot of insurance companies, reckons Richard Leek, senior manager, information systems, of the Quincy, Mass.-based P&C carrier with $1.04 billion in assets. Estimating his company to be at about the 60th percentile in terms of the application of new technology, he says the attitude toward Linux is probably a common one: "We have a lot of our guys looking at the Linux option, but we haven't come across any viable uses yet.'

While interested in the versatility and flexibility Linux might be able to offer, Arbella lacks the resources to devote to a non-production use of the operating system, and has reservations about the system's viability for many production needs. The carrier is in the process of moving major applications away from an outsourced mainframe arrangement to a more flexible architecture, but Linux doesn't qualify. "Our enterprise claims application is an old client/server application which will be migrated to a Web architecture," Leek relates. "[The system] is not certified on Linux, and we're not willing to take the risk to bring something like that onto an uncertified platform. The same would be true for a lot of other applications we're looking at."

Arbella is not alone in its concerns. Lack of a complete and fully integrated software environment tops a list of concerns businesses have about Linux, according to a recent InformationWeek study, with the lack of management tools being another issue of concern. But even a limited opportunity is still an opportunity.

"I don't know if I'd do a lot of my core business on Linux, though not because of the stability of the product, but more because of the unavailability of resources associated with being open source," says Darren Joslin, assistant vice president, distributed systems, Zurich North America (Schaumburg, Ill., $13.6 billion in premiums written in 2002). But Linux's limitations haven't dampened Zurich's enthusiasm for using the operating system. "Linux is a strong play for us," he adds. "It's a matter of developing and embracing point opportunities to continue to demonstrate its viability."

Among those point opportunities are front-end e-business services. Zurich subsidiary Farmers Insurance (Los Angeles, $12 billion in assets) has already implemented a Linux-based Red Hat (Raleigh, N.C.) solution to run its independent distributor-facing new business Web application. That application is only the beginning of the Linux opportunity for Zurich, according to Joslin, who sees the chance to do high-end processing for a very low cost. "We see Linux replacing a lot what of what we've done in the (Sun Microsystems, Santa Clara, Calif.) Solaris world for e-business front-end projects," Joslin relates. "We feel Linux and Apache (Lincoln, Neb.) server combinations will really help to lower our costs and improve our performance and support capability to support our growth over the next year."

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