LatAm bank drops NT for Linux mainframe

Venezuela-based Banco Mercantil has recently completed the first phase of a project replacing 30 Microsoft Corp. Windows NT servers with a single IBM Corp. mainframe running Linux, the companies plan to announce on Thursday. The project is one of the first announced Linux deployments by a large financial institution, and Banco Mercantil is among the first Latin American enterprises to adopt Linux, according to IBM.

Banco Mercantil is using an IBM mainframe running a SuSE Linux AG distribution of Linux to handle file servers, a firewall, and other basic infrastructure tasks. The bank is not yet using Linux for any of its core financial transaction needs.

“This announcement is yet another proof that Linux is ready for prime time,” said Pete McCaffrey, director of e-business strategy for IBM’s eServer division. “What they wanted to do – what a lot of our customers are trying to accomplish – is stop the growth of server farms. (Customers) are trying to consolidate and get their arms around IT costs.”

International Data Corp. (IDC) analyst Al Gillen said Banco Mercantil’s consolidation of servers is “the kind of (Linux) deployment we would expect to see. … It’s a great way to leverage the mainframe.” (IDC is a subsidiary of International Data Group Inc., the parent company of IDG News Service.)

He does not, however, see Linux as a serious competitive threat to NT in the enterprise market, at this point. “Look at the workloads that they’re putting on. It’s basic infrastructure workloads, not financial transactions. Those kind of applications are in short supply, and until those applications are out, people won’t move their heavy-lifting applications onto Linux,” Gillen said.

IBM’s McCaffrey said he foresees a “natural evolution” toward increased enterprise Linux dependence. “Today, a lot of applications are infrastructure-based, but we’re seeing different types of applications move into a Linux environment. … It’s starting to happen,” he said, noting SAP AG’s recently announced plan to port its software to Linux.

“With Linux, when it first came on the scene, you had a lot of tire-kickers. Now, customers are quickly moving beyond that into pilot projects,” McCaffrey said.

IBM, based in Armonk, N.Y., can be reached at Banco Mercantil, in Venezuela, can be reached online at