December 28, 2005

Financial institutions lead march to Linux in Korea

Author: Michael Newlands

In the latest in a series of moves aimed at getting Korean government institutions to move away from their reliance on Windows and Unix and adopt open source software, two state-owned financial institutions planned to launch the country's first Linux-based Internet banking services in December.

The state-owned Korea Post and the National Agricultural Cooperative Federation (NACF) have both said their systems will be up and running for Linux users before the end of December as a part of the open source software fostering projects of the Ministry of Information and Communication.

The Ministry has been encouraging public organizations and institutions such as Korea Post, the Defense Ministry, and the Unification Ministry to adopt Linux when developing new network systems.

Until now online banking in South Korea has been available only for PCs with Microsoft's Windows operating system and Internet Explorer browsers.

"The Ministry is fostering open source software such as Linux in order to end the monopoly by Microsoft. Linux system users have demanded the new banking system as well," Korea Post official Oh Kwang-soo was quoted as saying by the Korea Herald newspaper. "We've decided to launch it because we feel responsible as a public organization. We believe that private firms will follow us once our Linux online banking system is proved successful".

A spokesperson for the NACF said that it already completed developing the system, and is awaiting government approval for a security test.

"Linux users will be able to use all the transaction menus currently available on the Windows version," Jung Jae-hun, manager of the federation's Internet banking department, told the newspaper. "We have launched promotion campaigns on Linux users' forums, though we don't expect a large number of people to use it."

In the absence of any definitive figures on Linux usage in Korea, private banks are still reluctant to develop Linux online banking services. The NACF estimates there are more than 200,000 Linux users, while Korea Post puts the figure at a much more conservative 30,000.

One private-sector institution, Shinhan Bank, last year released online banking software for Apple Macintosh computer users, but says there are no immediate plans for Linux although this is under consideration and may be launched next year. According to the Korea IT News online service, SC First Bank is also considering a Linux service next year, but Kookmin Bank, the country's largest, says it has no plans to accommodate non-Windows users.

The government is also planning to introduce Linux on a number of other fronts next year and is hoping the private sector will follow suit. It plans to spend at least 100 billion won (approximately $100 million) promoting the adoption of open source software next year in the public sector as a part of its e-government drive.

The Ministry of Planning and Budget (MPB) announced earlier this year it plans to use open source software for 37 projects in 23 government agencies next year. These include a next-generation e-learning quality management system to be established by the Ministry of Education and Human Resource Development, a meteorological information exchange system to be set up by the Meteorological Agency, and a food and drug integrated information system courtesy of the Food and Drug Administration.

Figures compiled by the MPB suggest the use of open source software in the 37 projects is expected to save the government 6.1 billion won or around 22 per cent on the total hardware and operating system cost of 28 billion won.

The MPB also plans to allow government organizations to independently select software they want to use, and jointly sponsor open source classes for software engineers with the Korea Software Promotion Agency.

Other open source initiatives this year have included several Korean organizations joining the Open Source Development Labs (OSDL), the global consortium dedicated to accelerating the adoption of Linux. These include the Electronics and Telecommunications Research Institute (ETRI), which became the first member from Korea and which is participating in the Lab's Carrier Grade Linux (CGL), Data Center Linux (DCL), and Desktop Linux working groups.

The first private sector company to join was Haansoft, Korea's leading developer of software, which is also taking part in the CGL working group. Haansoft is the runaway market leader for Korean-language office software and has a 70% market share with its word processor. The company is jointly developing the Asianux Linux server operating system with Red Flag Software of China and Miracle Linux of Japan.

Also joining OSDL during 2005 were the Korea IT Industry Promotion Agency (KIPA), which is part of the enterprise service working group, and Miji Research, which has joined the Mobile Linux Initiative (MLI) working group. Miji is now an executive member of the Linux Phone Standard (LiPS), an international standards group launched on November 15. The KIPA is now in talks with OSDL to establish a branch office of the standards group in Korea.

On the domestic front it has also been a good year for local private-sector Linux developers. Sales at Macroimpact, a Linux-based file system developer, rose 60% this year compared to last year. Terrace Technology, which specializes in spam-blocking solutions, supplied Linux-based solutions to Korea Telecom, the Korea Science & Engineering Foundation, and NC Soft this year and said the number of sites it covers increased by 20%. "Seeing that portal sites are beginning to migrate from Solaris or other Unix systems to Linux, we anticipate that our sales next year will double those of this year," director Ji Seung-yeong told the Korea IT News.

Linux-based clustering solution firm Clunix also reported a substantial rise in business and a move towards Linux. Chief executive Gwon Dae-seok said, "Organizations are beginning to select Linux-based clustering solutions as installation of Linux systems is expanding, and their prices are half those of Unix solutions."

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