What better application for an industrial-strength operating system
than heavy industry? It isn't making much news in the West, but Linux
is on the verge of becoming the dominant platform at many integrated
manufacturing companies in East Asia.
Most people familiar with the history of computing can cite a variety
of government and industrial applications that drove the early market for
computers. The very earliest applications of all involved the automation of
industrial processes. In fact, the granddaddy of all "data processing"
applications allowed French garment manufacturers to automate the process of
creating patterned sweaters -- back in 1801.
In the 1970s and '80s IT pioneers such as Digital Equipment Corp. spawned
an entirely new business focused on industrial automation, and heavy
industry grew to become an important market for software developers. Over the
last 20 years, American enthusiasm for computer assisted industrial
control systems has faded, along with big chunks of the country's traditional manufacturing base.
However, in the rapidly expanding industrial centers of East Asia,
computer integrated manufacturing is alive and well, and increasingly a
Linux-only environment. As vendors are quickly discovering, if you want to
market computing systems to heavy industry, they'd better be Open Source.
The most recent evidence for this Linux breakthrough is in the Japanese
steel industry. From a global perspective, there is far more steel-making
capacity in the world than the market would justify. The result has been ruinous
hyper-competition. Many North American and European steel makers have been run out of business. Japanese steel makers have survived by a mix of ruthless cost cutting
and by heavy investment in automated technologies.
Steel making is like most other highly integrated manufacturing
processes. Steel plants almost always require the development of highly customized
IT equipment and software. Most have relied on a limited number of
specialty integrators to develop and operate these closed systems. Toshiba and
Hitachi have traditionally won the bulk of these deals. While these business
relationships have produced reliable systems, they have also proved to be extremely
expensive. In the current competitive environment, it is not sustainable.
This past week, Nippon Steel, NKK Corp., and a number of other Japanese
steel firms let it be known that they are requiring vendors to
convert their systems to Linux platforms and to open up their source code. These steel companies are also expanding their vendor lists to include in-house Open Source
developers and IBM.
For example, starting in a few months, NKK will introduce a new
general-purpose computing system that will handle all 118 production lines at its huge
plant in the city of Kawasaki. Based on its internal cost of ownership
study, the company expects to save over $8 million a year in licenses,
support and administration costs. The company's Fukuyama operations are
undergoing a similar changeover.
According to the company, this conversion program began with the
conversion of its galvanized strip steel line back in early 2001. As part of that
conversion, the company dumped its centralized, special-purpose systems and built a
decentralized system of process control computers. NKK used modified white box PCs
running Linux and open software. Its initial studies suggested the firm would
save as much as 40% a year in IT costs. In addition, the company
hoped that it would be able to reuse many system elements as it upgraded. In
the past, the company had to strip out entire systems, forcing periodic
shutdowns and other costly disruptions to manufacturing.
Much of the code has been developed by an in-house team at the
company's KDK subsidiary, and the company hopes to market its expertise to other
Nippon Steel is undergoing a similar conversion. It recently introduced
a Linux-based process control system at its steel bar plant in Hokkaido
and at its blast furnaces in Kimitsu. The company estimates it will save
better than 50% over the proprietary systems it had used in the past.
These deployments presage a major shift in the Asian IT market.
According to the newspaper Nihon Keizai
Shimbum, Japanese manufacturers are rapidly converting to Linux systems and
leading much of the Japanese market in the process. The Linux server market in
Japan has exploded. Compound growth rates have approached 40% a
year since 2000. By 2004, computer makers are projecting Linux will be
on nearly a quarter of all servers in use across the country, and that
figure could prove to be conservative.
The vendor community is getting on board. Recently IBM, Fujitsu, NEC, and Hitachi announced they would be combining resources to develop a Linux distribution optimized for large Japanese corporate systems.
Other Asian manufacturers are jumping on the bandwagon. For
example, Linux is poised to become an important element in the IT strategies
of India's pharmaceuticals business. In China, government -linked
manufacturers are leading a phalanx of other companies and institutions by adopting
Linux or using the threat of Linux to force price wars among closed systems
Chinese and Hong Kong news outlets have been watching with some
amusement as Microsoft has become embroiled in a ruinous race with Sun
Microsystems to see which company can give away the most software to Chinese
businesses and institutions. Last spring, Sun donated millions of StarSuite
licenses to Chinese schools and business-affiliated "research
institutions." In response, Microsoft announced it would donate what it claimed would
be nearly $750 million worth of product and training services to China's
State Development Planning Commission for distribution to these same
institutes, universities and government-affiliated businesses. Many of these
institutes are little more than dressed-up manufacturing centers.
It all represents a staggering turnaround from the bullying stance
taken by closed system developers toward businesses and governments in the
area, and suggests how quickly Linux has begun to emerge as a viable and
potentially dominant player in the manufacturing sector.