After you've taken the largest computer company in the world and nimbly embraced one of the most important new phenomena in the industry, spending a tidy $1 billion in the process, what do you do for Act 2? That's the question facing Jim Stallings as he takes over the reins of IBM's Linux initiative. Though Stallings' Linux group is a relatively small part of IBM's Server division, the work he does affects thousands of employees all across Big Blue's many lines of business and his work will have a major impact on the future of Linux.

After spending over 15 years at Big Blue, followed by a six year span working for smaller companies, Stallings returned to IBM last year to work on the company's Fortune 50 accounts as vice president of VP for Integrated accounts. Four months ago he was tapped to replace former Linux GM Steve Solazzo. LinuxPlanet contributor Robert McMillan spoke on the phone with Stallings recently to ask him about his vision for the future of Linux and to try and get him to answer the big question: How much is IBM spending on Linux today?

LinuxPlanet: Now that you've had almost four months to work on Linux, what has surprised you?

Stallings: There are a couple of things that have stunned me. It's beyond surprise. It's shock. Particularly at the high end. These customers all have a Linux strategy envisioned for their company. They're way beyond the early adopter stage. They're very sophisticated about it. They understand those cost savings. They understand the efficiency. They've got return on investment models. They're beyond pilot stage. They're into what I would call the mass production stage. They're moving production workloads. They're working closely with their application vendors as well as their own application departments to move a lot of strategic applications over to Linux platforms.

They've done server consolidations. They've done the studies. They've done the consolidations. You've read the stories about Merrill Lynch and E-trade and a lot of the other multi-nationals. It's a real business to them, and it's really important to them.

So that's been the huge surprise. The other surprise has been that customers are looking for alternatives right now to proprietary architectures. They want an alternative to Microsoft Windows and they're serious about that. In a lot of cases they're asking for a proprietary proposal and an open source proposal.

The other thing that I've been surprised at is that I'm running into some medium-sized companies that run their business on Linux--the entire operation. All of their file and print servings are consolidated. All of their ERP apps are running on Linux. I've been with some companies that are doing that in the SMB space. And then on the Enterprise side, we've got companies that have visions, with target dates and quarters, in which they're going to have a great chunk of their company running on Linux.

LP: What does IBM see as Linux's most popular markets right now?

Stallings: One of the two biggest markets that we've seen over the past year for Linux adoption are in the financial services. Those companies in those sectors have been under a tremendous amount of pressure to consolidate and improve their costs--go to a different operating model and take advantage of the Internet. That's a big, big Linux market for us.

The other sector is the government, or public sector, which would include health care, life sciences, pharmaceuticals, as well as the University education system. Those are early adopters, but the opportunities there are tremendous, and that's another big business for us.

But what we're also seeing is that this is across all industries now. We've got major telecommunications customers. I've got a call as soon as you and I are finished. I'm talking with Hanford, which is a major grocery chain in the Northeast. They've got a commitment to go across their enterprise with Linux. We're talking about the next stage of that on a call today. It's in the distribution and retail sector.

In all of the sectors we look at, we've got Linux business in every single one. But the big two are the public sector and financial services.

Next: Examining IBM's Linux Investment »