China's biggest bank makes switch to Linux

Other banks expected to follow suit

SHANGHAI -- China's biggest bank plans to deploy Linux on servers across its network of 20,000 national branches in a project that may be the biggest Linux deployment yet seen in China, according to an executive involved with the deal.

Under the terms of an agreement announced yesterday, the Industrial and Commercial Bank of China (ICBC) plans to gradually roll out Turbolinux Inc.'s Turbolinux 7 DataServer operating system for all of its front-end banking operations over a three-year period. Financial terms of the deal weren't disclosed.

What makes this deal special is its size. With $640 billion in total assets, ICBC is China's biggest bank, serving 100 million individuals and 8.1 million corporate accounts at more than 20,000 branch offices across China. When the project is completed, many of ICBC's 390,000 employees will be accessing applications hosted on Linux servers on a daily basis.

ICBC chose Linux in part because its existing front-end applications, which were developed in-house, run on The SCO Group Inc.'s SCO Unix, and migrating them to Linux was determined to be an easier upgrade path than switching the applications to Microsoft Corp.'s Windows operating system, according to Claude Zhou, general manager of Turbolinux China.

ICBC has been granted a site license, and front-end applications based on Turbolinux 7 DataServer will be rolled out on a "step-by-step" basis to all of ICBC's 20,000 offices, Zhou said. ICBC employees will access the applications from terminals. "This is the biggest Linux implementation in China," according to Zhou.

ICBC is in the process of choosing a systems integrator to handle the project. Bank executives are expected to announce their decision soon, Zhou said. Officials from ICBC weren't available this week to discuss the project.

ICBC isn't the only one of China's four main banks to have decided to deploy Linux. For example, Bank of China has deployed Linux distributions from Turbolinux and Red Hat Inc. in regional projects.

More banks are expected to follow ICBC's lead with large-scale Linux deployments, according to Zhou. Agricultural Bank of China, another of the country's top four banks, is expected to announce within the next month a tender for a Linux site license that is similar to the ICBC project, he said.

The fourth major bank, China Construction Bank, is also expected to announce sometime this year plans to move its IT systems to Linux, according to China's state-run media.

The shift to Linux is driven by the banks' need for better software performance and better vendor support, said Nielse Jiang, an analyst at IDC in Beijing. Currently, most of these banks are running their applications on SCO Unix and they are looking to upgrade their systems. "In China, SCO Unix offers very weak support for customers; they have so few employees," he said.

The banks have also opted for Linux because of lower operating costs and the relative ease of porting their applications from Unix to Linux, Jiang said. They also pay close attention to what the other banks are doing. "If one successful case has been implemented, the other banks will consider doing that," he said.

Copyright © 2005 IDG Communications, Inc.

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