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ATM industry largely indifferent to idea of new OS

Linux, a scaled-down version of the Unix operating system created by Finnish programmer Linus Torvalds in 1991, is making great gains in the server and desktop PC markets. The ATM industry, however, is largely indifferent to Linux. Many vendors say it's not realistic for the ATM business to support more than one operating system.

May 15, 2003

Linux, a scaled-down version of the Unix operating system created by Finnish programmer Linus Torvalds in 1991, is emerging as a fast-growing alternative to Microsoft Corp.'s Windows and Sun Microsytems Inc.'s Solaris.   According to a Business Week cover story titled "The Linux Uprising," Linux in 2002 commanded 13.7 percent of the $50.9 billion market for server computers. The figure is expected to grow to 25.2 percent by 2006, which would put Linux second only to Microsoft. IDC, a consulting firm cited by Business Week, said that Microsoft's 59.9 percent share of the market will begin sliding in 2003.

Linux also has 2 percent of the desktop market, a number that will likely rise now that Wal-Mart is selling $200 Linux-based PCs. It also drives a variety of consumer devices, including Sony PlayStation game consoles and TiVo recorders.

According to the Business Week article, Linux "poses the biggest threat to Microsoft's hegemony since the Netscape browser in 1995."

What about ATMs?

One area where Linux appears to be making little if any headway, however, is the ATM business.

For years, most bank ATMs have been based on IBM's OS/2 operating system. Retail ATMs ran on proprietary embedded systems. Now both kinds of machines are migrating toward Windows-based platforms.

At an ATM channel planning seminar last June in Washington, D.C., Phil Kasper, assistant vice president of marketing and product management forNCR'sSelf-Service Solutions, Americas, said that NCR expected to ship as much as 50 percent of its U.S. ATMs with a Windows-based system (mostly XP) in 2003, up from about 10 percent in 2002. Several retail-oriented manufacturers, includingTritonandTranax, have introduced machines that run on Windows CE.

Cost consideration

A major driver behind the adoption of Linux in the server and desktop markets is its cost. It can be downloaded off the Internet for free, although most users purchase it packaged with a service offering from companies like Red Hat.

But the cost of licensing an operating system is "only a tiny part of the total solution," said Aravinda Korala, chief executive of ATM and kiosk software developerKAL. Development of ATM applications on a Linux platform must be done largely from scratch, as most development to date has occurred in a Windows environment.

"Developers will have to write a lot of device drivers and stuff that is not already there. Linux is very different from a Windows environment, so little can be reused," Korala said.

In addition, Korala said, the cost of licensing Windows CE can be as little as $10 per device.

Andrew Medford, senior marketing manager for NCR's Financial Solution Group's Software Applications division, said that the Linux licensing agreement is very complex. Because Linux is "open source," it includes a clause guaranteeing that users will share any applications developed on Linux.

Thus, Medford said, "Any cost savings quickly get soaked up by all of the hoops you have to jump through. It's a management nightmare."

Multi-vendor vs. single OS

Keith Lewis,Diebold'ssoftware marketing manager, said that like most companies developing new ATM applications, Diebold relies on XFS (eXtensions for Financial Services) as its multi-vendor device interface layer. Originally developed by Microsoft, XFS was called WOSA (Windows Open System Architecture) XFS when it was first introduced in 1995.

While an alternative to XFS based on Java and compatible with Linux has since been developed, Lewis said, "Because of where (XFS) came from, it's a much better fit with Windows."

Unless multiple vendors developed systems that ran on Linux, Korala said, one of the key advantages of multi-vendor software, more freedom in choosing hardware, would vanish.

"A customer would have to beat up all of the vendors to try to get them to do Linux," Korala said. "If they didn't succeed and only one came out with a Linux system, they'd be locked into one vendor. That would put them right back where they started."

Perhaps the biggest factor working against Linux is the relatively small size of the ATM industry. In contrast to the PC and server businesses, the ATM industry is a small and very targeted market.

"With a market this small, vendors can't really justify supporting two operating systems," Korala said.

They like Linux

One ATM in the market today,Moneytree'sMT2000A, runs on a Linux operating system. Brad Fletcher, the company's president, said the primary reason he chose Linux was the lack of a licensing fee. He also believes it's more reliable than Windows, a factor he said is particularly important in convenience stores and other unforgiving retail environments where dirt, power outages and ATM vandalism are not uncommon.

Sylvia Berens, vice president of sales and marketing for kiosk software developerApunix Computer Services, touts Linux's reliability as well as its remote management capabilities. Two-hundred Linux-based kiosks with software designed by Apunix have been deployed in truck stops owned by Travel Centers of America, Berens said.

"We've gone over two years without a reboot," Berens said.

Because Linux is based on Unix, which was designed specifically for unattended devices such as servers, Berens said that there are more tools available within the operating system for remote monitoring as well as for making modifications.

"In a Microsoft environment, if your printer has a problem, a message will pop up on the kiosk," Berens said. "That doesn't happen with Linux. With Linux, in most cases, you're aware of issues before they ever become problems. And you have more tools at your disposal to deal with them proactively."

Hiroshi Shin Ohashi, a consultant for Japanese financial equipment manufacturerGlory Ltd.,said Glory is developing a version of its PZ Series ATM that will run on Linux. It already offers a model that runs on Windows CE.

Ohashi said Glory sees Linux as a product differentiator. "We want to offer people a choice, give them an alternative if they want it. If they don't like Linux, we can give them Windows CE."

In addition, Ohashi said, even a $10 per-machine licensing fee could make a difference in cash-strapped countries like India and China.

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Diebold Nixdorf

As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.

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