One in three servers at Morgan Stanley's institutional securities division is now running on Linux as part a major project to reduce IT costs, the investment bank has revealed.

Speaking at the LinuxWorld Expo in New York, the company said that the goal of the project, underway since mid-2001, is to reduce the cost of computing by adding flexibility to its computing architecture.

Morgan Stanley's institutional securities division has opted for new architecture that moves the company's data, applications and operating systems off specific machines and onto network servers throughout its global computing infrastructure.

This infrastructure is made up of around 6,000 servers, 25,000 desktop computers and thousands of applications. The aim is also to increase flexibility.

"We want to be able to run any application on any box at any time," said Jeffrey Birnbaum, managing director and global head of enterprise computing at Morgan Stanley's institutional securities division. "Now, around 35 per cent of our servers are running Linux."

By 2005, two years ahead of schedule, the division plans to be running 80 per cent of its systems on commodity hardware.

By running everything off the network it is easier to add additional power. "Whe you run everything including the operating systems off the network adding computing power is simple," explained Birnbaum.

Morgan Stanley also wanted to get away from local software installations and needed to bring a high degree of automation to systems upgrades and support.

Requiring an operating system that can run on a range of machines, the bank turned to Linux vendor Red Hat.

The release of version 2.4 of the Linux kernel was key to Morgan Stanley's plans. "The 2.4 kernel was the first Linux promising enterprise class stability," said Michael Tiemann, chief technical officer at Red Hat.

But Tiemann admitted that there was significant work to do to ensure that Morgan Stanley could use the kernel.

It developed new Linux tools and libraries, including new file system support, compilers, crash dump analysis tools, scheduling and threading capabilities.

It also had to work with application vendors to ensure that their software was delivered to the same platform.

"It's an expansion of the Linux ecosystem. The GNU and Linux projects have both benefited from all the work as it has been submitted, reviewed and accepted into the open source community," said Tiemann.

Open source software is increasingly finding a place in the business world.

Get the latest news, views and technology updates in a weekly round up of the Penguin's unstoppable march by signing up to vnunet.com's FREE Linux newsletter here.