Telia will use an S/390 mainframe to serve websites for its hosting customers. IBM said the mainframe will be split into over 1,500 virtual servers, each serving individual Telia customers.

Doug Neilson, systems consultant at IBM, said: "This is a vindication of a strategy we've been pursuing for five years now. Sun just doesn't get the Linux message - we think we do, and deals like this prove it."

Analysts agreed the deal represents another step forward for Linux in the corporate environment. The implementation is thought to be the first Linux mainframe roll-out in Europe.

Telia's choice to use a single mainframe is thought to be preferable to running multiple of single servers, which tend to be under-used in such situations. This is because of difficulties sharing a server between many websites, leading to numerable under-used servers, and increased cost.

The implementation will use Apache webserver on a SuSE Linux operating system.

Malcolm Beattie, Unix expert at the UK Unix Users Group, said: "This is all about total cost of ownership. It's good to see that IBM's claims work out, if Telia have done the sums and putting the mainframe in really works out cheaper."

He agreed that the deal showed IBM had understood the attributes of Linux and warned that Sun was risking pricing itself out of the market against open source competition.

Other analysts were less convinced that one contract win for IBM has proved its Linux strategy. Gary Cooper, analyst at Butler Group, said: "IBM has faith in Linux as a real alternative to proprietary Unix and Windows - but it's still not clear whether that faith is justified."

Sun was unavailable for comment.

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