Linux at 25% of Server OS Market - Is Redmond Hearing Footsteps?

  • Written By: R. Krause
  • Published On: March 15 2000



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Event Summary

[Computerworld] 02/11/2000 Linux cornered 25% of the server operating system market last year, according to preliminary data from International Data Corp. (IDC). But in terms of revenue share, Linux remains a tiny fraction of the market. Microsoft Corp.'s Windows NT system held steady at 38% of the server operating system market last year, while Novell Inc. finished at 19%. Meanwhile, all of the combined versions of Unix garnered 15% of the market.

But IDC analyst Dan Kusnetzky warned against reading too much in these numbers. All server operating systems, especially NT, are continuing to experience very strong growth, but the unusual Linux growth numbers are obscuring that fact. Another trend is that Unix users, in particular, are buying fewer but more powerful servers, said Kusnetzky, thus generating healthy revenue in that space.

"We are trying to measure Linux with the same techniques we use for other products, but that's increasingly difficult," said Kusnetzky. For example, users can buy a single copy of Linux and install it multiple times. Still, because of the low cost of installing Linux systems, some users often buy several different Linux distributions to try out but end up using only one. In addition, Linux users sometimes buy the server product but use it as a workstation.

Nevertheless, the total revenue stream for Linux-based systems remains tiny compared with other server operating systems. IDC estimates worldwide Linux revenue, covering all clients and servers combined, at a mere $63 million for 1999.

Looking forward, IDC still expects that Windows 2000, not Linux, will be the dominant server operating system by 2003. On the desktop, the Windows 9x line and Windows NT/2000 are expected to seize a combined 88% of the market in 2003, roughly the same as today. Kusnetzky said he does expect Linux to score well with non-PC devices such as network appliances and wireless systems.

Market Impact

Despite Microsoft's efforts to marginalize Linux, the server market appears to be willing to embrace Linux for the time being. As described in the Event Summary, it is difficult to get apples-to-apples figures for the "true" sales volumes. Assuming constant counting methodology, the steady growth of Linux (three years now) is a good trend indicator, and Microsoft will likely respond with greater force than it has in the past.

As we have discussed previously, having server market share is good for Linux, but a credible desktop presence is required before Linux can have a hope of competing seriously with Windows.

As Linux keeps racking up these numbers, more fence-sitters will actually try Linux. Once this happens, the Linux market should grow even further. To further this process, there may need to be a Linux consolidation. Although Red Hat currently dominates the Linux market with a 65% market share, there are enough other distributors to make it confusing to the general market. Reduction of this confusion is the other key barrier to more widespread acceptance.

User Recommendations

This announcement should provide more reassurance for those customers who think they are fighting City Hall by selecting (or at least trying) Linux. Although Linux will almost certainly not duplicate the market shift that occurred when CDs overtook vinyl LPs, its credibility as an alternative OS is increasing.

Users, both current and potential, should try to exert pressure on the key vendors to overcome the "58 varieties" syndrome, as well as improving the user-friendliness. Although a number of Linux distributors have been working on improving the ergonomics, this practice must proliferate further. One possible consequence: Linux has long been the domain of the propeller heads, we can foresee a backlash when the mystical power of Linux is taken from the shaman and given to the masses.

On a more practical/cynical note: any event (or series of events) which forces Microsoft to become more customer-friendly is not a bad thing. Although we do not expect Microsoft to open their source, nor to give away Windows, they may realize that "Halloween" and "Linux myths" memos are not working, and they may try a "kinder, gentler" tack.



 
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