Where is Linux headed? 22 August, 2008 By Paul Weinberg

"Linux seems to have hit a plateau. It's growing, but it's not growing at super, super-fast rates. Not fast enough to be overtaking Microsoft anytime soon," observed Warren Shiau, senior associate and lead analyst in IT research at the Strategic Counsel.

He suggested that earlier predictions of Windows' demise at the hands of Linux have proven to be premature.

"There's no question that Linux has its markets. What I'd watch for & is whether Linux shows signs of developing into an OS that has certain markets and is really strong in them -- but that is also limited to those markets; or if it shows signs of becoming an all-out competitive force/day-of-reckoning sort of deal for Microsoft," he said.

Rob Enderle, principal analyst at the Enderle Group, echoed the sentiment, stating that Linux has been publicly hurt by infighting by advocates at a time when Microsoft has stepped back from openly attacking the open source OS.

"In short, the engine behind the Windows [server operating system] has become more focused, the product has improved sharply and the engine behind Linux has significantly weakened, highlighting the concerns surrounding the platform that did not previously exist," he added.

Jean Bozman, Research Vice President, Enterprise Servers, at IDC thinks it would be a mistake to conclude Linux is weakening. She stated that a rise in virtualization as a consolidated server strategy in the enterprise has resulted in fewer purchases of Linux-based servers in some quarters, but its revenues were unaffected.

As a younger operating system, continued Bozman, "Linux in the enterprise tends to do certain things more of the time like high-performance computing and Web computing." "If you are looking at Windows you are looking at a wider range of server configurations for the most part," she continued.

IDC's Worldwide Quarterly Server Tracker for Q1 2008 reported that Linux servers posted another quarter of solid growth, with year-over-year revenue growth of 8.4% for a total of $1.8 billion in the quarter, second only to the $2.0 billion in Linux server revenue seen in 4Q07. Linux-based servers now represent 13.7% of all server revenue, up from a total of 13.4% in the last quarter.

Still, Shiau noted that Windows-based servers represent a growing portion of the enterprise market.

Windows server revenue overall was $5.1 billion in 1Q08, showing 4.2% year-over-year growth and gaining 0.2 points of revenue market share over 1Q07. Windows-based servers comprised 39.2% of all server revenue in 1Q08.

Shiau stated that he is hearing that fewer corporate IT departments are transitioning from UNIX to Linux despite the similar skill sets. This is because their IT infrastructures are already using Windows whether it is on the desktop, the mobile or the departmental server. The tendency to stick with a familiar OS then becomes irresistible, he noted.

"I guess in the larger picture for a lot of enterprises it makes a lot of sense not to continue to have two different skill sets, that is UNIX/Linux and a Windows skill set."

Bozman emphasized that both systems have their respective markets and are increasingly appearing on the same remaining physical servers in virtualized IT environments.

She stated that Windows and Linux-based servers have had consistent double-digit growth "because they fit so well in the scale-out world of [x86] servers while UNIX is either flat or growing in some quarters."

UNIX is showing a slight decline, but it also obviously isn't going away any time soon. UNIX servers experienced a modest -0.8% revenue decline when compared with 1Q07. With particular strength in the volume and high-end enterprise segment of the UNIX market, worldwide UNIX revenues were $4.0 billion for the quarter, representing 30.6% of quarterly server spending.