Business Week: How Many Service Companies Can the Linux Market Support?

“…several Linux companies are on the road to profitability —
and several dozen more could soon become public. Originally, each
tried to become the dominant player in a different sector of the
Linux market. But now, all seem to be aiming at the same revenue
source: services. ‘Everyone started out as a hardware company or a
software company or a support company, but now they all want to be
a services company,’ says George Weiss, a Gartner Group analyst who
follows the Linux market.”

“Linux companies figure that if it worked for IBM, it’ll work
for them. At the moment, Red Hat (RHAT), VA Linux (LNUX), and
LinuxCare (which just filed for an initial public offering) appear
to be the primary contenders for the Linux services crown. However,
it’s already clear that this prize will be difficult to
capture.”

“It’s easy to forget, when sizing up these companies, that
the biggest competitors in the Linux services business haven’t
flexed their muscles yet. It’s conceivable, once IBM and Sun
Microsystems (SUNW) wade in, that several Linux companies will have
to join forces to create a large enough beast to compete.”

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