“It’s a strange paradox. Shipments of the Linux operating system
have already surpassed Novell’s venerable NetWare. And at a
projected growth rate of 17%, Linux will outpace all other server
operating systems through 2004. But revenue growth will be barely
noticeable at only 1%, compounded annually.”
“That being the case, Linux pure plays like Red Hat (nasdaq:
RHAT), Caldera Systems (nasdaq: CALD) and Turbo Linux are shifting
the revenue focus away from licenses of the operating system (OS)
to peripheral markets like higher-margin development tools,
applications, services and support.“
“In the case of Turbo Linux, it sells a standard Linux OS for
about $200 but charges ten times that amount for a beefed up
version, which includes specialized clustering technology. Caldera
charges tens of thousands for e-commerce applications that run on
its Linux OS.”