IDC Report Sees Current Decline, Long-Term Growth for Linux
Aug 05, 2002, 19:15 (21 Talkback[s])
(Other stories by Brian Proffitt)
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Despite steady revenue growth since 1999, Linux operating
environment revenue declined by almost 5 percent in 2001, according
to a report released by IDC analysts late last week.
This marks the first year of contraction for Linux on a
The news is not all bad, however. The same report projects
spending on Linux operating environments will increase over the
next five years from $80 million in 2001 to $280 million in 2006,
which means a compound annual growth rate of 28 percent.
The reason for the slight slowdown Linux growth is found, the
report stated, in the flat growth of new license shipments for
server operating environments (SOE), which makes up an overwhelming
percentage of the $80 million spent in 2001 on Linux software.
Still, on the bright side, client unit shipment grew by nearly
50 percent with the Asia/Pacific region contributing generously (34
percent) to 2001 sales. The report, "Worldwide Linux Operating
Environments Forecast and Analysis, 2002-2006: A Market in
Transition," was put together by IDC analysts Al Gillen and Dan
"The previously strong growth of Linux SOE shipments was
interrupted during 2001," said Gillen, research director for system
software at IDC. "We also saw China's Red Flag and Brazil's
Conectiva make strong contributions to the Linux COE market, which
continued to grow at a healthy pace."
Despite the unconventional ways Linux can be bought and sold,
the report from IDC said it has become a mainstream choice for many
infrastructure workloads particularly because the software is
available either freely on the network or as a low-cost packaged
product that can be deployed on low-cost, high-volume systems.
Furthermore, since Linux is often packaged with other open
source software such as Samba for file/print services, Apache for
Web services, and MySQL or PostgreSQL for data management, this
makes it a highly functional and cost-effective environment for
corporate systems, the report stated.
No operating system fared very well in the IDC study. All
operating systems saw revenue loss, with the exception of Microsoft
Gillen indicated that the two big reasons he expects the growth
in the Linux revenue stream are "Linux vendors will increase the
amount of revenue captured and will also increase the amount of
Gillen also pointed out that while Linux will continue to grow,
its revenue stream is still very small compared to that of other
operating systems. He cited that the current $80 million revenue
stream would be generated by Microsoft in just two days of business
for that company.
The report also went into some detail about the growing success
of the Red Hat Linux distribution, citing the North Carolina
company as being the major player in all of this future growth.
Mark de Visser, VP of Marketing at Red Hat, was quick to point
out that while the 28 percent growth number was very respectable in
today's current market environment, he would "be very disappointed
if that number stayed the same."
While he recognized that compared to other operating systems,
Linux revenue numbers were small, de Visser firmly believes that
Linux, and Red hat along with it, is poised for a huge rate of
growth--much larger than the IDC projection.
Red Hat, he explained, has stayed focused on one market--the
server customers--and has maintained a fairly conservative fiscal
policy along the way. By holding on to its resources, Red Hat has
weathered much of the IT storm that has battered the likes of VA
Linux, Corel Linux, and just recently Turbolinux.
de Visser also explained how his company has continually worked
with software vendors to get enterprise-level software apps ported
to Linux, steadily eliminating potential clients' objections to
moving over to Linux.
Given this crumbling of the walls surrounding Linux migration
opportunities, de Visser said, "We think there's an enormous
potenial for breakout."
de Visser also hinted at some near-term shifts in Red Hat's
customer strategy, alluding to the upcoming release of Red Hat
Linux 8.0, which is currently known as Limbo in its beta form. This
new product, de Visser indicated, would try to provide "a much
stronger end-user experience."
Red Hat believes that paying more attention to the desktop is a
better business decision, de Visser said.