Linux, Windows both show strong growth

It's been a tough 12 months for Microsoft Corp., including this week's appeal of an antitrust ruling to break the company in two and the tanking of its stock price, but the software giant appears to be proving it can take a solid punch or two and keep on fighting.

And it appears that CEO Steve Ballmer was right earlier this year, when he said Linux is a threat to Microsoft.

Two studies released Wednesday by International Data Corp. show that Microsoft continues to dominate the client operating system market and to build dominance in the server operating system market.

But the studies also show that Linux, while not matching Microsoft's market share, is growing faster than the Windows operating system. According to IDC, Windows accounted for 41 percent of server operating system shipments in 2000 and an overwhelming 92 percent of shipments on the client side.

"We have to acknowledge that Microsoft's strategies and tactics seem to be working," says Dan Kusnetzky, vice president of operating environments research for IDC.

On the server side, IDC's "Server Operating Environments: 2000 Year in Review" showed Microsoft's server shipments jumped 20 percent in 2000, from 2.1 million to 2.5 million. The year was marked by the February release of Windows 2000 Server and Advanced Server, and the September release of the DataCenter version. Microsoft's 20 percent growth is significantly higher than the overall server market growth of approximately 13 percent, but less than the 24 percent growth shown by Linux.

"Critics and nonbelievers can no longer dismiss the Linux market as a fad," says Al Gillen, research manager for IDC's operating environments program.

The study also had its losers. Novell Inc. NetWare shipments showed a 3 percent decline, from 1.06 million in 1999 to 1.03 million in 2000. The drop was accompanied by a sharp decline in revenue, which indicates the company is generating less revenue per server. "The drop in the average shipping value per server doesn't bode well for the long term," Gillen says.

On the Unix front, the study showed a flat market, but those numbers were skewed by the contrast of Sun's tremendous growth and the collapse of The Santa Cruz Operation Inc. Sun Microsystems Inc. posted a 40 percent growth in shipments, although its total shipment numbers were far less than Microsoft's.

On the client side, IDC's "Client Operating Environments: 2000 Year in Review" revealed continued Microsoft dominance in an area marked by slowing growth. Windows 98 and 98 SE shipments were up 36 percent over the previous year, but overall Microsoft's Windows 9x and Me shipments were only up by 8 percent. Microsoft increased its client market share by almost 3 percent.

Linux is still far behind on the client side with only a 2 percent share, but growth was up 25 percent in 2000, powered by workstations available from IBM Corp., Hewlett-Packard Co. and Dell Computer Corp.

In the IDC report, Kusnetzky concluded that the trend on the client side is consolidation around 32-bit operating systems and applications. That consolidation, Kusnetzky says, also means a general movement to Windows platforms.

The full reports are available for US$1,500 each at: www.idc.com/software/press/PR/SW022801pr.stm

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