BOSTON (07/25/2000) - Despite a 17 percent increase in server operating system environment shipments worldwide, revenue in that market will increase by just over 1 percent by 2004, according to a new study from International Data Corp.
Lower-priced products -- notably the open-source Linux operating system environment -- are generally attributed by the market researcher for the discrepancy.
Even though it recently slipped past Novell Inc.'s NetWare into the number two market position in terms of new license shipments, Linux operating system software brought in just $67 million last year, which is insignificant compared to Microsoft Corp.'s revenue, noted Dan Kusnetzky, IDC vice president of system software, in a written statement outlining the study.
"It's a disruptive technology," he said in an interview, referring to the open-access aspect of Linux whose source code is available free on the Internet. "The cost of the (Linux) shipments going out the door are at a very, very low price compared to competitors. ...It is drastically less expensive, but it can't do some of the things other operating systems offer. But if [people's] needs fit within those boundaries, people will buy it."
Companies like Red Hat Software Inc. can get Linux for free on the Internet, add services to the operating system and sell it for a profit, Kusnetzky said.
Copies of the Linux software obtained freely off of the Internet were not included in the IDC study, making the prescribed rate of growth very conservative, he said.
Linux shipment growth is expected to increase more than any other server operating environment, according to IDC, which is a division of International Data Group Inc., the parent company of IDG News Service.
IDC forecasts the compound annual growth rate on Linux shipments will be more than 28 percent, from 1.3 million last year to 4.7 million in 2004. Likewise, Linux revenue will grow the fastest in the market, rising more than 23 percent.
Even so, revenues will be just over $85 million by 2004 and total Linux server shipments will be second to Microsoft's Windows line.
Microsoft Windows NT accounted for 38 percent of the 5.5 million licensed shipments of operating system environments in 1999. Linux had 24 percent of the market, NetWare accounted for 19 percent and Unix brought in another 15 percent.
IDC, in Framingham, Massachusetts, can be reached at +1-508-872-8200 or http://www.idc.com/.