According to a new International Data Corporation (IDC) report on server OS market share and forecasting, upstart open-source OS Linux has overtaken Novell Netware for the number two position behind Windows NT and Windows 2000. But the outlook for Linux isn't as rosy as it sounds: The OS will continue to garner no appreciable revenues, with only $67 million in 1999 and an expected $85 million by 2004. The problem, of course, is that Linux often runs on individuals' and small companies' low-cost machines. And because users can get Linux free over the Internet, most don't pay for the OS. Even Red Hat Software makes more than two-thirds of its revenues from support and services, the company admits. (Red Hat Software had revenues of $42 million in fiscal 2000.)
"From a revenue perspective, Linux is nothing more than a speck of sand on an ocean beach," said Dan Kusnetzky, vice president of IDC System Software. "Although Linux has been much hyped, our research indicates the total market for Linux OS software in 1999 was . . . about the same revenue that Microsoft's OS business generated by noon on the third working day of January 1999."
In 1999, 1.3 million Linux servers were in use, and IDC expects that figure to reach 4.7 million by 2004, a growth rate that would outpace the expected 23 percent growth for the rest of the server market. But Linux revenues will grow only 1 percent during the same period, a barely perceptible change. IDC says that Windows desktop market share was 87 percent in 1999; that figure is expected to drop just 2 percent by 2004. And most of that loss will be to new desktop devices, not to other PC OSs