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Linux Operating Systems Market grows in 2008

A recent IDC study reveals that worldwide revenue from Linux operating system software grew by 23.4% from 2007 to 2008, and that growth will be followed by a 2008-2013 compound annual growth rate (CAGR) of 16.9%. With this growth, worldwide Linux operating systems revenue will cross $1 billion for the first time in 2012, growing to $1.2 billion by 2013.

By comparison, Linux server operating system subscriptions will exhibit a different profile, with a contraction of net new subscriptions expected in 2009, followed by a steady recovery through 2013. Meanwhile, nonpaid Linux server operating system deployments are predicted to grow more quickly than new subscriptions through 2013, leading to a net increase of nonpaid Linux server operating systems deployed compared to total worldwide Linux server operating systems being placed into service.

The combined total of Linux server operating system subscriptions and nonpaid deployments is expected to show a 2008-2013 CAGR of 1.1% — a low growth rate that is impacted significantly by the anticipated contraction in 2009. IDC notes that this low growth rate of new deployment can be misleading, since growth of virtualized deployments will also be taking place aboard existing servers, a metric not directly considered in the predicted growth of net new subscriptions and deployments.

"The dynamics we are seeing here are fascinating. The convergence of the difficult economic conditions, the maturing of enterprise virtualization software, and the increasing use of replica copy deployments of Linux server operating systems is leading to a shift where the success of the market is increasingly defined by the installed base rather than by the number of brand new subscriptions or deployments being made,” said Al Gillen, program vice president, System Software at IDC. “This phenomenon is not unique to Linux – as we see the same trend playing out with Windows server operating environments.”

Gillen adds, “We find that more customers are seeing nonpaid Linux as a viable solution for certain non-critical business needs, despite the lack of commercial applications and the potential support challenges that come with a non-commercially-supported distribution.”

Additional key findings include:

* The top revenue-producing vendors are Red Hat and Novell, which together account for 94.5% of worldwide Linux operating systems revenue in 2008.

* In terms of new subscriptions of server operating environments, Red Hat and Novell accounted for 90% of worldwide Linux subscriptions in 2008.

* Nonpaid Linux server operating systems continues to increase in importance on the overall market dynamics, with nonpaid Linux server operating system deployments accounting for 43.3% of the worldwide total, up from 41.4% in 2007.

Market expected to show a compound annual growth rate of 16.9% between 2008-2013

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