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9/4/2007
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Linux Adoption To Slow, Say CIOs

Windows boxes continue to dominate the overall deployed base of servers used by the CIOs polled in the UBS survey.

Citing the results of its "CIO Pulse" quarterly survey, investment firm UBS said Tuesday that the rapid rate of adoption of the Linux operating system by businesses is likely to slow in the next year.

More than 90% of the responding CIOs in the survey who are not current Linux users said they would not deploy the open-source operating system in their servers in this calendar year. That number is up from the 87% of those polled who answered in the same way in January of this year and significantly higher than the 60% of similar replies seen in 2006.

"We believe it should be expected that Linux operating system growth will slow from the significant growth rates of the past few years," the study, which was headed by UBS analyst Heather Bellini, concluded.

Those growth rates have reached the high double digits in the recent past, as more business IT departments have moved from proprietary systems such as Unix and Windows to open-source platforms, primarily Linux. The penetration level of Linux among existing customers -- i.e., the portion of businesses' overall server resources represented by Linux -- remains low at around 8%, according to the CIOs surveyed, leading the UBS analysts to assert that "we still see room for a considerable uptick in penetration levels."

One key question for the open-source OS market is what the effects of server virtualization will be. In March leading Linux provider Red Hat launched its Red Hat Enterprise Linux version 5, which offers virtualization to open-source customers.

The UBS research is based on interviews with more than 60 CIOs in a range of businesses including financial services, energy and utilities, technology, and health care.

Windows boxes continue to dominate the overall deployed base of servers used by the CIOs polled in the survey, with an 80% market share, up from 62% in January. The market share of Unix machines dropped from 28% to 13% in the same period, largely as a result of companies moving from Unix to Linux.

Among the other findings of the survey: interest in hosted CRM applications has increased from 33% to 62%; most respondents expect to roll out Windows Vista in the second half of 2008; and nearly 70% of CIOs expect IT spending to increase in 2007, regardless of macro-economic trends and events.

This month Red Hat will launch its Global Desktop Linux OS, which aims to provide a low-cost alternative to Vista. The share price of Red Hat, which has dropped 22% in the last three months, gained 1.85% today.

Rival Linux provider Novell reported that sales of its open-source operating system for the most recent quarter were up 77% over the same period last year.

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