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12/16/2004
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Linux To Ring Up $35B By 2008

For a theoretically free operating system, Linux is -- and will continue to be -- a cash cow. A research firm sees a bright financial future for the OS.

For a theoretically free operating system, Linux is -- and will continue to be -- a cash cow, a research firm said Wednesday as it predicted the OS will bring in more than $35 billion in revenues by 2008.

Framingham, Mass.-based IDC said that overall revenue for servers, desktops, and packaged software running on Linux will reach $35.7 billion in the next four years. Currently, IDC pegs Linux's global total take at just under $15 billion.

The numbers are higher than earlier estimates by most analysts, in part, said IDC, because it changed it methodology to account for not just Linux on new hardware, but also Linux that's redeployed on existing hardware, and even cases when the open-source OS is used as a guest operating system, such as in a server partitioned with virtualization software to run multiple OSes.

"This is the first authoritative and comprehensive snapshot of how people truly use Linux," claimed Stuart Cohen, the chief executive officer of the Open Source Development Labs (OSDL), a Beaverton, Ore.-based Linux advocacy group that funded IDC's analysis of data the research firm collected earlier. "It's not surprising to see that the adoption is far ahead of even some of the most optimistic estimates," Cohen added in a statement.

The OSDL was founded in 2000 by Computer Associates, Hewlett Packard, IBM, Intel, and NEC as a non-profit to push for the adoption of Linux. Linus Torvalds, the creator of the original Linux kernel, is part of the OSDL management team.

Software -- and not the free kind -- is the fastest-growing subsection of the Linux market, according to IDC's projections. While the overall growth rate of Linux revenues will likely be in the 26 percent per year range through 2008, packaged software sales will climb by more than 44 percent annually. Within four years, Linux software revenues will pop above $14 billion.

Not to say that software will hog all the glory. Although it will remain in the minority on the desktop, Linux will reside on some 17 million new and newly-redeployed PCs in 2008, account for $10 billion in revenues, and sport a global installed base of nearly 43 million machines.

Users in the Americas may be excused if they don't notice Linux as much as others, IDC said, since it predicted that the open-source OS will continue to play much better on the desktop in the Asia-Pacific and European markets than domestically.

By 2008, for instance, IDC estimated that Linux will carve out about 9 percent of the desktop market in those two regions, while the Americas will lag behind at under 4 percent. Worldwide, Linux will account for about 7 percent of all desktop OSes.

While those numbers are higher than today's -- the global average is about 3 percent in 2004 for Linux -- the proportions are similar to current breakdowns, which put users in Asia-Pacific and Europe as more than twice as likely to use Linux on the PC than Americans.

"When all manifestations of Linux operating systems are counted, Linux is clearly a mainstream solution," said Vernon Turner, a vice president of IDC's enterprise computing group.

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