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4/9/2009
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Linux Expected To Thrive As Economy Recovers

Virtualization, cloud computing, and adoption by startups will make Linux the fastest-growing operating system, post economic downturn, report says.

Linux advocates, such as Red Hat CEO Jim Whitehurst, are fond of saying the open source operating system will thrive in a downturn. IDC analyst Al Gillen went a step further Wednesday, saying Linux revenue growth will seem less than spectacular during the downturn because much of its increased use will take place as free guests running on virtualized servers.

But as the economy recovers, the business uses seeded by that growth will make Linux revenue the fastest-growing operating system segment in the marketplace.

"The economic disruptions impacting the market today are affecting all market segments, including the Linux ecosystem. Linux has experienced a reduction in growth of software spending," Gillen said in a talk before 400 attendees at the Linux Foundation Collaboration Summit in San Francisco on Wednesday. When combined with a falloff in revenue from servers to run Linux, the Linux "ecosystem" growth will amount to 9% in 2009, or less than IDC had projected.

Companies simply aren't investing in new initiatives. In the recession, they will "fall back on existing skills" to get them through a downturn, and part of those existing skills include more use of free Linux, he said.

Nevertheless, Linux will emerge as the fastest-growing operating system, post downturn, because of the underlying trends in the market. By 2013, IDC expects revenue from Linux software, servers, and services to equal about half those of the lucrative Unix market, or $35.5 billion versus $74 billion.

Linux will have grown to $35.5 billion from a base of $12.3 billion in 2008, with a compound annual growth rate of 23.6%. Unix will have grown to $74 billion from a base of $69 billion in 2008, with a compound annual growth rate of 1.8%.

Windows, on the other hand, will show the greatest revenue gain, thanks to its massive user base, even with a smaller compound growth rate of 6.6% than Linux. From revenue of $149 billion in 2008, it will grow to $206 billion in 2013, Gillen predicted.

But the trend toward virtualization and cloud computing both favor Linux in the long run, he said. Additional Linux servers are being commissioned under the Xen open source hypervisor or under VMware and Citrix System hypervisors to avoid expenditures on more hardware. Former single-application Linux servers are now hosting two to five virtual machines, Gillen said. "We believe cloud computing is a natural extension of the virtualization experience," especially for startups and small and medium-sized business. "Linux has great traction among cloud providers due to its low cost and customizability," he added.

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