The State of Enterprise Linux

For more than 20 years, Unix played the role of the 800 pound gorilla in the server space, especially in enterprise, scientific, government and academic environments. But traditional Unix vendors have faced increasing competition on two fronts. Microsoft Windows Server products have made significant inroads, particularly in the business back-end. To a lesser extent, but cutting closer to the bone, is competition from Linux.

While Microsoft servers represent a wholesale platform shift from Unix options, luring customers to Linux is less of a sea of change. Since it first began as a hobby project in 1991, Linux was inspired as a free alternative to proprietary Unix implementations. Although Linux is closely modeled after popular Unix systems in both form and function, its code is freely available and open source, without derivation from protected Unix code.

There is no single platform or product that singularly represents Linux. Because it is essentially an open source kernel surrounded by a set of open source tools, Linux has been packaged, customized and distributed by enthusiasts in a wide variety of shapes and sizes. Some distributions are optimized for end-user desktop use, some for lightweight servers, some for embedded applications, some for general purpose use, and so on.

While the motivation behind the original Linux development was driven without interest in the marketplace, its free nature has left open the possibility for vendors to build and sell their own Linux-based platforms. However, any doubts as to the credibility and viability of Linux, developed as it has been by volunteers during the past 15 years, vanished as blue-chip companies like IBM and Sun embraced Linux alongside their proprietary Unix platforms. Increasingly, both established and start-up companies are investing in Linux development. IBM alone is investing $1 billion of its $5 billion R&D budget in Linux.

Although revenue for Linux servers weighs in at less than one-third that of Unix servers--$5.3 billion vs. $17.5 billion--the two markets are trending in opposite directions. The Unix market has seen relatively steady year-to-year declines since its peak during the late '90s, while the Linux market is ascending. Research firm IDC projects that Linux-based servers will reach $11 billion by 2008, nearly halving the gap against Unix.

A key factor driving Linux growth, particularly in the enterprise, is hardware flexibility. The major Unix platforms that IBM, HP and Sun sell have traditionally been closely bound to these vendors' hardware solutions. Because Linux is adaptable to a variety of hardware, buyers can avoid long-term lock-in.

Enterprise Linux platforms are an evolving market segment, but the field remains largely lopsided. Red Hat and Novell/SUSE have long dominated the enterprise Linux space. Recent moves from Sun, Oracle, and even Microsoft are setting the stage for changes in this long-standing duopoly.