Paradigm shifter Linux gets reality check

By ROB O'NEILL*

Despite recent success courtesy of the US Department of Justice, it has been a bad decade for Microsoft haters. Windows and then its allied applications have cut a swathe through the software market to the point where Bill Gates' behemoth faces virtually no credible competitive threat.

Apple, Novell, all flavours of Unix, mainframe and mid-range systems have all felt the heat. All flavours of Unix except Linux, that is.

This Unix variant, based on a kernel developed by geek heart-throb Linus Torvalds, has been perceived as a possible paradigm shifter - a technology and development process that could potentially alter the market landscape and perform an end-run around Microsoft.

This fact was acknowledged in the infamous "Hallowe'en documents," an internal Microsoft study leaked in the early stages of the US Department of Justice inquiry. Microsoft considered Linux a direct short-term threat and its open-source development process a long-term threat to the company's position.

The announcement last week that IBM would invest $US200 million to establish European Linux development centres and encourage software vendors to port their applications to Linux is just the latest in a series of initiatives that appear to confirm Microsoft's assessment.

Linux's "threat" deserves some further examination.

According to IT market researcher IDC, Linux can expect 26 per cent compound annual growth for the next three years compared with 12 per cent for Windows 2000. Dataquest predicts annual revenues to grow at a massive annual compound rate of 37 per cent.

But while not denying Linux's growth, recent studies of usage and intended usage of Linux in the Asia-Pacific region at least put the buzz into some sort of perspective.

Across the region Linux is the only operating system apart from Windows that is growing in the corporate market. But its growth is coming off a tiny existing base of users and even three years from now Linux will remain a minnow. Even in China, where it has received Government backing, adoption at the business level will only just see Linux break 5 per cent market share in three years.

In New Zealand, corporate and Government IT directors expect the percentage of connected users working off Linux systems to rise from 1.1 per cent now to 4.4 per cent three years out. Linux may be the operating system du jour in universities but it still has a long way to go to gain mainstream business success.

* Rob O'Neill is a research analyst with management researcher Strategic Research. His e-mail is robo@strategicpublishing.com