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IDC: Linux Ecosystem Worth $40 Billion by 2010

NEW YORK -- Sizing the Linux market ecosystem is no easy task. Downloads of Linux operating systems and applications are not an accurate measure. Analyst firm IDC, however, has a handle on the market and its size, and it's large.

At the Linuxworld Open Solutions Summit, which kicked off today in New York, IDC analysts detailed where they see the Linux ecosystem today and where it is headed by 2010.

For 2006, Al Gillen, research vice president of system software at IDC, told an early morning audience that the research firm has pegged the Linux ecosystem that includes servers and software to be worth $18 billion. By 2010, Gillen said, the market will be worth $40 billion.

In terms of Linux operating system deployments, a surprising finding that Gillen described is that there are almost an equal number of paid Linux server deployments, which include Red Hat Enterprise Linux and SUSE Linux Enterprise Server, as there are unpaid "free" Linux deployments such as Debian and Fedora.

A lot of growth in Linux deployments is coming through increasing workloads moving to databases among other enterprise applications. Tim Grieser, IDC's program vice president of enterprise system management software, explained that Oracle's recent move to formally support Linux directly is proof positive of how important Linux is for the database market.

Grieser argued that Oracle's Linux move would help to further mainstream Linux and help improve overall Linux adoption. Linux's gains, however, are not necessarily Microsoft Windows loses either. Gillen stated that it is the Unix market, rather than Windows, which is directly impacted.

"We don't see a lot of incidence of Windows servers being displaced by Linux, we just don't see that," Gillen said emphatically.

That said, there is an effect and a potential impact on Windows servers.

In response to a question from the audience, Gillen admitted that, "Anytime Linux is an opportunity, it is something that could've gone to Microsoft so there could be some capping of Windows growth because of Linux."

The real growth potential of those in the Linux system does not actually come from Linux itself, according to IDC. Matt Healey, senior research analyst of hardware and software support services, argued that the opportunity for the Linux ecosystem lies in mixed, heterogeneous environments.

Healey explained that the services revenue from the Linux ecosystem is derived from deployment, integration and consulting expenditures. According to IDC's data, most Linux services revenues are coming as part of integrating Linux into overall infrastructure and not as a Linux pure play.

"I don't think going forward there will be many service opportunities for providers that want to just do Linux," Healey said. "It's a tool in the toolbox but it can't be the only one there."

In terms of Linux services revenues, the largest opportunity identified by Healey is implementation services, followed by training.

"Support is not the largest opportunity," Healey said. "Support services are valuable, but they aren't adopted as heavily as we'd expected. It seems as though once customers have gone through their consulting, they want knowledge transfer so they can run things themselves."

Though desktop Linux is on a rapid growth curve, the opportunity still lies on the server side for Linux. Gillen argued that the numbers aren't there yet for the Linux desktop.

"Linux on desktop a tough road. It's really about installed base momentum," Gillen said. "It is growing and we're expecting Linux on the desktop to gain through 2010 but it's going at a 30 to 40 percent compound growth rate.

"But it's starting at a very small number so overall penetration is still quite low."