IBM was like a proud parent last week as it showcased a report – in a conference call with the media -- that said Linux is moving from fringe applications to the core enterprise applications stack.
The report, penned by San Francisco-based Peerstone Research Inc., stated that over the next five years companies running enterprise resource planning (ERP) applications will migrate away from Microsoft Windows Server and Unix to systems based on Linux. The migration will be to the tune of an estimated 12% to 15% decline in Windows Server growth in 2004 and 2% to 5% in 2005.
The report also stated that Linux is making "undeniable inroads" into the core enterprise applications stack, of which the biggest component is the worldwide installed base of 800,000 servers running SAP, Oracle and PeopleSoft applications.
Win the battle, not the war
Peerstone research director and CEO Jeff Gould said the report, which examined 400 companies running SAP, Oracle or Peoplesoft, showed roughly two-thirds were using Unix, 28% Windows Server or a version of NT, and only 2% were running on Linux.
"But this figure is so small, as it reflects the fact that ERP vendors have only moved their applications to Linux over the past 18 months," Gould explained.
Gould backed up his report's claim that Linux was having an impact on the ERP space, pointing to data that showed the Unix share would drop dramatically to 50% and the Windows Server share would "stagnate" at 28%.
"Our first conclusion from this is that Linux is not going to take over the world … they are still a considerable distance behind Windows, but their growth rate is much higher," Gould said.
The higher growth rate for Linux will result in an estimated 15% share by 2007, he said.
Gould said most of the migration to Linux will arrive from former Unix users, reflecting a slow but steady historical trend of ERP users going from Unix to Linux. In the Peerstone survey, one in five Unix users said they expected to abandon that system for Windows Server, and the remaining four out of five said the migration would lead to Linux.
Adam Jollans, chief technologist for IBM's software group, echoed the Peerstone conclusion that Linux had moved from edge network usage to critical business applications. Within IBM, Jollans said software revenue on Linux had quadrupled from 2002 to 2003.
"We expect the trend to continue with the availability of the 2.6 kernel in commercial Linux distributions," he said.
Microsoft inaction: Denial or strategy?
Gould explained that the report was not sponsored by any outside vendors, and generally speaking, Peerstone does not recommend for or against Windows, Linux or Unix, as each already has a very satisfied customer base.
However, Gould said the industry is seeing "an end to Microsoft server growth" that for the time being placed Windows Server with little more than a quarter of the market share. That number would not decline in the foreseeable future, as Windows Server will shift from a growth to a mature "legacy" product.
For its part, Redmond has continued its aggressive tactics against Linux, and the report will do little to change that approach, said Gordon Haff, senior analyst at Nashua, N.H.-based Illuminata Inc.
"Linux quite clearly is on their radar screens … but the fighting will remain in the trenches with no dramatic strategy shift," Haff said.
Materials on both the Microsoft and Sun Web sites acknowledge the growth of Linux in the enterprise, but portray it as confined mostly to edge server or single-purpose roles like server farms.
"Are Microsoft executives in denial about the progression of Linux in the core enterprise stack?" Gould asked, noting that the noise from Redmond showed Microsoft was acutely aware of the Linux threat, but it is still operating on the assumption that "basic blocking and tackling will carry the day."
Since such an approach unseated Novell Netware in the 1990s in the LAN server market -- Microsoft won out with NT-- the software giant may be repeating that strategy to win out against Linux.
Redmond has also continued to aggressively pitch Unix and Novell users with its Services for Unix and Netware migration promotions, respectively, as part of an action to snatch up users before they consider migrating to Linux.