Linux Starts to Eat Microsoft’s Lunch in Servers

For years, the Linux penguin has grown fat on the carcass of yesterday’s Unix market, with Red Hat, in particular, delivering robust earnings growth at the expense of Sun’s Solaris business. According to a new report released on Tuesday, however, Tux the Penguin is adding Windows to its diet. Lots of Windows.

At least, that’s the message conveyed by the report by the Linux Foundation, in partnership with Yeoman Technology Group (please see my disclosure below). The two surveyed 387 IT professionals, with some surprising findings:

• About 79 percent of companies are adding more Linux instead of other operating systems in the next five years, compared to a mere 21.3 percent which expect to add more Windows servers over the same period.
• In the shorter term, things aren’t much better for Microsoft. Only 41.2 percent of respondents plan to add more Windows servers in the next year, and 43.6 percent expect to decrease or maintain their number of Windows servers over the next year.
• More respondents reported that their Linux deployments are migrations from Windows than any other source, including Unix migrations.
• Two-thirds of users surveyed say that their Linux deployments are brand new deployments.
• Almost as many (60.2 percent) respondents say they will use Linux for more mission-critical workloads over the next 12 months.
• Drivers for Linux adoption extend beyond cost; technical superiority is the primary driver, followed by cost and then security.
• At 86.5 percent, a vast majority of respondents report that Linux is improving, and 58.4 percent say their CIOs see Linux as more strategic to the organization as compared to three years ago.
• Among the early adopters who are operating in cloud environments, 70.3 percent use Linux as their primary platform, while only 18.3 percent use Windows. Interestingly, only 26 percent plan on moving applications/services to the cloud over the next year.

It’s not surprising that Linux would cut into Unix market share. Both are based on the same technology, requiring a similar skillset, while Linux costs considerably less due to its community development model. When you have IBM, Intel, Oracle, and others contributing free labor to develop Linux, vendors can sell it for little to nothing.

But cost can’t adequately explain this apparent shift from Windows to Linux. After all, in some scenarios, Linux may actually be more expensive than Windows, as Savio Rodrigues highlights when comparing Red Hat Enterprise Linux pricing to Windows Server pricing on Amazon’s EC2. Not surprisingly, Microsoft has its own pitch on why enterprises should choose Windows over Linux, arguing that cost considerations favor Windows, not Linux.

The problem for Microsoft is it’s no longer a matter of cost. As the survey results demonstrate, 67.5 percent of survey respondents cite “technical superiority” as the reason they choose Linux. Microsoft may still have the edge in terms of lowering the bar to development and deployment through development tools and the like, but Linux appears to have replaced Unix as the operating system enterprises trust with their mission-critical workloads.

Granted, the Linux Foundation is hardly an unbiased observer: A segment of the survey respondents include members of the Linux Foundation’s End User Council. But it’s hard to impugn the credibility of even that part of the survey’s demographic, given that it includes companies like Morgan Stanley, Goldman Sachs, Bank of America, Bristol-­Myers Squibb, NTT, Dreamworks, ADP, McKinsey and Co., the U.S. Department of Defense, Goodrich, and other companies that have big investments in both Linux and Windows.

That said, it’s interesting that the original survey included 1,948 respondents, but the Linux Foundation only reports on the largest 387 respondents. Perhaps a different story of adoption emerges from the smaller 1,561 respondents? It’s very possible that Linux has not had as impressive traction against easy-to-use Windows in smaller enterprises as it has in the more self-sufficient larger enterprises. Microsoft’s own research (PDF) indicates that Windows significantly outpaces Linux in SMB adoption.

At any rate, Microsoft has spent years trying to dampen Linux’s momentum through patent-suit sabre rattling. This tactic has failed. Microsoft needs a new strategy, one that includes more R&D and fewer lawyers.