Today's data centers are moving toward only two important non-mainframe server operating systems -- Red Hat Enterprise Linux and Windows -- dominating the commercial operating system market. Proprietary Unix is on the downswing, with many Unix systems (AIX, HP-UX and Solaris), and the SCO operating systems being migrated to Linux or Windows. NetWare has been on a very steep decline for several years and Novell recently ended general support for Netware. IBM's z/OS and z/VM are still holding their own as mainframe operating systems.
But it is primarily a Linux and Windows market, with Red Hat Enterprise Linux (RHEL) and Microsoft's Windows operating systems dominating the commercial market to the degree that other server operating system vendors, such as Novell and Ubuntu, will not be able to keep up and will be pushed aside over the next few years. Oracle may have some success with its Oracle Enterprise Linux as a platform for some of its applications, but when compared with Red Hat Enterprise Linux, few users are adopting it for general use. Success around operating systems such as Chrome OS and the advent of more Web-based applications would cut into RHEL and Windows market shares and revenue.
The questions are: Why is Novell, the second-largest commercial Linux server operating system vendor, being discounted as a serious Linux operating system vendor over the next few years?And what does this mean to you, the IT director?
[In full disclosure, the author worked for Novell in product marketing until June 2009.]
Windows and Linux OS dominance by the numbers
To get a feel for the domination of Red Hat Enterprise Linux and Windows, we take a look at some market statistics and IDC statistics from Dec. 2009.
- Red Hat Enterprise Linux currently has about 65% of the annual commercial Linux server operating system shipments, with Novell's SUSE Linux Enterprise Server fromat approximately 30%; Oracle and Ubuntu make up most of the other 5%.
- By 2013, Windows will have about 70% of the server operating system installed base (paid and non-paid), Linux over 24%, Unix about 5%, and all other operating systems 0.4%.
- Linux and Windows' server operating system installed bases are growing while the Unix installed base is declining at a rate of more than 10% per year.
Why Red Hat and not Novell
From a feature/function point of view, there is little difference between Red Hat Enterprise Linux and SUSE Linux Enterprise Server. But due to Novell's financial struggles, it is unlikely that the company will be successful as a server operating system vendor in the long term.
Novell's efforts in the past five to six years to grow revenue around Linux have fallen short of expectations. Novell's annual revenue dropped from over $1 billion in Fiscal Year 2005 to $862 million in Fiscal Year 2009. With respect to sequential quarters,between the fourth quarter of 2009 to the first quarter of 2010, revenue declined in all of Novell's business units for all product lines, and Linux revenue dropped 3.9%.
Elliott Associates L.P. has an offer on the table to acquire Novell. Novell has rejected the offer but has not discouraged higher offers. Acquisition by Elliott or others could result in the disruption of Novell's Linux business, and a sell-off of parts of an acquired Novell would further disrupt the success of Linux at Novell.
On the other hand, Red Hat is building a strong business around Red Hat Enterprise Linux, as evidenced by its consistently strong growth in revenue and employee count.
One significant advantage that Red Hat has over Novell is that Red Hat's Linux installed base is much larger than Novell's Linux installed base. This advantage will grow over the next several years as the server market comes out of the doldrums of the economic downturn. Independent hardware vendors such as Dell, HP and IBM aid Red Hat because they sell many more copies of Red Hat Enterprise Linux than they do SUSE Linux Enterprise Server.
What this means to you as an IT director
You should start choosing between Red Hat Enterprise Linux and Windows as your non-mainframe operating system in the near future. It will no longer be Windows or Linux. It will be Windows or Red Hat Enterprise Linux.
- If you want choice in your data center among third-party proprietary and open source applications, then look toward Red Hat and its open source strategy.
- If your subscription for SUSE Linux Enterprise Server is expiring, think seriously about renewing for Red Hat Enterprise Linux or even migrating to Windows.
- If you are interested in running some of Novell's products, such as those for identity and security management, or replacing NetWare services, then you should opt for Windows over Red Hat Enterprise Linux because many of Novell's products ran on Windows before they ran on Linux. It will be easier to replace NetWare services with Windows services than with Red Hat Enterprise Linux services.
- Because of Red Hat's dominance in the Linux market, ISVs will begin to focus on porting their applications more and more to Red Hat Enterprise Linux, with less focus on SUSE Linux Enterprise Server.
- If you are interested in clouds, private (on-premises) or public with the option to move applications and data to public clouds when warranted and back to your private cloud (thereby creating a hybrid cloud environment), then you should seriously consider creating your private cloud(s) with a Red Hat flavor, such as Red Hat Enterprise Linux and Red Hat Enterprise Virtualization.
- Public cloud suppliers already support Red Hat Enterprise Linux and open source hypervisor Xen (we believe that KVM will replace Xen as the favorite open source, free hypervisor among cloud service providers). Red Hat could conceivably dominate in the public cloud area with this acceptance of KVM.
- Don't concern yourself with Linux vendor support for LSB, if you ever did, as a criteria for choosing between Red Hat Enterprise Linux and SUSE Linux Enterprise Server -- LSB will become a thing of the past because Red Hat Enterprise Linux will be the only commercial Linux to which ISVs will port.
- Don't worry that Red Hat's pricing will increase with the demise of SUSE Linux Enterprise Server -- competition from Microsoft and non-paid Linux will keep the price low.
ABOUT THE AUTHOR: Bill Claybrook is a marketing research analyst with over 30 years of experience in the computer industry, with the last 10 years in Linux and open source. From 1999 to 2004, Bill was Research Director, Linux and Open Source, at Aberdeen Group in Boston. He resigned his competitive analyst/Linux product marketing position at Novell in June 2009 after spending over four and a half years at the company. He is now President of New River Marketing Research in Concord, Mass. He holds a Ph.D. in Computer Science.
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