Mid-sized companies not interested in Linux - report

London (ON) - Not too long ago, Linux was believed to have the potential of challenging and even replacing the Windows operating environment on computers virtually everywhere. A new study found that the advance of Linux has stalled in the high-volume market segment of mid-sized firms.

The results of the survey published by Info-Tech Research Group are sobering for the Linux community and could have far-reaching effects on Linux companies targeting mid-sized corporations with their products.

According to the data, only ten percent of the 1400 companies in the US, Canada and the UK which took part in the study, consider to evaluate Linux within the next three years. Five percent of respondents plan to evaluate the open source operating system within one year. Of the companies who did not already have Linux installed, 48 percent "have no interest whatsoever" in the software and a further 15 percent are "not sure".

"Just 27 percent of mid-sized companies currently have Linux installed and almost half of the respondents said they have no interest in Linux. The Linux advance into this market has stalled," said Frank Koelsch, executive vice president of Info-Tech Research Group. "Microsoft still dominates this market and is the clear leader for mid-sized companies."

According to the analyst, Linux initially promised to be a "viable alternative" to Microsoft, especially because it is free. "But business reality is setting in," said Koelsch. "Linux was initially hot, but interest has substantially declined. Companies are past the hype and taking a much more cautious approach towards Linux."

According to the analyst, Linux now is subject to business decisions especially in mid-sized firms, which Info-Tech defines as corporations with revenues of less than $1 billion. These decisions for example include scrutiny of the total cost of ownership (TCO) of a technology : "Yes, Linux is ’free’. But firms understand that there is substantial indirect cost involved. For example, organizations have to buy support and deal with the cost of implementing a second OS environment, which causes problems in firms that have smaller IT staffs and face cost pressure."

While the hype is largely gone, Koelsch believes that Linux still is viewed as a more secure operating system - a perception that helped Linux significantly to gain popularity over recent years. However, security now "is just one of many aspects considered" by corporations for or against a software purchase.

Koelsch was careful to crown Microsoft as the final OS winner in mid-sized organizations. However, he said Microsoft "is heavily entrenched" in this area and it "will be very hard to replace Microsoft in this segment." In contrast, the market opportunity for Linux currently looked "very small". Koelsch does not believe this scenario to change within the next 12 to 36 months.

Little interest in Linux also affects Linux companies who try to sell their products into this market. "Manufacturers should look to provide specialty applications or to completely different segments with higher interest in Linux," Koelsch said.