Windows Dominance to Continue

According to market researcher IDC, Windows will continue to dominate the desktop market and lead in the server arena for the foreseeable future. Indeed, Windows NT Workstation revenue grew by $1.6 billion in 1999, besting the overall growth of the market, which was $1.53 billion. More tellingly, enthusiasm for Linux hasn't translated into actual dollars spent: Linux commanded only $36.9 million of 1999's desktop market.

"Undoubtedly, there is a lot of excitement surrounding Linux, but so far this technology has failed to ignite a broad revolution against the Microsoft-dominated desktop world," said Al Gillen, IDC's system software research manager. "Revenues from sales of Linux remain a single droplet compared with the sea of cash that the Windows products generate." IDC predicts that Linux desktop usage will nearly triple between now and 2004, but that the growth will be enough to shave only a percentage point or two off Windows' market share.

According to IDC, Windows won't begin to relinquish its hold on the desktop market until 2005 at the earliest. Instead, Windows versions will share the spotlight, with Windows 2000 taking the lead as early as this year. Windows' 1999 desktop market share was 87 percent; that figure is expected to drop only 2 percent by 2004. Most of that loss will be to new desktop devices, not to other PC OSs.

The research company doesn't expect the Mac OS, which saw a slight market share increase because of the iMac's popularity in 1999, to gain much ground because of the decade-long downturn preceding that product. Also, iMac sales in 2000 are already off dramatically compared with 1999. "Apple probably won't be able to make up all the ground it lost in the past decade," Gillen said.

In the server market, Linux overtook Novell NetWare for the number-two position behind Win2K and NT. In 1999, 1.3 million Linux servers were in use, and IDC expects that figure to reach 4.7 million in 2004—a growth rate that outpaces the rest of the server market's expected 23 percent rate. However, the outlook for Linux isn't as rosy as it sounds: Linux revenues will grow a barely perceptible 1 percent during the same period. The OS garnered only $67 million in 1999 and can expect to bring in $85 million by 2004. The problem, of course, is that Linux often runs on individuals' and small companies' low-cost machines; because users can get Linux free over the Internet, most users don't pay for the OS. Even Red Hat Software, which sells Linux and is one of its biggest proponents, admits that it makes more than two-thirds of its revenues, which totaled $42 million in fiscal 2000, from support and services.

"From a revenue perspective, Linux is nothing more than a speck of sand on an ocean beach," said Dan Kusnetzky, vice president of IDC's system software. "Our research indicates the total market for Linux OS software in 1999 was ... about the same amount of revenue that Microsoft's operating systems' business generated by noon on the third working day of January 1999."