OS Market Faces Challenges From Linux and Virtualization

A recent Gartner market research study predicts that the worldwide OS market will continue single-digit growth in 2008, but will face disruptions from Linux, virtualization technologies and a faltering U.S. economy.

OS 2008 revenues will reach $26.9 billion, an increase of 7.2 percent from 2007, and revenues could surpass $37 billion by 2012. PC sales are driving short-term OEM OS revenues, including Microsoft's proposed discontinuance of Windows XP and the Windows Vista SP1 release are market factors that could drive Microsoft's 2008 first-half sales, and the company's successful anti-piracy efforts could continue to improve this year's revenue figures.

The potentially disruptive forces include the rise of Linux as a top server OS, virtualization technologies, multicore processors, alternate application delivery methods such as Software as a Service (SaaS), government-backed open source initiatives, and a lagging U.S. economy that could affect PC sales.

The report says that Linux is the fastest growing server OS market because of its solid cost-to-performance ratio, increasing support services, and lower cost of ownership.

The report also predicts that the adoption of virtualization technologies will improve companies' abilities to manage resources and, possibly, require fewer licenses. Virtualization will also impact the OS market as embedded OSs on virtual machines replace traditional OSs.

Matthew Cheung, a Gartner senior research analyst, says “Software vendors can prepare for these technology shifts by ensuring that they can provide offerings compatible to virtualized environments, by evaluating solid SaaS offerings, by planning open-source and cloud computing strategies, and by formulating new pricing schemes on multicore machines.”

The Gartner press release is available on WebWire at www.webwire.com/ViewPressRel.asp?aId=66031

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