Linux Enterprise Market Trends


Linux Enterprise Market Trends










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Linux Enterprise
Market Trends

by Lynn Greiner

Copyright 2017, Faulkner Information Services. All Rights
Reserved.

Docid: 00018885

Publication Date: 1710

Report Type: MARKET

Preview

The Linux operating system has become a standard in many
enterprise data centers. Major corporations and government agencies around the
world are using Linux instead of the solutions offered by Microsoft and UNIX
providers. Among the reason for the continued popularity of Linux in the
enterprise are cost savings, the need for flexibility, and improved
functionality. Companies are also discovering that they do not have to perform a
wholesale migration; they can use Linux where it makes sense and use Windows or
another operating system where it is appropriate.

Report Contents:

Executive Summary

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Linux is now commonly being used as an enterprise operating system,
especially in Web-based operations such as the cloud.

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Major corporations and government agencies around the world are using Linux instead of the solutions offered by Microsoft and UNIX providers. A number of key
drivers are responsible for the continued popularity of Linux in the enterprise, including cost
savings, the increased role of Intel, and the need for flexibility and improved
functionality within organizations. These benefits
have made up for the increasingly less limited range of applications, and the need for staff training and resources
to manage the migration to Linux. Companies are also discovering that they do
not have to perform a wholesale migration; they can use Linux where it makes
sense, and use Windows or another operating system where it is appropriate.

The Linux movement has the backing of the largest and most influential hardware providers,
including IBM, Lenovo (who purchased IBM’s X86 servers), Dell, and Hewlett
Packard Enterprise (HPE). Leading Linux distributors,
including Red Hat, SuSE, Canonical (creators of Ubuntu), and
the
now dormant Turbolinux, ease the transition by offering not only software, but
training, support, and consultancy services as well.

Linux has made its name in the server operating system market, where it competes against
Microsoft’s Windows platform and the various flavors of UNIX. A survey sponsored
by enterprise Linux vendor SuSE revealed that 83 percent of enterprises have deployed
at least some Linux in their server environments. Linux, however,
has made few inroads in the desktop segment. 

One inhibitor of Linux adoption in the enterprise had been the threat of litigation
from the SCO Group. The UNIX vendor has been locked in legal battles with IBM and other
companies over its UNIX intellectual property (IP) rights and whether any of its
UNIX code has
been stolen and used in the Linux OS. On
June 15, 2009, SCO announced the sale of many of its assets, and the
assumption of some liabilities, to unXis (now renamed Xinuos). In March 2010, a jury found that
Novell is the legal owner of UNIX, not SCO, but SCO continued to battle IBM,
blaming that company for declines in its revenues.

The saga finally came to an end in January 2011 (or so we thought), with
unXis acquiring SCO’s intellectual property and assets, free of all
encumbrances and retained obligations of the previous owners and announcing
it would concentrate on rebuilding the product and technology and creating
industry-leading consulting and support services. However, while Xinuos
concentrates on enhancing and supporting the operating system, in June 2013
the remaining components of SCO reopened the case against IBM. IBM countered
with a motion for partial summary judgement at the end of July, and SCO
countered that. There has been no obvious activity since. Analysts do not
expect SCO to prevail, but do expect the legal squabbling to drag on. 

Microsoft has claimed that Linux and other open source software infringes on
over 200 of its patents, although it expresses no intention to litigate, and has
actually partnered with several Linux vendors and is increasingly involved with
the Open Source community, even releasing a version of SQL Server that runs on Linux.

Market
Dynamics

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There are several key drivers contributing to the adoption of Linux in the enterprise market:
the search for cost savings, the pivotal role played by Intel, the need for
flexibility, and
improved functionality.

Cost Savings

The adoption of Linux accelerated as corporations looked for
flexible solutions that are both robust and cost effective. After enjoying significant cost
savings using Linux for low-end applications such as file, print, Web, and mail servers, more
and more enterprise administrators now have direct experience of how reliable this open source
OS really is, and they are keen to enjoy similar cost savings with mission-critical
applications.

Linux had tended to be more stable than some
older versions of Windows (though
that advantage has diminished with newer versions of Windows), so there could
be less downtime. Additionally, the OS is
less resource-intensive,
leaving more
computing power available for other functions. Linux is almost as reliable as UNIX, without the associated cost of
the proprietary platform. This makes for a
very compelling reason to evaluate Linux, even in the face of studies
sponsored by Microsoft
which show that its tools have a better TCO.

The Pivotal Role of Intel

A second key factor has helped Linux gain a foothold in the server market. Intel,
historically very closely aligned with Microsoft, started optimizing for both Linux and Windows.
Since Intel processors dominate the PC marketplace, this strategic shift made it possible for
corporate buyers to acquire the hardware needed to run Linux at competitive prices.

Without this implicit support from Intel, it would be more complicated for
server administrators to migrate from UNIX or Windows to Linux. A key barrier to
change was
eliminated. Major companies now use Linux, including Merrill Lynch and the
E*Trade Group. As the performance of Intel chipsets continues to improve, Intel-based servers have
become very competitive compared to RISC-based servers. When combined with Linux,
these Intel servers drive down the cost of enterprise computing and offer a viable
alternative to some legacy systems.

Need for Flexibility

A third key factor has encouraged IT managers to consider Linux as a serious alternative to
Windows: Microsoft’s licensing structure. In part, dissatisfaction with the cost
and restrictions of Microsoft licensing have helped Linux grow at a rapid rate.
Currently, a number of the brokerages
on Wall Street use Linux.

IT managers have become very responsive to the flexibility that Linux offers – a way to
create a
separation between hardware and the OS. Before enterprise administrators started to adopt Linux
for server applications, legacy hardware and software typically came
from a single vendor. An HPE, Oracle, or IBM RISC-based server required
customized software, and the decision to use an Intel server meant the purchase of either Windows or
Unix. As an alternative, Linux can be used
across all processing platforms and on the hardware offerings provided by all the major
players in the server market. An enterprise administrator with Oracle, HPE,
Lenovo, or IBM x86-based machines can now decide to move to Linux
and then negotiate for the best price and performance package from hardware vendors.

Improved Functionality

A fourth factor has helped Linux to become more widely accepted in the enterprise. The open
source community has shown a sustained commitment to Linux, and this dedication is yielding
continuous functionality improvements. Already Linux can compete with UNIX for a number of
applications and this market creep is likely to continue.

Two Linux standards bodies worked hard to ensure that Linux would be a robust OS as it
matured. The Free Standards Group and the Open Source Development Lab
were both committed to the
development of a universal basic Linux. In January of 2007, the
organizations merged to create The Linux Foundation, whose goals are
to protect Linux by sponsoring key developers and providing legal
services, offering standardization services and acting as a neutral
forum for collaboration and promotion of Linux.

The support of the major hardware manufacturers and software vendors has also
given this OS the credibility it needs to gain widespread acceptance.

Governments Looking for Microsoft Alternatives

In the wake of anti-trust judgments against Microsoft by the US government
and the EU, there was
willingness to seriously consider Linux as a Windows alternative. Linux is attractive to
government agencies for a number of reasons: the code can be exchanged between agencies allowing
a team of developers to control a project and spread the development overhead; there
is a some degree of independence from software vendors; and the prospect of cost savings.

A number of US federal agencies use Linux, including the US Department of Labor’s
Occupational Safety and Health Administration, the Federal Aviation
Administration, and the US Agency for International
Development. In total, more than 160 different governments worldwide are using Linux programs.
China and Brazil, for example, have both created their own Linux distros, which
are distributed for nominal prices to their populations. City government agencies in Paris and Munich
have also made the move, switching from Windows and other Microsoft offerings to Linux as well.
The French police moved to their own custom Linux distro as they replaced
Windows XP on the desktop. Several Italian government ministries, including the Ministry of
Justice, made the switch, as have the Swedish State Pharmacy and
the French Ministry of Education. In South Korea,
a government-wide promotion was launched to increase the free use of the Linux operating system
in the public sector. The move is especially significant due to
South Korea’s lead among the rest of the world in terms of broadband, where Internet
penetration as seen more than seven of ten households in the country having access.

Red Hat, one of the leading Linux distributors, looking to capitalize on the
Linux trend in government, launched a government business. According to the vendor,
every US Cabinet-level agency already uses its Linux tools in some way, including the US Energy
Department, the National Oceanic and Atmospheric Administration, and the Army.
In April 2007, it signed a master marketing agreement with Scientific
Applications International Corp. to supply products to defense organizations.
The government unit at Red Hat will look to continue US government adoption of its
Linux tools, as well as extend Red Hat software usage across the globe.

Other agencies at local, state, and federal levels are exploring the
possibility of using Linux although they have been slow to reveal the full
extent of their Linux implementations. For government agencies, the determining
factor is almost always cost. When Microsoft introduced increased cost to its
licensing with the introduction of the Windows 2003 Server, which
was maintained for Server 2008, alarms began to
ring in government IT offices. When the cost of the Microsoft Office System and other
applications is factored in, it became apparent that being a single vendor shop had just gotten
considerably more expensive. With open source applications available to be run under Linux and
improved customer service from both distributors and computer companies, Linux
became a viable alternative for government IT personnel.

The Cloud

Linux servers power the majority of the cloud infrastructure, with
over 75 percent
of enterprises reporting that they use it as their primary cloud platform in a
survey by the Linux Foundation among companies with sales over $500 million or
over 500 employees, including members of its Enterprise End User Council.
In addition, over 99 percent of the world’s fastest supercomputers run Linux, as
do 95 percent of the top million domains.

Market Leaders

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Linux Enterprise has the backing of several key vendors in the IT industry. These include
computer systems vendors and distributors.

Computer Systems Vendors

As discussed earlier, Intel chips support Linux, but the true force
behind enterprise adoption of Linux has been the computer systems vendors such as IBM, HPE,
Lenovo,
Dell, and Oracle. These vendors went from providing product lines that were defined as either
UNIX- or Windows-based to offering systems with a choice of OS or even multiple OS support on
the same system.

IBM. IBM offers Linux e-business solutions for companies
looking to deploy and manage Linux-based solutions. Migration services, branded
as "The Migration Factory," are also available to assist clients moving
applications from UNIX or Windows to Linux. IBM supports Ubuntu, Red Hat and
SuSE Linux on the majority of its server line. IBM also offers Linux consulting
services to help clients who are investigating Linux as a replacement to their
current OS. IBM works closely with customers who need help planning and
implementing Linux clusters for Internet and enterprise mission-critical
applications. Both Mira, the IBM supercomputer named number
nine of the top 500 supercomputers in June
2017, and Sequoia, named number
five, run Linux, and IBM’s Watson supercomputer runs SuSE Linux Enterprise
Server. In 2015, it introduced LinuxONE, a community built on
partnerships with universities, whic provides 120 day trials of Linux servers
based on Red Hat Enterprise Linux, SuSE, and Ubuntu. 

Oracle. Sun, which is now part of Oracle, started to produce low-end Linux servers while aiming to
maintain its share of the high end with its Solaris Unix operating system. Sun had a long-term relationship with Red Hat
but
Oracle is now actively encouraging its customers to move to its own Oracle
Linux.

Before the acquisition, Sun also settled all past legal differences with
Microsoft and signed a cooperation agreement with its former nemesis, proving that the search for
profits makes stranger bedfellows than politics. 

A more significant move for the company, however, was its decision to open
source its Solaris operating system.

Hewlett Packard Enterprise. HPE,
which holds the server business formerly owned by Hewlett Packard before it
split, offers support for Red Hat Enterprise Linux,
SuSE, Ubuntu, Wind River, and Oracle Enterprise
Linux. HPE is following in the footprints of IBM and enabling all of its server
lines to run on Linux as an enterprise alternative to Windows. Each key account is assigned a
support engineer to work closely with the client in addressing key issues that need to be
managed to optimize the use of Linux in the enterprise. HPE provides online Linux support as well
as phone support. HPE’s memory-centric computing architecture, known as The
Machine, runs a variant of Debian Linux.

Dell. Dell supports Red Hat Enterprise Linux, Ubuntu, and SuSE Enterprise Server on its PowerEdge servers in
the enterprise. Its cloud products support Ubuntu and SuSE, and its OEM
appliances offer Red Hat or SuSE. Its management tools support the OS, and it
also offers a wide range of services to assist customers in migrating to and
running their Linux infrastructure.

Lenovo. Lenovo, which acquired IBM’s x86
server business, supports Red Hat Enterprise Linux, SuSE, Oracle Linux, CentOS,
Debian, and
Ubuntu.

Linux Distributions

Red Hat, SuSE, and Ubuntu, (and less so Turbolinux, whose latest release was in
2012) have a wide range of products
and services to help corporate users install, develop, and manage their investment in Linux.
These vendors are among the leaders in the Linux market, and are contributing
to its direction in the future.

Red Hat. Red Hat is the largest and most recognized provider of open source and Linux
technology. In 2003, Red Hat Linux Advanced Server became the first Linux platform to
achieve US Department of Defense (DoD) Defense Information Systems Agency (DISA) Common
Operating Environment (COE) certification. COE is a DoD software security and interoperability
specification and is broadly recognized as a critical computing standard throughout the US
Government. This certification establishes Red Hat Linux Advanced Server as an
approved DoD mission-critical operating system and sends a clear message to Enterprise
administrators everywhere that Linux is a robust and highly secure solution.

Red Hat re-named the Advanced Server as its Enterprise Linux and offers it to Fortune 500
companies and large government agencies. In additions, Red Hat offers its Red Hat
Satellite, a
network management package for companies that have deployed Red Hat
Enterprise, and provides variants of the OS for mainframes, high performance
computing and high availability clustering.

In November 2015, Microsoft announced that Red Hat
Enterprise Linux would be the preferred choice for enterprise Linux
workloads on Azure.

SuSE. Novell acquired SuSE Linux in November 2003. This validation of Linux by
such a major industry player signaled the next stage of Linux’s acceptance by blue chip
organizations. Novell’s acquisition by Attachmate Group was finalized in April
2011, and SuSE was spun off as an independent business unit. SuSE Linux Enterprise Server has been deployed and tested by Oracle, and has been
officially validated as a supported OS platform for its leading database offerings.

The SuSE Linux Enterprise Server edition has been maximized for medium-sized and large enterprises.
Its strengths are in the fields of high availability and scalability. In server clusters, SuSE
Linux Enterprise Server enables high availability for mission-critical applications and network
services. Versions are available that are optimized for IBM System z, SAP
Applications, VMware, Microsoft Azure, HPE Helion, Google Compute Engine, and Amazon EC2.
It is the only commercially supported Linux for HPC available through Microsoft
Test Drive.

In November 2006, Novell and Microsoft announced an alliance that sees
Microsoft distributing SuSE license certificates and indemnifying customers from
any litigation it should launch. Microsoft and SuSE have since
extended the agreement, which they said served over 725 customers
worldwide.

In March 2008, Novell and SAP partnered to optimize SAP for SuSE,
create a Linux-based SAP application appliance, integrate governance,
risk and compliance solutions, and collaborate on sales and marketing.

In July 2015, it extended support to servers running 64-bit ARM processors.

In September 2015, Attachmate merged with Micro Focus, and
in February 2016, SuSE’s CEO joined the Micro Focus board.

In June 2016, Intel announced that it will distribute SuSE
Linux Enterprise Server for HPC as an option with its HPC software stack. In the
same month, HPE and SuSE delivered a scalable object store solution powered by
Ceph.

In November 2016 SuSE acquired the OpenStack IaaS and
Cloud Foundry PaaS assets from HPE.

Turbolinux. This Linux distributor offers a wide variety of Linux OS products,
including a desktop client, the Turbolinux Enterprise Server, a 64-bit Linux OS, a Linux product
optimized for clustering, and a midrange server edition. Turbolinux
was the number one Linux
distributor in the Asia-Pacific market and, as such, was providing much of the infrastructure for
China’s digital upgrade. Turbolinux had partnerships with Intel, AMD, and IBM for chip support,
and with Dell, and IBM for server support. It also had a broad
collaboration and interoperability agreement with Microsoft.

Turbolinux designed its Turbolinux Enterprise Server from the ground up to support
mission-critical enterprise applications, including the handling of 4 TB of data, a requirement
for many Fortune 500 deployments. The current version of the Enterprise Server supports both
32-bit Intel processors and the 64-bit Intel Xeon and AMD processors,
and includes drivers for Fibre Channel and InfiniBand devices.
However, it has not released an update since 2012, and is now flagged as
dormant on the DistroWatch website.

Ubuntu. Ubuntu (Canonical) products run the gamut of
applications, from phone to desktop to enterprise server to cloud. It offers a
long-term support (LTS) version, released every two years, that includes five
years of commercial support, plus more frequent interim releases that add
functionality. Ubuntu is certified on AWS, Microsoft Azure, Joyent, IBM, and HPE clouds. The current version provides OpenStack support, is compatible with Cloud
Foundry, and is certified by Microsoft as a host for Windows Server 2012 and
Windows Server 2008 R2. It is supported on Microsoft Azure,
and supports CephFS and ZFS-on-Linux. Ubuntu Advantage is the commercial
support package from Canonical. It includes Landscape, the Ubuntu systems
management tool, for running desktop, server and public cloud deployments, or
building and managing private OpenStack clouds, and the
LivePatch service, which permits kernel updates without requiring a reboot.

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Today, Linux powers the
cloud world-wide, and over 99 percent of the world’s supercomputers rely on the OS.
It powers over two
thirds of the Web server market.
Over 75 percent of cloud-enabled enterprises use Linux as their primary cloud
platform. In countries abroad, such as Brazil, Linux is quickly becoming
the platform of choice across the enterprise, for desktops as well as servers.

Migration Gains Acceptance

The major hardware manufacturers have accepted Linux as an alternative to
UNIX and Windows, and all the major server vendors offer Linux servers. IBM,
HPE, Dell, Lenovo, and Oracle offer servers for basic operations such as file sharing as well as more
sophisticated machines that can handle a wide range of server functions. In
fact, most supercomputers run Linux.

This means enterprise administrators now have a choice of competitively priced servers, which
makes Linux more cost effective. When E*Trade dropped Sun to adopt Linux, 60
machines costing $250,000 each were replaced with 80 Intel-based Linux servers costing $4,000
each. UNIX also has been losing market share to Linux and Windows, although
it is still strong in high-end enterprise applications. 

Because the Linux interface is similar to
UNIX, programmers can relatively easily transfer skills to Linux, and the cost saving in
software can be very significant. With its smaller footprint, Linux often outperforms both Windows and UNIX on the same
hardware, and as companies add web servers, increasingly Linux is been chosen instead of the
more expensive to purchase and maintain UNIX boxes.

Linux to Dominate

More conservative companies began by replacing UNIX at the low end with Linux for non-critical
server functions such as file and print while keeping UNIX at the high end for mission critical
functions. However, today Linux is
increasingly dominating in
most server
operations at the expense of UNIX.

Microsoft Responds To the Threat

Microsoft takes Linux seriously, realizing that it is no longer a
homogeneous world in most datacenters. Its System Center management tools now
support Linux servers too, and the company offers native connectors to its SQL
Server database. In addition, SQL Server now runs natively on
Linux. Since its licensing fee structure can make Windows Server a very expensive proposition, a cost that many companies are not
prepared to accept, and Linux has an acknowledged place in the datacenter,
Microsoft services such as Azure support the OS alongside Windows. It had already announced support for Linux starting with its Virtual Server 2005 R2 and Windows
Server 2008 R2 Hyper-V
platforms, and its partnerships with SuSE
and Red Hat have opened the door to further
forays into the Linux world. Additionally, it has open
sourced a number of its tools, which run on Linux, and acquired Xamarin
to give it native development capabilities in Visual Studio.

More Business Applications

In response to market demands, Red Hat, Canonical (Ubuntu) and SuSE have
introduced more enterprise focused business strategies. In the past the lack
of enterprise applications has limited the adoption of Linux. Now that this
drawback has been addressed by major
software vendors, continued growth is assured.

Strategic Planning Implications

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In terms of moving ahead with a migration from Windows to a Linux environment, the issues to
address are staff training, hardware requirements, availability of application
software and desired functionality. Staff with a UNIX
background are better equipped to deal with Linux than Windows
administrators, but there are enough differences that
training is mandatory. If all programmers on board are Windows-trained, the learning curve is
going to be long and steep. In fact, some Windows programmers may choose to change jobs rather than
re-train. However, this risk is being mitigated somewhat by
the integration of Linux development into Visual Studio making the
learning curve more tolerable.

The migration to Linux is rarely as smooth as the Linux distributors claim it is. There is
limited code portability and compatibility between Linux and Windows – expect some challenges and
make sure your staff are properly trained to deal with them. It may be prudent to budget for
some consultancy to handle unanticipated coding problems. This, of course, adds to the
cost of the migration, but may be cheaper in the long run. There may also be
applications for which it makes more sense to simply remain on a Windows
platform.

It is also advisable to plan the hardware configuration that is best suited for the growing
needs of the enterprise. Many legacy systems may need to be upgraded to fully exploit the
potential offered by Linux. Oracle, Dell, HPE,
Lenovo, and IBM are established in this space and are well
positioned to provide consultancy, training, and hardware.

In terms of functionality, Linux has made steady gains but still trails
Windows in some business applications.
Before
attempting to migrate to a full Linux environment, it’s
critical to do an audit of applications to ensure that stable Linux versions
with the necessary functionality are available. Many Linux distributors saw
the Windows Server 2008 delays as a market opportunity for Linux-based systems
and applications. However, after the advent of Windows Server 2012, they again
faced market challenges. Additionally, Microsoft has shown
willingness to reveal some of its code; part of its
agreement with the US government after losing the antitrust case over a decade
ago was to open
its source code to application developers, making some of its solutions more
acceptable to open source advocates. It makes
sense to closely watch Microsoft’s ongoing response to and involvement
in the open source movement, especially as initiatives such as its
open source development tools expand. So far, that response is encouraging –
it is working with over 150 standards bodies, and belongs to over 400 working
groups worldwide, and those numbers are growing.
It even participates in Linux user conferences to show that it is truly
onboard.

For many reasons, a phased migration to Linux is preferred by many enterprises. Often IT
departments and programmers choose a few applications to port to Linux
to begin with. After successfully
using Linux for non-mission critical tasks, enterprise administrators have a greater depth of
experience and knowledge to guide them in considering a full migration.

The Linux distributors offer a range of services to help evaluate the alternatives, plan the
migration, and ensure a smooth implementation. Training, support, and consultancy are offered,
depending on how much of the work the enterprise wants to outsource.

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About the Author

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Lynn Greiner is Vice President, Technical Services
for a division of a multi-national corporation, and also an award-winning
computer industry journalist. She is a member of Faulkner’s Advisory Panel.

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