Commentary: Linux--love me, love me not

By Ted Schadler, Vice President

Fourteen percent of U.S. companies are doing Linux deployments this year. That marks 66 percent growth from late 2002.

In which industries has Linux taken hold most solidly? Services, technology and telecommunications lead the charge, while traditional laggards like retail are also queuing up to get the benefits of Linux economics. But others, especially financial services and production and supply firms, are holding out.

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We found that 14 percent of firms already have Linux in production going into 2004, up from the 9 percent that had Linux in production in late 2002. But we found that Linux adoption varies widely by industry:

• Services companies are the likeliest to have Linux in production. More than one-quarter of services, technology and telecommunications companies report that they have Linux in production. These traditional early adopters also led the penguin pack in 2002 with 17 percent reporting Linux in production then. Why are these companies moving to Linux? Simple. Unix reliability at Intel prices, good enough capability and growing commercial support make it easy to run Unix Web and application workloads on Intel hardware.

• Retailers will be the next to make Linux a priority. Surprisingly, it's retailers--notoriously late to adopt new technology--that will propel the next wave of Linux implementations. Twenty-three percent of retailers--versus 17 percent of all companies--are considering Linux. And retailers are also the most likely to be piloting Linux: 15 percent of retailers are doing so, compared to 10 percent of all companies. What's driving retailers to Linux? Two factors: This cost-conscious industry is getting on board with Intel-driven Linux economics, and IBM is bringing Linux into its retail accounts.

• The financial services and primary production and supply sectors still snub Linux. Just 8 percent of financial services firms and 5 percent of primary production and supply companies have completed Linux implementations--virtually no change from 2002. What is keeping these companies back? Either they're already locked into multiyear server contracts and aren't springing for new applications, or they're wary of Linux's emerging market characteristics like immature production support or uncertainty about open source's future.

Our take? Linux is more than ready for the enterprise.

© 2004, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.