Red Hat Plans to “Own” 50% of Server Market by 2015

Dennis Byron submits: The always anticipated IDC Worldwide Quarterly Server Tracker factory revenue numbers were released November 29. This batch is for the period ended September 30, 2007.

In the numbers, Windows-based server shipment revenue crossed the 40% threshold for the first time. But despite conventional wisdom about a battle between Linux and Windows, Windows gains over time are at the expense of “other,” basically the mainframe. Unix/Linux-based system factory revenue maintained its overall market-share leadership at just under 45%.

The calendar 3Q 2007 results for Unix/Linux were 8% higher than the same quarter a year ago but last year’s quarter was most likely an anomaly. As shown in the column-chart below, calendar 3Q 2006 was the low point over the last two years by two or more percentage points of share. Research 2.0 believes calendar 3Q 2006 results were depressed by the then anticipated release of new servers optimized for Unix/Linux.

It appears from almost two years of IDC data that the Unix/Linux share of the market is stabilizing in the 40-45% range. The major question is how quickly Linux systems will displace Unix (for more on that issue, see my analysis at ebizQ.net).

That’s the market chunk that Red Hat (RHT) is aiming at with its recent announcement that it plans to “own” 50% of the server market by 2015. It is the mothballing of a lot of Digital UNIX, AIX and HP-UX systems that make that objective doable but it will require perfect execution since Red Hat will need to grab a piece of “other” as well. That’s why Red Hat sees its products becoming a mainstay on the mainframe as well.

Also, as noted, when the calendar 2Q server shipment numbers came out of IDC, Windows also continued toward the 50% of sales mark formerly held by UNIX and MVS at different points earlier in this decade and in the 1990s. In that sense, there is a Windows-Linux battle on the horizon; it’s just a few years away and its all about “other.” Of course Red Hat does not have the lock on Linux shipments that Microsoft (MSFT) has on Windows shipments, so its shot at the 50% threshold will be more difficult.

double click to enlarge