Commentary: Linux faces the law of capitalism

Economic downturns separate the strong companies from the weak, and the Linux market will be no exception to this rule.

2 min read
By Tom Henkel, Gartner Analyst

Economic downturns separate the strong companies from the weak, and the Linux market will be no exception to this rule.

The cycle has played out many times in the high-tech industry:

 A new technology starts to gain popularity.

 A large field of new companies emerges with high hopes of addressing the new business opportunity.

 The number of companies that offer fundamentally the same product quickly exceeds demand.

 Most of the hopeful companies fail.

 The market contracts around a smaller field of players that have demonstrated their viability for a variety of reasons.

That is what has happened in the case of Linux, and Gartner has always advised companies to proceed cautiously in the face of the enormous hype. But Linux enthusiasm is not fading away entirely--although it's probably quickly approaching the "trough of disillusionment" in the Gartner Hype Cycle. Some reassessment of where Linux really fits into an enterprise's IT infrastructure was inevitable.

The current level of activity suggests the opportunity for Linux has not yet peaked. Still, the route to success will become much more complicated (and expensive) for Linux distributors. Providing obvious added value will become critical and will probably involve an operating system/middleware software stack, not just operating system distribution.

See news story:
Only the strong survive in Linux landscape
Gartner continues to believe that application providers will not support every Linux distribution on earth. An independent software company will test only a small number of distributions, and getting on that short list will be a critical challenge for all Linux distributors. For companies, that will prove an expensive undertaking, especially because venture capital has dwindled, if not evaporated.

As with the Internet boom, the Linux market has shown itself to be subject to the basic reality of capitalism--to survive, sooner or later a company must turn a profit. Some Linux distributors will likely fail. Some will merge. Others will likely be acquired by the bigger server companies. Red Hat Software has gained the most brand recognition, but others have established some level of recognition and will probably survive.

As with Unix, the market can sustain three, maybe four, different Linux distributors, along with a perhaps few niche players.

(For related commentary on the Linux operating system, see TechRepublic.com--free registration required.)

Entire contents, Copyright ? 2001 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.