Analysts believe that Linux will become a big league player in the dedicated server market, giving Microsoft's Window NT a run for its money.
Researcher company Dataquest forecasts that users will be demanding servers based on the open source Unix operating system more strongly in the server appliance market - servers with a limited set of services such as Web serving - than they will in the traditional file and print or application server market.
Dataquest estimates that by 2003, Linux servers will account for about 24 per cent of the worldwide server appliance revenue, or $3.8 billion, compared to only 3.4 per cent of worldwide traditional server revenues, or $1.9 billion.
Kimball Brown, analyst for Dataquest said: "Much of the hype surrounding Linux will fade once Microsoft delivers a service pack for Windows 2000, but in the server appliance market, Linux is becoming a credible and favourite operating system used by server applicance vendors."
"A slew of appliance vendors are using Linux rather than other operating systems or Windows NT Embedded that require licensing fees," he explained.
Brown said that small businesses can benefit from lower prices because appliance makers can cut costs: "Not only is Linux free but the support and continual upgrade of Linux offloads the vendor from having to support its own operating system."
IDC analyst Kirsten Ludvigsen agrees: "Linux has technical shortcomings, for example in file handling which is essential to database useage and it has only just got failover nodes implemented now, but it gives a good performance for a limited hardware base."
Colin Tenwick, European vice president of Linux vendor Red Hat, said: "We have had enormous penetration in the server appliance market. Our number one application is Web servers, but we want to develop in other areas such as open source portals."
"It is not just about the maturity of the operating system. It is about approach, price and choice which is more difficult to put a value on," he said.
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