January 4, 2004

In Europe, Apple Threatens Linux

Everyone knows the Linux headlines and the hype. But the situation in Europe, on the ground, is a little more complex; and certainly subject to a different set of market and industry forces than in the United States. Here are four predictions for 2004 about Linux in Europe.Prediction 1: In Europe, Linux service provider revenues will flatten, despite continued exponential growth in new user Linux downloads.

The user base stats will continue to climb, but the number of subscribers to service provider annual contracts will remain flat in 2004, as Linux service providers struggle to be as profitable as commercial software companies, without charging as much for their products. Some commercial server licensing schemes are now competitively priced to enterprise versions of Linux. This competition will intensify in 2004, undermining some of the Linux pricing differential. Linux service providers donĂ¢t really expect competitors to sit still, do they? Linux in embedded systems, network appliances, etc. will grow at a high exponential rate, creating outsourced Linux development contracts for service providers adapting Linux kernels. Development contracts will continue to contribute significantly to the profitability of service providers in 2004.

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