Linux To Ring Up $35B By 2008

al@opensourcebrowser.com pastes "For a theoretically free operating system, Linux is -- and will continue to be -- a cash cow, a research firm said Wednesday as it predicted the OS will bring in more than $35 billion in revenues by 2008. Framingham, Mass.-based IDC said that overall revenue for servers, desktops, and packaged software running on Linux will reach $35.7 billion in the next four years."

Comments

I write OSS for Linux

[Limburgher]

So, where's my check? :)

Re:I write OSS for Linux

[Limburgher]

Yes. Did you? I can still charge for support and distribution, I just have to make the source available.

Re:I write OSS for Linux

[infiniti99]

I think his point is that while Linux may be making a lot of money, the actual developers rarely see any of it. Yes, some open source is funded, but most of it is not. Imagine of some of these millions were to go to a project like KDE? Geezus, the whole thing would be done by now.

I don't know who is getting all of this "Linux money", but it certainly isn't affecting the projects I care about. I'm not saying that developers should be jealous of these companies that have taken their products and made money with them. After all, that's part of the freedom that has been given to them. But it is depressing that not much of this money goes back to the community. I don't say this because the developers should be rewarded or get rich, I say it because the money would speed up development.

Many of us probably can name many OSS projects we'd like to see completed. These Linux sales numbers won't impress me one bit until I see my favorite programs being sponsored.

Re:I write OSS for Linux

[IO ERROR]

So, where's my check? :)

You need to go get your product into wide use now. On one project I'm involved with, we're working with a certain .com on a project I can't say much about yet, but we're going to give a certain Microsoft product a run for their money, using open source software. I don't expect any of us to see money from the project for at least two years, though you can bet you'll see the product -- when it's ready -- on the front page of slashdot. :)

In the meantime, keep maintaining your software, and keep getting the word out. If it's good stuff, someone will take notice, and an opportunity to make money off it will come your way.

Re:I write OSS for Linux

[Limburgher]

Excellent point. How do we define "completed" in terms of software, though? Bug-free? Feature-complete? Both either moving targets or chimeras, depending on the project. Even time-tested tools like grep get updated.

Re:I write OSS for Linux

[sloanster]

I don't know who is getting all of this "Linux money", but it certainly isn't affecting the projects I care about.

As always, the money goes to the entrepeneurs. Forget about your favorite projects, if you want to see the money from linux, you need to create something of value to those who have money to spend. I do it by upgrading small and medium businesses to linux and becoming their permanent linux guy, you might do it by writing the killer linux program that small business wants.

One thing ought to be crystal clear at this point, however, even to the most challenged of us - and that is, there is a lot of money to be made in connection with this whole linux thing if you keep your skills sharp, and your eyes open.

Take note, mcses who consider themselves linux savvy because they managed to install redhat inside vmware on their windows pc 2 years ago and learned how to type "ps -ef" just aren't going to cut it. The demand out there is for the real deal, genuine linux talent, which can be earned by anyone willing to work hard and apply themselves.

Re:I write OSS for Linux

[JohnFluxx]

"Most companies see the TCO of Windows versus Linux as immaterial."

Judging by the second sentence, i assume you meant "software cost" instead of "TCO", as the TCO _is_ what matters to companies.

Re:I write OSS for Linux

[urlgrey]

Ah ha! It IS a conspiriacy.

I've got it: Linus and Stallman are in cahoots, and they're cashing my checks!!

;-)

BUT WINDOWS IS CHEAPER!!!

[Anonymous Coward]

GET THE FACTS!

Errrr, Dupe

[MrWim]

See here

$358

[Anonymous Coward]

I saw $358 and was not surprised.

Re:Karma points to..

[Anti Frozt]

Hopefully not the RIAA; otherwise, I would peg the revenue estimate at around $20.

more power to FOSS

[adeydas]

i presume most of this is from donations because the ISO's can be downloaded free. so if linux is turning into a cash cow just by being a free software, then think how much it would have made by being a commercial one... ha! ha! got ya... it would have made quite less as its appreciation comes from its FOSS tag, right?! now that's what i call paying for what you like and not what your vendor insists... more power to FOSS.

$35.7bn?

[Nine Tenths of The W]

Wow. That's a lot of SCO licenses.

Re:Karma points to..

[goon america]

From the article:

The numbers are higher than earlier estimates by most analysts, in part, said IDC, because it changed it methodology to account for not just Linux on new hardware, but also Linux that's redeployed on existing hardware, and even cases when the open-source OS is used as a guest operating system, such as in a server partitioned with virtualization software to run multiple OSes.

So, not only are they counting the hardware that linux is running on as being "spent on linux," they're also counting existing hardware on which linux will be installed as being "spent" on linux as well.

And yet...

[elid]

...Microsoft generates $10.6 billion in annual revenue from Office alone.

(source)

Re:And yet...

[SoSueMe]

Yes, and Openoffice.org rings up significantly less because... it's free.
It does most of what the higher priced software for "Office Productivity" users need.
Comparisons between closed, propreitary, for profit, software and sales of prepackaged support releases are not a benchmark of quality or popularity.

And Its Net Economic Benefit Is Even Greater

[geoffrobinson]

Linux allows companies and individuals to use their money in other areas as well. This helps the economy overall. Cell phones on Linux will be cheaper, etc.

Also, companies can use that money in other areas, which I would assume would make them more productive.

A lot of this revenue is probably for services I would assume.

RMS just called

[Anonymous Coward]

He says the correct figure is GNU/$35B

Is it much?

[asac]

Microsoft will earn $38 bn in 2005.

IBM received $23.2 bn in 2004.

How will those figures look in 2008?

Re:Is it much?

[nagora]

Those figures are not comparable: Microsoft's is for the year, IBM's is for the quarter. IBM's consulting devision takes in more than then whole of Microsoft. IBM can't match Microsoft's profit margin, though, so MS is still the richer company. But I'd bet on IBM still being around in 50 years when MS is long gone.

TWW

Re:Karma points to..

[SetupWeasel]

To be honest, it is only monopolistic when you have a monopoly. There are a lot of very good business practices that are not allowed when you have a monopoly.

Warning

[Ars-Fartsica]

These are the same people who claimed B2B sites would be transacting $10 billion a year by 2006 whilst praising ATM networking, 3G networks and AOL.

Yet the same people completely missed portable MP3 players, VOIP, etc etc

Don't count your money before it's made.

[SetupWeasel]

Didn't we learn anything from 4 years of George W. Bush?

That's where the number comes from!

[EmbeddedJanitor]

It's just $1billion duped many times on Slashdot!

Re:That's where the number comes from!

[fiftyfly]

|snip|

Real programmers have sixteen fingers.

Hmmm - I guess, if you consider all 0x10 digits as fingers. I'm afraid 2 of mine are rather substandard and will be sticking to my O10 fingers and 10b thumbs....

TCO!

[Dark Paladin]

[sarcasm]
See! Windows is a lot cheaper than Linux - I mean, look how much money you have to spend on it!

Hm? How much would it cost to do the same thing with Windows? That's not the point - look! Shiny object!
[/sarcasm]

don't need me anymore

[ToasterTester]

Well with that much money guess they don't need us writing free code anymore. They can afford to pay and spread the wealth.

Re:don't need me anymore

[unixbugs]

Hey now, dont start falling for it. If you really think about it, this could be a big wedge set up between the lone developer and the big community. The big guys waving fat wallets and the little guys waving bug fixes. The self-healing nature of the OSS community probably wont let that happen, but it woulndt hurt to be wary because it seems like a weak link in the chain that holds it all together.

Sure we dont get paid, but we do love what we do. The whole satisfaction bit comes from the sense of accomplishement and contribution to a greater good.

Besides, there is a big demand for linux pro's out there and nobody can fill a gap in a big company doing serious migration like the lone developer.

Cheer up!

TCO studies

[vlad_petric]

Believing TCO studies from Microsoft is like believing safety studies from medication manufacturers.

Oh, wait a sec ... I meant the other way around.

This is what happens...

[donnz]

...when communists go bad

Re:This is what happens...

[donnz]

the problem with irony is that when you have to explain it it's no longer irony. Ironic, huh...

Actual revenue for 2004 is $15 billion

[Animats]

More interesting is the actual value for 2004 - $15 billion.

That's a nice number, Note that in comparison, Microsoft's 2004 revenue is about $36 billion. Apple is around $10 billion.

Re:Actual revenue for 2004 is $15 billion

[Anonymous Coward]

fyi the 34b figure for 2008 and 15 for 2004 includes everything - like the price of the actual hardware, transactions run thru the system etc.

if you'd do this math for MS it would be a lot higher, ibm would most likely win with all the transactions in banks going over them

Re:Actual revenue for 2004 is $15 billion

[Animats]

True. Red Hat makes about $150 million per year. That's revenue. Profit is about $5 million per year. Which is not much, considering that Red Hat didn't have to pay for the development of Linux.

Re:Actual revenue for 2004 is $15 billion

[gregorio]

More interesting is the actual value for 2004 - $15 billion. That's a nice number, Note that in comparison, Microsoft's 2004 revenue is about $36 billion. Apple is around $10 billion.

The 15 billion figure is the *total* direct and indirect profits *related* to Linux. Including Hardware.

IDC 96% off

[bstadil]

You are quite right. These clowns predicted Itanium sales of $30B in 2001.

Why is anyone taking this seriously?

Kinda misleading

[Anonymous Coward]

They're counting money for hardware that would have been spent anyway, regardless of what OS is running on it. It's like a car company taking credit for $35 billion spent on gas. In the end, if I don't buy a Honda, I'll buy a Ford and spend money on the gas regardless.

The only credible argument is that less will be spent on hardware supporting Linux than would be spent supporting other operating systems. Perhaps, that's an arguable point. But even then, the cost difference would not be $35 billion.

Re:Kinda misleading

[808140]

In a way, I want to agree with you. But I'd like to point out where your Ford/Honda/gas analogy breaks down: interfaces.

You see, good hardware is very important in a purchase decision. However, hardware on its own is not particularly useful, nor does it sell particularly well -- you'll note that it's rather hard to purchase systems independant of an operating system.

While a Windows server and a GNU/Linux server may run on the same hardware, people are buying the servers running GNU/Linux, rather than the servers running Windows (or Solaris, or HP-UX, or whatever). In essence, GNU/Linux is important because it is probably driving these sales -- people are looking at GNU/Linux and saying, gee, I want to do XYZ with a computer, and a RH/SuSe/whatever server is the one for me. They aren't going to buy a GNU/Linux server and install Windows on it.

See, the problem with the Honda Ford analogy is that a car is just a car. They all have the same interface; the only selling point is the hardware. So if I buy a Ferrari, or a Honda, or whatever, I'm not making my purchase decision based on how to drive it -- all cars are driven the same way.

In computers, the opposite is (normally) true. Hardware is generally just hardware, it all essentially does the same sort of stuff (ie, manipulate integers and floats). The OS is what makes it useful, and even more, the software that runs on that OS. So while the OS may not generate the actual revenue, it is what drives the sale.

That's why it's important.

I see they discovered the secret formula!!

[Dano Watt]

You know, the three step program.

1) Distribute OS for free
2) ???
3) Profit!


All successful companies follow it, and so far, it hasn't failed yet.

In other news, beating dead horses has reached an all time high.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:and how much do the creators get

[jericho4.0]

Nobody starts developing in OSS for the money. And IBM might not be giving paycheck to every OS developer, but they are contributing tons of code, and that's the point.

Cash cow?

[daishin]

Its a cash penguin damnit!

Software Sells Hardware

[stankulp]

IBM said it first, but it's still true today.

You don't buy computer hardware because of its architecture. You buy it for the software it will run.

Linux runs just about any sort of application you could desire, it's free (as in speech, not as in beer), but businesses have to buy hardware and hire IT people to run it.

IBM used to give the software away for free to get people to buy the iron.

The more things change...

Wow, back on the 15th is was only 28 billion

[Anonymous Coward]

timothy post

How about some DISCUSSION on Linux related stocks? It seems the only serious player is IBM who markets both SUSE and RedHat. SUSE DB2 IBM power 720, whipped the pants off SUN recently in TP benchmarks. There has been speculation that Sun will make a play for either RedHat or Novell. Even though market caps of Novell and Redhat are similar, I doubt Sun's 6billion cash will be enough to buy Novell and S.M. won't give up more than cash. If Redhat folks don't have some decent takeover protection built in, they'd likely be the target if rumors are true.

"- IBM OpenPower Systems Combine with Novell's SUSE(R) LINUX Enterprise Server and DB2 Universal Database to Set World Records on TPC-H Performance Benchmark", read more.

Face it, Novell and RedHat are the only serious players and Novell has been playing the game a lot longer...

Wonder what you guys who are messing around in the stock market think of Linux opportunities for investors at this time?

Re:Wow, back on the 15th is was only 28 billion

[Builder]

Dell seem to make good money off of Linux as well, supporting both RHEL and SLES on their server lines and their N models of desktops.

Sun are in a bad place at the moment, and Solaris 10 x86 HAS to succeed for them to make it through the next 3 years. But they still sell a lot of Red Hat, despite their rants about it.

Red Hat have some problems. Their pricing is high for the service they deliver, their products are buggy or incomplete in many cases (config tools, etc.) and they're not great with release dates.

Novell have a good product in SLES, but they're an unknown in the Open Source world - we don't know how they will behave towards the community yet. Dell's recent endorsement may or may not make a difference there.

Overall, none of the big players are really doing anything interesting enough to bump stock prices at the moment. IBM are about the most visible to the financial corps, and they're doing a little bit of interesting stuff.

Lots of projects are "funded"

[diegocgteleline.es]

If you look at the kernel, pretty much all the core kernels are IBM/Redhat/Suse workers. GCC (which BSD users also use) have lots of redhat people in their lists. Lots of gnome hackers are paid to (project Utopia in Novell, Sun and Redhat, etc). Openoffice is not something that a couple of geeks can do in a weekend too. X.org has keith packards who did lots of work. KDE has several Suse/Mandrake/Lindows contributions. There're Freebsd hackers too, etc, etc etc..

OSs programmers probably won't see money, but instead companies hire people to work on their projects and they give you the code (lots of times those people are guys who were one of the main developers of the project and they got hired)
Which is fair. We give them our work, they got money, and they hire people to work on our projects and release the source of the modifications. We get better software, they get money.

Well, my point is, "is not true that they give absolutely nothing back". NTPL, good SMP support, latest improvements in the incoming GCC 4.0, Gnome usability, Gnome accesibility from the Sun guys, openoffice...there're LOTS of things that wouldn't have happened without those companies.

Re:Lots of projects are "funded"

[mibus]

Apple also pour effort into KHTML, for another example.

Re:*sigh* revenue is for the ignorant

[Omniscientist]

Well, since Linux is a free OS there may be a very high chance that the deductions from the income are not alot.

Or maybe not ?

[Anonymous Coward]

you sure ? http://www.novell.com/news/press/pressroom/news_br ief/archive/2004/suse_archive/response.html

Re:Oww the ironey!

[screenrc]

The vast majority of FOSS developers are only
agaist patents, the are not against copyrights.
Every time a developer adds a GPL license to
his work, or displays his name as the author,
he says to the world that "this is my work" . It
is not yours or ours, this software "belongs to me".
And the penalties are severe. Try ripping-out the
copyright notices from the source, or perhaps
change the name of author with yours. Nobody
will like you, nobody. In most cases, the developers are agaist sharing
the ownership of their work -- this is protected
through copyright.

Re:IMPORTANT: Firefox (luv hfis)

[Anonymous Coward]

I laugh at you all, Linux pussyboys.

I use CP/M, you insensitive clod!

I wonder....

[blair1q]

Do you think Linus Torvalds looks at that $35 billion valuation for Linux and thinks, "I wish I'd invented that..."

In real terms

[SuperBigGulp]

$35B as in Beer?