Microsoft Still Cleaning Up With Windows

SAN FRANCISCO -- Whether from Linux open-source technology or virtualization, many have predicted the demise of Microsoft's(MSFT - Cramer's Take - Stockpickr) traditional software business. So far the company that built its house on Windows isn't caving in to soothsayers.

The latest figures from consulting firms indicate that although Linux sales are growing by number of servers shipped with the operating system, the software is losing ground to Microsoft's Windows.

Microsoft picked up 2 percentage points, bringing its market share to 67.1% of servers shipped during the second quarter, according to data from Gartner. Of 2.06 million servers shipped overall, nearly 1.4 million came preloaded with proprietary OS. That works out to an extra 77,650 Microsoft-based servers sold during the quarter, year over year.

Linux accounted for 22.8% of server shipments, down from 23.1% the year before. In spite of the lost ground in market share, strong sales of servers created a bigger pie for the slight growth of commercial Linux.

According to IDC, Windows worldwide server revenue grew 18.7% to $5 billion in the second quarter. (Operating systems account for only a portion of that revenue.) The Microsoft OS gained 4 points of market share by revenue. Windows servers accounted for 38.2% of all revenue. Microsoft plans to release its Server 2008 early next year.

Compare those figures to $1.8 billion for Linux-based server revenue in the second quarter, which had 19% growth year over year, according to IDC. Linux servers now represent 13.6% of all server revenue.