H-P Will Need to Fight for Its Linux Lead

While H-P currently enjoys a sizeable lead in the business, the move to Linux also has a significant disadvantage. Sales of cheap Linux boxes are gradually supplanting sales of H-P's proprietary Unix servers. The same holds true for IBM, which now offers Linux on all its servers, from low-end all the way to mainframes.

"With a company like an IBM or H-P, they can benefit from Linux by selling Intel servers, but they're losing, to a certain extent, that sale from their Unix business," explains Cihra. "So they're trading higher-priced, higher-margin servers for lower-priced, lower-margin servers rather than lose to Dell."

Dell -- always the exception to the rule in the hardware business -- is the only player that doesn't see any downside from the move to Linux since it doesn't sell any proprietary systems. That helps to explain why its market share in Linux revenue grew nearly 8% year on year in the first quarter.

But while Dell claims the most momentum in Linux, IBM gets more attention because it's such a vocal backer of the move to Linux. A few years ago, notes Bill Claybrook of the Aberdeen Group, IBM pledged to invest $1 billion in Linux, plumbing the potential of areas like clustering and grid computing.

Big Blue's Linux Bet

Big Blue has woven Linux across all four of its server lines, from Intel-based boxes all the way up to mainframes. "Having Linux on all types of servers allows them to bring in more Web functionality," explains Jean Bozman, research vice president in the server group at IDC. "Some [developers] are writing to Linux, creating Linux applications. So if you support Linux on your servers, you're getting more applications for them."