|Linux Market Share in Revenues|
|Company||Q1-2003 % share||Q1-2002 % share||% Change in share|
|Source: IDC, May 2003. |
* H-P is the combined results of Compaq and Hewlett-Packard in Q1 2002.
H-P ( HPQ) cranks out more sales from Linux hardware than anybody else -- a prized claim to one of the few hot spots of a sluggish server market. The big question going forward is whether that lead can hold up amid fierce ankle-biting from Dell ( DELL), a powerhouse in commodity servers, and IBM ( IBM), with its deep pockets and massive research investment in Linux. It's a strategic question worth asking given Linux sales jumped 35% in the first quarter, while the overall server market slumped nearly 4%, according to IDC. Faced with tight budgets, more corporate hardware buyers are choosing Linux, the so-called open source operating system that typically runs on Intel ( INTC)-based hardware, over the conventional Unix systems running on proprietary hardware from IBM or H-P. Though the latest results show H-P held the top spot in Linux revenues by a comfortable margin, it's seen its portion of the pie shrink over the last year -- mostly because after its merger with Compaq, it shuttered the H-P line of servers and kept only the Compaq line. Meanwhile, both Dell and IBM upped their share of the Linux market.
To be sure, some analysts caution against reading too much into the latest share numbers. "I think it's too early to say H-P's squeezed by IBM and Dell," says Robert Cihra, an analyst at Fulcrum Global Partners. Though H-P has been losing share to Dell, that partly reflects the fact that Compaq had a big chunk of the market to lose, having pretty much invented the Intel-based server over a decade ago, he says. "I think H-P has a good shot of really benefiting from Linux because H-P via Compaq is such a big name in Intel servers," Cihra concludes. Fulcrum does no banking. More than 90% of unit shipments of Linux are based on Intel platforms, according to IDC.