Singapore, February 16, 2001 - The Linux server market will be worth US$470 million in 2004 as a result of a 57 percent CAGR in revenue terms since 1999, according to IDC's recently published report titled "Asia/Pacific Linux Server Market Overview". The size of the Linux server market in Asia/Pacific was 10,000 units in 1999 and grew to almost 12,000 units by 1H 2000. With a 58 percent CAGR (Compounded Annual Growth Rate), Linux server shipments will cross the 100,000 shipments mark in 2004. Internet infrastructure expansion and the dot.com boom have been primarily responsible for driving the demand for Linux servers in the region. Growing penetration in the education segment, strong government support to the open source movement - particularly in Korea and the PRC - and a large installed base of Unix users were some of the other factors catalyzing the Linux demand in Asia/Pacific.

"Linux based servers may not be a substantial revenue generating opportunity at this point in time but they will be of strategic importance for every major server vendor moving forward" said Rajnish Arora, Manager, Servers and Workstations research at IDC A/P. "Vendors must carefully assess the market opportunity for Linux because initial adopters have not been attracted by the free distribution model of the operating system"

Despite the slowdown caused by the dot.com bubble burst, demand for Linux server will remain strong due to the massive Internet infrastructure build out potential of the traditional brick and mortar businesses, the growing penetration of Linux in the SME segment, and the strong demand for appliance servers.. The study observed that while most major server vendors have announced their strategic decision to participate in the Linux market at the worldwide level, they have not done enough to tap the market opportunities at the country and at the regional level in Asia/Pacific. Among the server vendors, Compaq was the dominant Linux server vendor in Asia/Pacific (ex. Japan) with 21 percent unit shipment and 25 percent revenue share in 1999. IBM and Hewlett-Packard were -ranked second and the third with 18 percent and 12 percent unit shipment shares respectively. Pure Linux solution providers such as LinuxOne and LinuxKorea emerged as strong players in the Korean market.

IDC's survey polled a total of 51 major ISPs in Australia, India, Hong Kong, Korea, Malaysia, the PRC and Singapore to better understand their current usage and future adoption plans for Linux. The survey showed that 73 percent of the ISPs have deployed Linux in their server infrastructure, and are using either a paid or a downloaded version of Red Hat Linux. Red Hat was by far the most popular Linux distributor in the Asia/Pacific region. On the application front, Web serving, email, and Internet/ Intranet were among the most widely deployed applications on the Linux servers by ISPs. Moreover, ISPs cited "Price/ performance" and "Cost" as the most important reasons for deploying Linux. However, lack of Linux skills and service and support availability are the key factors that are holding back 20 percent of ISPs from deploying Linux in the next 12 months.

Results from IDC survey showed that Australia was the largest Linux server market in the Asia/Pacific region accounting for almost 25 percent of the total unit shipments in 1999. Korea jumped from the number three position in 1999 to the number one position in 1H 2000 in the Asia/Pacific Linux server market with 32.6 percent unit shipment share. In revenue terms, Korea led the regional Linux server market in 1999 and 1H 2000. Linux accounted for only 1 percent of the total SIAS shipments in Singapore in 1999 and a little more than 2 percent in 1H 2000.

Definitions
Linux Servers Market
Linux servers include paid Linux copies bundled with the new SIAS servers shipped in each market. Here the specific payment concerning the Linux software could at times be included within the cost of the server or its support. Linux server shipments include factory configured, channel configured, and bundled operating system (OS) server shipments.

SIAS
"A system, designed and marketed as a server, built around Intel architecture processors running on a generic industry standard chipset. At present these systems are available in uniprocessor and 2, 4 and 8 way SMP architectures. In future these systems may run on greater than 8 way architectures. Systems based on Intel compatible processors, such as those from AMD and VIA are included in this category". These systems continue to be captured in IDC's Entry Server Market (Servers priced at less than $99,999)
((Note: The definition is specific about the term "Standard" to mean technology which is not heavily dependent on additional proprietary technology to create a "Standard Intel Architecture Server". Servers that have been scaled above the current 8-way systems may be deemed Intel Architecture Servers but not "Standard")

Copyright IDC, 2000. Unauthorized use is strictly forbidden.

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.
IDC is a division of IDG, the world's leading IT media, research and exposition company.

For more information about the research, please contact Rajnish Arora at IDC Singapore; 65-3350715, rarora@idcap.com or Avneesh Saxena at IDC Hong Kong; 852-29054223, asaxena@idcap.com. To purchase IDC's "Asia/Pacific Linux Server Market Overview", please contact Sharon Yeo at IDC Singapore;. 65-3350761,syeo@idcap.com.

Rajnish Arora
Manager - Servers and Workstations Research
(65) 335-0715
rarora@idcap.com

Mike Wong
Manager, Marketing
Phone: 65-335-0731
Email: mwong@idcap.com

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