South African research house, BMI-TechKnowledge, last week released its latest report on Linux and open source software (OSS) in the South African market, indicating that Linux is gaining market share locally, but not at the expense of Microsoft Windows.

This trend has been picked up by several market reports over the last two years, and the situation does not look set to change in the near term.

According to BMI-T analyst, Roy Blume, the source of attrition comes from a cross-section of other operating systems, such as Novell NetWare, OS/2 and Unix.

?In the packaged software scenario,? says Blume, ?Microsoft and Linux are showing steady growth, while the other players are showing a steady decline.?

BMI-T says that Linux has a major part to play in the future IT economy of SA, with Linux market share estimated to have grown from 0.5 percent in 2003 to around 2.8 percent in 2004.

On the question of how channel companies and integrators are going to make money out of something that is perceived as being low-cost or free, Blume says that there is a lot of money to be made in software services.

?This is estimated to grow at a compound annual growth rate (CAGR) of 42 percent,? he says.

But who to sue?

?What we are already seeing and are more likely to see in the future,? Blume adds, ?is that the major technical IT companies will build and stress-test a robust version of Linux and certain open source software for their clients.?

This adds an element of accountability to OSS, giving the client a direct path to support and problem resolution -- i.e. giving them somebody to sue in case something goes wrong.

These are still misconceptions about OSS and Linux that are hindering the mainstream adoption of these technologies at end-user level. Although vendors would disagree, end-users are still concerned with major vendor support for OSS and Linux, as well as the technologies? track record and perceived infrastructure incompatibilities.

But reduced costs and the perception of Linux and OSS as ?free? often leads companies to jump on the hype bandwagon, without evaluating the real business implications of deploying these technologies.

?Interesting to note,? says Blume, ?BMI-T?s adoption curve for OSS and Linux is very similar to that of Gartner?s back in 2003, showing that not a lot has changed in the last year or so.?

According to the two curves, OSS is just coming out of the hype cycle while Linux is already showing business value.

BMI-T also says that an interesting element of the ongoing OS debate is how Microsoft is dealing with the situation. The software giant seems to be bringing the war onto home ground, and going back to its core value propositions.

?If Microsoft wanted, it could commoditize its operating systems, undercut Linux purely on price, and make money out of business solutions. Never count Microsoft out,? states Blume.

The client/server market has matured nicely in SA now, and it is clear that Linux, OSS and Microsoft are making their way onto a level playing-field, where total cost of ownership, business value and applications dictate the technology being used.