Linux is anti-establishment (read anti-Microsoft); it is complex; it hardly offers a viable revenue model: India Inc has always harbored prejudices against  Linux and open source software in general. In FY 2005-06, corporates and SMBs brushed them aside and ported many of their mission-critical applications to the Linux platform.

This was a watershed year in the history of open source movement, particularly Linux, in India. This was not only because of large-scale enterprise deployments across many verticals, but also because Indian enterprise users seemed to finally comprehend the nuances of a subscription-based software adoption model. Translate this into figures and the overall Indian Linux market gets pegged at Rs 144 crore; Linux OS distribution revenue comprised around Rs 18 crore out of this, while the rest consisted of support, training, services, consulting and other revenue streams built around the Linux ecosystem. Indian enterprises also finally seemed to realize that open source did not mean only Linux; it included the source code of any software in the public domain.

Red Hat was undoubtedly the giant in the Linux space garnering 95% share of the pie, while the rest was contributed mainly by Novell (with SuSe Linux), and a few other distributions like Ubuntu, Mandriva, Debian, PCLinuxOS and Knoppix. There was a Rs 500 crore market around Linux, involving pockets of high utilization, like high-performance computing, blade servers, data centers and application and workgroup deployments. Vendors like IBM, Oracle, HP and Sun had substantial revenue streams based on Linux and other open source applications, though it was difficult to segregate these numbers because of their reticence.

Government Adopts Linux
The government sector was one of the key drivers for Linux adoption in the country during 2005-06. Though there was no official mandate on Linux usage, the Union Government as well as several state governments still found it a perfect fit for their e-Governance initiatives, from the cost as well as strategic perspectives. And, considering the sops offered by Microsoft to many of the state governments, this constitutes a major victory for the Linux brigade.

The governments of seven states, Maharashtra, MP, AP, West Bengal, Chhattisgarh, UP and Uttaranchal run their treasury applications on Linux. The Provident Fund application of Bihar, the Secretariat in Mizoram, the Stamp Duty application in AP, the Land Record application of Maharashtra, the RTOs of all the North Eastern states-Linux found several takers. The innovative ePost project of the P&T department, the IndiaGov portal and various  applications of the Election Commission, Ministry of Health, Ministry of Labor and Ministry of External Affairs are now all on Linux.

Localization of Linux was one major factor behind this success. Not only was it localized into five languages-Hindi, Bangla, Gujarati, Tamil and Punjabi, applications were also rolled out for government in local languages. This year, there are plans to introduce it in eight more languages. Also, the fact that India is primarily a Unix market with many legacy applications residing on Unix acted as a catalyst for migration to Linux. Even the defense sector witnessed widespread adoption of Linux; in fact, the government and defense combined accounted for 38% of the Linux market during FY 2005-06.

Enterprises Lapped it Up Too
The Indian enterprises across verticals witnessed widespread deployment of Linux during the year. BFSI accounted for 30% of the Linux market, telecom 15%, while manufacturing, retail, BPO and SMBs contributed the remaining 17%.

Linux found acceptance amongst telecom operators too, most notably Bharti and BSNL in circles like AP. Airtel's entire caller ringback server is on Linux. The server that received all the SMSs for KBC was on Linux too. Eveready built a mission-critical resource system to automate all functionalities of its daily business using the Oracle e-biz suite running on Linux. The Supreme Court, lower courts in Maharashtra, IRCTC, 6,000 schools in UP and 2,000 in MP also followed suit.

As a technology, Linux changed the revenue model of the software industry by successfully evangelizing the concept of subscription model. An alternative to a licensing regime-based revenue stream, it lowered costs; and companies like Red Hat and Novell made revenues through services and support.

Linux is Red Hat
Red Hat monopolized the Linux market globally, and especially in India. Not only did it enjoy 95% of the market share in absolute revenue terms, it also dominated the actual mindshare. In fact, India was the company's largest market in the entire Asia-Pacific, second only after Japan. Red Hat  focused on creating an entire Linux ecosystem in FY 2005-06: it worked with 10 SIs including Wipro, HCL, CMC, TCS and PCS amongst others; it appointed four distributors viz., Ingram Micro, Integra, Sonata and GT Enterprises, and 35 channel partners; it also signed 60 ISVs who ported different applications on the Red Hat Enterprise Linux  platform.

There was an increased focus on desktops. Red Hat established strong OEM relations with the likes of Intel, HCL and Wipro. With Linux for desktops costing only Rs 1,950 and offering relatively better security against viruses, Linux desktops found acceptance in large organizations like LIC. Buoyed by the global acquisitions of companies like Systima during the year, Red Hat strengthened the overall open source market by making these proprietary technologies open source. While continuing with its existing Fedora program, Red Hat also started with layered products. This successfully countered Novell's positioning itself as an end-to-end solution provider on open source platform.

Meanwhile, Novell failed to tap the open source wave in India as was expected after the SuSe acquisition. It, however, attempted leveraging open source by positioning itself as a total infrastructure vendor: SuSe Linux offering for servers and desktops, regulatory compliances to drive its identity management solutions, ZenWorks to offer resource management, GroupWise to provide collaboration with Netware remaining the networking OS. All these were delivered on an open source platform-a crucial ingredient for Novell to catch up with Red Hat in India. It had to overhaul its distribution network-under its Partner Net program Novell signed up SIs like Wipro, HCL, Allied Digital and Value Point, besides adding more than 80 channel partners.

Rajneesh De
rajneeshd@cybermedia.co.in

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