Sometimes you need to hit rock bottom before you can get the help you need. IDC acted as an “interventionist” today publishing a new report showing how open source is growing in the down economy.

The study released today shows, “worldwide revenue from open source software will grow at a 22.4% compound annual growth rate (CAGR) to reach $8.1 billion by 2013. This forecast is considerably higher than 2008 for three reasons: (1) the bottom-up list used to calculate the revenue has expanded through an exhaustive effort to include more projects in this forecast; (2) open source software has had a much higher level of acceptance over the past 12 months than previously expected, and; (3) the economy accelerated the uptake and use of open source software in the closing months of 2008.”

Economic crisis tend to clarify people’s thinking and accentuate existing trends in the market place. This is no exception. The IDC report underscores the fact that open source provides real value for the money and it took a recession for people to figure that out. For a world addicted to high priced proprietary software this may have been the bottom that will transition the enterprise IT industry to one of shared innovation, true value for the money, and higher levels of service.

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Linux has a strong history of deployments in government agencies around the globe and has helped drive the adoption of open source applications in government in recent years. But, we have a long, winding road in front of us. Research firm Gartner predicts that only 25% of government vertical, domain-specific applications will either be open source or contain software developed by a community by 2011.

Some may see this as a victory, but I see it as not good enough. The members of the organization announced today, Open Source for America, agree. We see it as an opportunity to educate government on open source software while effecting change in policy and coordinating collaboration on requirements specific to government.

Linux is a perfect example of how open source moves its way up through the ranks of business and government. Federal agencies will to see that Linux has already proven extremely effective. Consider one of the earliest examples of Linux in government - - as early as 1995, a small suburb in Orange County moved its municipal computer system to Linux. Today, Orange County is home to an active Linux User Groups (LUGs). Fourteen years later and after a hundreds of government Linux deployments, the United States Postal Service this month said it is moving 1300 servers used for its tracking package system to Linux. And, the agency said that this migration is part of a larger one intended to standardize on open source software to lower operating costs and increase the number of transactions the system can handle – that’s increasing on 40 million transactions a day.

We have an opportunity now to move Linux and open source closer to a tipping point in government. With a federal administration voicing its support and commitment to reducing costs and enabling better IT infrastructure across healthcare, defense and other major sectors, the time is right for a collective voice that can educate Washington policy makers about these critical technologies.

A more cost effective and open government is something everyone can agree is good for our country. These are the principles open source has been putting into practice for years. The Linux Foundation looks forward to working with Open Source in America to educate Washington on the value of open source.

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Most of you have seen the news today from Google formally announcing their Chrome Operating System for netbooks using Intel x86 and ARM chips. The is painted as a classic “clash of the titans” between Google and Microsoft, with Google finally directly assaulting Microsoft’s top cash business. (They have already opened the war against Microsoft’s other cash cow, Office, with Google Docs.) While this is a great story, I prefer to frame at as David vs Goliath with the little OS that could, Linux, as the foundation of this announcement, as well as the other operating systems challenging Windows.

What does this announcement mean to the computing industry?

Microsoft’s pricing model is not sustainable in the new world of PC/mobile convergence. MSFT as it existed for the past 20 years does not fit into a world of free carrier-backed netbooks and an internet OS. It’s been reported that Windows 7 Starter will be priced around $45 - $55. In a $200 netbook with already razor thin margins that pricing doesn’t work. And it certainly doesn’t work in the world of free PCs subsidized through carrier subscriptions. When PC makers threaten to use another operating system if they don’t get Windows 7 at a lower price they will not be bluffing; Google Chrome, Moblin, and desktop Linux will be free. Microsoft is not blind to this - but it is questionable if their recent moves towards services will happen soon enough.

The new PC model is built around services: Google ads, online music/video/TV services, subscriptions to applications built and run from the cloud. The old world of high margin operating systems and desktop applications is simply not very relevant to this new world. Native applications unique to an OS are just also not very relevant any more. Even such workhorses as personal finance and digital photo applications have moved to the browser, and those apps are available on any OS. Even Microsoft shut down their Microsoft Money product which was built under the old software sales model. Google wants to capitalize on this trend with Google Chrome OS and its own bevy of online services.

Linux (and consumers) are the true winners. Linux is the basis for not only the new Chrome OS but also the other challengers to Microsoft’s desktop monopoly such as Moblin, Nokia’s Maemo, Palm Pre, many versions of desktop Linux such as Ubuntu or Suse, Android and more. (It’s also the basis of all of Google’s application services as well as every major cloud offering.) Linux is the foundation for this new wave of computing because it is available on more architectures and supports more devices than any other OS. (By using the Linux kernel Google Chrome gains the advantage of all of the hardware drivers.) Linux also gives PC makers and mobile carriers the flexibility to use it without onerous pricing and branding restrictions. The more companies and manufacturers base their products on Linux, the stronger Linux becomes. Say goodbye to monopoly pricing.

There are more questions raised by this announcement than answers, but I feel the three points above are clearly strengthened by this news. We look forward to seeing Google collaborate closely with the Linux community and industry to enhance Linux as the foundation for this new computing model.

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