HP Sets Record With $2.5B in Linux-Based Revenue

By Peter Galli  |  Posted 2004-01-15

HP Sets Record With $2.5B in Linux-Based Revenue

Hewlett-Packard Co. on Thursday will announce that it earned a record-breaking $2.5 billion Linux-based revenue in fiscal 2003, with its Linux services and solutions business posting a 40 percent rise over fiscal 2002.

While the revenue was derived from the sale of Linux-related products and services, the Palo Alto, Calif., company did not specify exactly what was included and counted as Linux-based revenue.

HPs Linux-based revenue announcement followed IBMs announcement last January, first reported by eWEEK, and before LinuxWorld 2002 in New York, that it had made more than $1 billion in revenue from sales of Linux-based software, hardware and services in 2002.

Not to be outdone, HP countered a day later that it had earned some $2 billion in Linux-related income in 2002.

When asked by eWEEK earlier this week if IBM intended to break out its Linux revenue figures for 2003, Scott Handy, a Linux vice president for Big Blue in Somers, N.Y., said that was not currently on the cards.

"We dont generally break out specific product revenue figures and last years move was probably a once-off move. The Linux industry has matured so much over the past year that I think we have moved beyond the need for us to all roll out those specific figures," he said.

Martin Fink, vice president of Linux at HP, also pointed out in a statement released to eWEEK late Wednesday night that HP was the first major Linux vendor to initiate a Linux Indemnity program for its customers.

eWEEK first reported this week that Novell Inc. is following suit and will be indemnifying its SuSE Enterprise Linux 8 customers under certain conditions.

Fink also said that International Data Corp.s third-quarter server tracker survey for 2003 found that HP held the No. 1 position in the rapidly expanding Linux server market, with 28.1 percent of Linux server factory revenue worldwide.

HPs ProLiant servers led the market for Linux x86/IA-32 server unit shipments with 27.4 percent of worldwide market share over the same period, according to the IDC survey. The HP Itanium-based Linux servers led the market for EPIC-based Linux server unit shipments with 66.7 percent of worldwide market share. The size of the Linux server market for this period was $743 million in revenue, according to IDC.

Next page: IDC: Linux server sales on upward spiral.

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Jean Bozman, research vice president for IDCs worldwide server group, said in a statement that Linux server revenues and unit shipments have accelerated in recent quarters, with Linux servers posting a 49.8 percent growth in revenue for the third quarter of 2003 compared with the second quarter.

HP will also announce on Thursday new enterprise customers like Video Monitoring Systems, which is running HP ProLiant servers for its always-on environment. That Linux solution was "substantially less expensive than the Sun Solaris platform and delivered higher quality and far better performance than the Dell systems we previously used in our infrastructure," said Gerry Louw, chief information officer at VMS.

In addition, HP will unveil several new Linux reference architectures, including commercial Linux reference architectures based on Oracle Database/9iRAC and BEA WebLogic Server and an open-source reference infrastructure architecture based on open-source software from MySQL, JBoss, Apache and OpenLDAP.

The Linux reference architectures are being deployed on industry-standard HP ProLiant servers and will be deployed later on HP Integrity servers. "These solutions are tailored to enterprise customers migrating from Solaris, AIX and Tru64 to save them time and money," Fink said.

HP will also announce updates to its Linux notebooks. The new HP Compaq t5300 and t5500 thin clients, priced at $299 and $349, respectively, feature Transmeta central processing units and high-resolution ATI Rage XC video. They come standard with a three-year limited hardware warranty, the company said.

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