Springboard Research notes a variety of factors that drive SMB’s in growth markets either towards, or away, from Linux. Though a significant proportion of adoption today remains server based, Linux adoption has the potential to impact the rest of the SMB market across the entire IT industry. We observe several key technical influencers that affect SMB decision-making, particularly in these high-growth markets.

In assessing the potential impact Linux may have among SMBs in growth markets – and the broader IT industry as a whole - it is important to first distinguish Open Source from Linux (refer "Open source and Linux: two different animals"). Linux may be the underpinning in many cases for a preference for open source applications, frameworks, tools and utilities. However, it is just one example of an open source solution.

Linux adoption in growth markets continues to increase, though not at a particularly rapid rate. Our research shows that, while the majority of SMB organisations have a strategic preference for Microsoft Windows-based server products, Linux continues to make inroads into the SMB-sized organisation. This is true regardless of region or industry (though some variances do exist).

When evaluating potential server platforms, SMB’s typically defer decisions to trusted third party advisors and/or suppliers. This influences decision making for platform selection. A significant influence in growth markets is the sheer weight of numbers – i.e., pervasive adoption drives more pervasive adoption (or said another way “success breeds success”). Where decision-making is clear and visible, we note the following major technical decision criteria:
 

• Integration/dependencies: Related to the issue of cost is the requirement to license a fairly large suite of products in order to gain access to more advanced functionality. The majority of SMB’s (specifically in growth markets) tend to rely on service partners and suppliers to provide “light” integration rather than being bound by the vendors “platform”.
• Development tools/utilities and extensibility: The cost to develop on proprietary platforms can make open source look much more attractive when the entire software development lifecycle is considered. Developers can gain instant, easy access to free open source developer tools that provide similar levels of functionality.
• More “progressive”: Linux can be seen as a much more leading edge platform. Easy integration with cloud computing services, for example, makes Linux quite attractive to developers.
• Open standards: Rightly or wrongly, SMB’s in growth markets tend to perceive Linux as being more likely to provide longer term value over proprietary applications/platforms. Often this is a theoretical barrier and our observation is that it rarely, if ever, really does sway decision making. Cost issues typically override the open standards issue.
• Trainability: In many growth markets, exposure to quite sophisticated tools can be a barrier to adoption. The training requirements involved can make more complex solutions look less attractive. For example, we tend to see more web based interfaces to applications in growth markets because of the simplicity and familiarity of the user interface and navigation controls.
• Stability: There is a fairly widespread belief in the developer community that Linux provides a more stable and robust platform. Even among SMBs in growth markets, this reliability is seen as valuable.
• Scalability: Linux is typically seen as more flexible and able to meet variable scalability needs. Linux can be easily configured to provide high degrees of scalability without additional server licensing investments for example.
• Reuse: Support and service companies, as well as SMB’s themselves, tend to view Linux as a more ‘reusable’ platform. That is, it can be reconfigured and repurposed for temporal or highly volatile business needs. This can be driven by service companies supporting a large number of clients and moving (either physical or virtual) machines around from customer to customer as their needs evolve.
• Performance and resource requirements: Existing and old equipment can generally be utilised more effectively with Linux distributions than proprietary platforms.
• Forced upgrade cycles: Linux has the perception of allowing users to decide whether, when and which new features they wish to upgrade at any time.
• Code efficiency: This is somewhat of a philosophical issue. However, Linux is often perceived as being more efficient and ‘elegant’. This also impacts the issue of performance and resource requirements listed above. Technical elegance can appeal to the integrity and values of the developer, service and support communities.
• Client independence: Linux is still (typically) more likely to be deployed as a server environment than in a desktop environment. Nonetheless, client independence is seen as more likely to be achieved in the Linux server environment than going down the proprietary platform route. While technically there is very little difference (if applications are architected correctly) the perception in the SMB market is generally that “Windows requires Windows”.

Note that the above list does not focus on the strengths of the Microsoft platform for SMB’s. There are obviously many reasons why Microsoft remains attractive for this market segment. Nonetheless, Springboard Research observes that, as SMB organisations in growth markets develop a keener interest in emerging hosted/SaaS solutions, the underlying platform argument will once again become part of the technology platform decision criteria – and that Linux will continue to be seen as a credible and viable option.

Moreover, the volume of potential users for hosted and SaaS based solutions in growth markets brings an economy of scale argument that is hard to ignore. There are many other factors at play as well, such as the adoption of Linux in the hosted application service provider market. However, more broadly speaking, Linux is likely to have a chronic (rather than acute) effect within SMBs in growth economies.