Microsoft sees Windows gaining server market share
SEATTLE (Reuters) - Microsoft Corp's (MSFT.O) Windows operating system for powerful computer servers will continue to take market share from rivals Linux and Unix, the company's server and tools division head said on Wednesday.
The division has room for growth even in a slow U.S. economy, said Bob Muglia, senior vice president at Microsoft's server and tools business.
The launch of Windows Server 2008, an upgrade of its system for running major business computers, will help Microsoft extend a trend of taking market share from upstart Linux and long-time competitor Unix, he said.
"In the last six months, we have seen (market share gains) accelerate," Muglia said in a phone interview during a launch event for Windows Server 2008. "We do see that continuing."
According to research firm Gartner, the Windows share of global server shipments gained a percentage point to 66.8 percent in 2007 from a year earlier. Open-source Linux's share fell by a percentage point to 23.2 percent last year and Unix dropped to 6.8 percent in 2007 from 8.1 percent in 2006.
Microsoft has benefited, according to Forrester analyst Chris Voce, by improving its offering for servers used to host Web sites. Many developers had opted for a software bundle based of open-source offerings such as Linux, Apache Web server and Sun Microsystems Inc's (JAVA.O) MySQL database management.
Windows Server 2008, the successor to Windows Server 2003, is the headline product of an upgrade cycle at Microsoft's server and tools division, a unit that has posted revenue growth of more than 10 percent in 22 straight quarters.
Later this year, Microsoft plans to introduce the latest version of its SQL Server database software.
The $11.2 billion server and tools division accounts for more than 20 percent of Microsoft's revenue and profit and is its biggest business aside from Office and Windows.
Muglia, a 20-year Microsoft veteran who runs the division and reports to CEO Steve Ballmer, shrugged off the possible negative impact from a U.S. technology spending slowdown, saying about 60 percent of division sales come from overseas.
In markets like Russia, China and India, demand is strong, Muglia said. Furthermore, Microsoft only accounts for a fraction of the $80 billion global server and tools market, providing the company with ample growth opportunity.
"Overall, we continue to see strong growth," Muglia said.
SERVICES, VIRTUALIZATION
Asked about potential clouds on the horizon, Muglia said a proliferation of Web-based services could mean corporate customers would need less server software from Microsoft or others because they would not run their own data centers.
Muglia said Microsoft is making "substantive" investments in this area and is already working on its own services that will host a customer's messaging or e-mail systems or host software that helps workers collaborate on projects. Continued...
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