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Reflections on Open Source Commerce, Part 2 - page 4

The Story Thus Far

  • May 16, 2008
  • By John Terpstra

This is a good point to reflect on the assertions and questions raised so far by examining some market statistics. The following are an update on what was provided in the Yin and Yang article.

Table 1 presents a summary of US Bureau of Census information showing the distribution of businesses by number of employees. The growth of the US work force between 2002 and 2005 was 3.48%, the number of large businesses ( more than 500 employees) grew by 3.75%, the total number of firms grew by 5%.

Table 1: US Business Distribution by Size�1988, 2002 and 2005
YEAR DATA TYPE TOTAL Number of Employees
<20 20-99 100-499 >500
1988 � � Firms 4,954,645 4,444,463 430,640 66,708 12,824
Establishments 6,016,367 4,516,707 581,622 244,697 673,341
Employment 87,844,303 18,319,642 16,833,702 12,761,379 39,929,580
2002 � � Firms 5,697,759 5,090,331 508,249 82,334 16,845
Establishments 7,200,770 5,147,526 692,775 332,508 1,027,961
Employment 112,400,654 20,583,371 19,874,069 15,908,852 56,034,362
2005 � � Firms 5,983,546 5,357,887 520,897 87,285 17,477
Establishments 7,499,702 5,409,151 679,382 331,999 1,079,170
Employment 116,317,003 21,289,196 20,444,349 16,911,040 57,672,418
Source: http://www.census.gov/

In the Yin and Yang article world GDP was used to factor US businesses demographics to arrive at a world business and server usage estimate. Table 2 provides the most recently published GDP information. A column was added to report the ratio of area GDP to the global GDP. The factor for the US economic GDP contribution has remained almost static, while other countries show marked changes. These figures imply contrary to expectation that Indias' contribution to GDP declined over the past three years. It might be an interesting exercise to explore what the cause may be and to what extent this may bias the assumptions made in Table 3.

Table 2: Global GDP for 2007 (Est)
AREA 2004 2007 Estimates
US$ Billion Percent Global Factor US$ Billion Percent Global Factor
Total 55,500 65,820
US 11,800 21.26% 4.7 13,860 21.06% 4.7
EU 11,700 21.08% 4.7 14,450 21.95% 4.6
China 7,260 13.08% 7.6 7,043 10.70% 9.3
Japan 3,750 6.76% 14.8 4,417 6.71% 14.9
India 3,320 5.98% 16.7 2,965 4.50% 22.2
Rest of World 17,670 31.84% 3.1 23,085 35.07% 2.9
Source: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

Table 3: The Global Server Market
Company Size Employees per
Company
Average Users/
Server
US Number (2002) Global Factor Global Number # Servers % of
Total
Servers
% of Companies
>500 3,326 45 16,845 3.0 50,535 3,735,098 7.20% 0.19%
100-499 193 10 82,334 4.0 329,336 6,356,185 12.25% 1.23%
20-99 39 10 508,249 5.0 2,541,245 9,910,856 19.10% 9.47%
<20 4 3 5,090,331 4.7 23,924,556 31,899,408 61.46% 89.12%
2002 Total 5,697,759 4.7 26,845,672 51,901,546 100.00% 100.00%
Company Size Employees per
Company
Average Users/
Server
US Number (2005) Global Factor Global Number # Servers % of
Total
Servers
% of Companies
>500 3,300 45 17,477 3.0 52,431 3,844,940 7.07% 0.19%
100-499 194 10 87,285 4.0 349,140 6,773,316 12.46% 1.24%
20-99 39 10 520,897 5.0 2,604,485 10,157,492 18.69% 9.24%
<20 4 3 5,357,887 4.7 25,182,069 33,576,092 61.78% 89.34%
2005 Total 5,983,546 4.7 28,188,125 54,351,839 100.00% 100.00%

From Tables 1 and 2 has been derived an estimate of the number of servers that are used in global infrastructure computing. The findings previously reported for 2002 are shown together with the 2005 numbers in Table 3. The average factor shown in the total line equals that shown for the US in Table 2. As was done previously, it has been assumed that compared with global business size distribution, the US has a disproportionate number of large (more than 500 employee and 100-499 employee) businesses, so the factor is therefore lower in this area. It is therefore also assumed that the global ratio of 20-99 employment businesses is lower in the US than elsewhere, thus the factor for that was increased to compensate. Based on the assumptions shown, the total number of infrastructure computing servers has grown from 51.9 million to 54.4 million over three years. It is left as an exercise for others to confirm or dispute these estimates.

Between 2004 and 2008 it has been estimated that world internet usage has grown from 974 million users to 1.355 billion. The indicated growth rate calculates at approximately 8% compound growth per year. The usage growth column in Table 4 shows that most internet usage growth has taken place outside of the US.

Table 4: World Internet Usage Statistics
World Regions

Population (2008 Est.) (Million)

Population % of World Internet Usage, Latest Data (Million) % Population (Penetration ) World Users % Usage Growth 2000-2008
Africa 955 14.3% 45 4.7% 3.3% 903.9%
Asia 3,776 56.6% 512 13.6% 37.8% 348.1%
Europe 800 12.0% 374 46.8% 27.6% 256.1%
Middle East 197 3.0% 34 17.0% 2.5% 923.7%
North America 337 5.1% 243 72.2% 18.0% 125.2%
Latin America / Caribbean 576 8.6% 127 22.1% 9.4% 603.4%
Oceania / Australia 34 0.5% 19 56.5% 1.4% 151.6%
WORLD TOTAL 6,676 100.0% 1,355 20.3% 100.0% 275.4%
Source: http://www.internetworldstats.com/stats.htm

The Netcraft web server survey reported that on October 24, 2005, there were 74.4 million publicly accessible web servers globally. The April 2008 report claims that responses have been received from 165.7 million web servers. This is a significant growth in the number of web sites that are being hosted, however one needs to be careful not to conclude that this parallels the number of physical servers in use. Growth estimates for these are best obtained from IDC server shipment statistics.

It is clear from the world internet usage statistics that there is a significant rate of growth of potential desktop systems users. The growth rate in this area far exceeds the rate of growth of the installed server market and is therefore of primary interest as a means of gaining increased Linux adoption.

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