Frost & Sullivan releases the '2023 China Server Operating System Industry Market research report'

The broad definition of an operating system is a set of system software programs, primarily responsible for managing and scheduling computer hardware and software resources, and providing interfaces to users. Network servers are one of the main core scenarios for operating systems today. In the vendor ecosystem, closed-source operating systems are represented by Windows Server, while open-source operating systems mainly include various ones based on the Linux Kernel. Among them, the local openEuler-based vendors are rapidly emerging.

Supporting diverse computing power has become a common requirement for operating systems, and the integration of cloud, management, edge, and endpoint digital scenarios is essential. The concept of one chip with one operating system, one scenario with one software chimney, is no longer suitable. An operating system needs to support both X86, ARM, and RISC-V, and it must be able to handle multiple instruction sets. It is necessary for the operating system to achieve diverse computing power and full-scenario support, ensuring seamless collaboration across all digital scenarios.

With the acceleration of global digital transformation, the digital economy has become a core issue in China's current economic development. New infrastructure is an important engine driving China into the 'Digital Economy Era'. On one hand, the continuous construction of emerging infrastructure represented by 5G and intelligent computing centers continues to drive the growth in demand for servers and server operating systems in China. On the other hand, with the rapid growth of the information innovation industry under national policy guidance, server operating systems, as core basic software, are strategic fortresses in the field of information innovation, enjoying a favorable policy development environment.

Domestic application software has developed rapidly in recent years, but basic software such as underlying service operating systems has not yet formed a good ecosystem. Whether it is open-source or proprietary software, the root technology still cannot be independently controlled, and the external dependence remains high. International instability factors are increasing day by day, making it of great significance to enhance the independent control over server operating system root technology. Otherwise, sudden 'chain-breaking' events could affect the social and economic development process.

CentOS has ceased maintenance, and user migration is a foregone conclusion. The domestic open-source operating system community has encountered an excellent development opportunity. Red Hat's official stance on ceasing maintenance is to adapt to the fast pace of community development, build mechanisms that are easy to contribute to and integrate with, meet various needs such as stable applications, secondary development, and scenario-based development, and integrate all communities into an ecosystem that promotes each other. Although Red Hat has announced that enterprises can use the CentOS Stream system for free, users from sectors such as government, finance, and telecommunications with extremely high requirements for stability will still migrate to new server operating systems that can meet their needs, creating a huge market space for domestic server operating system manufacturers that rely on domestic open-source communities such as openEuler.

In the server operating system vendor ecosystem, systems are categorized into open-source and closed-source based on whether their code is public. Open-source systems are usually provided free of charge to developers and are widely popular among users due to their advantages in security, flexibility, innovation, and supportiveness.In addition to open-source communities based overseas such as Fedora, RHEL (Red Hat Enterprise Linux), and SUSE, the local openEuler community is rapidly emerging.

The openEuler open-source community, built on Huawei's more than 10 years of technical accumulation, is the foundational technology for China's domestically developed and independently evolved, diverse computing power optimized operating system. Since contributing to the OpenAtom open-source foundation in 2021, it has developed rapidly with high acceptance in the Chinese market. It has built a complete set of capabilities and continues to evolve. As an operating system for digital infrastructure, openEuler is currently widely used in industries vital to national economy and people's livelihoods, including government, telecommunications, finance, and other sectors. The Euler technology roadmap supports application scenarios such as servers, cloud computing, edge computing, and embedded systems through industry collaboration, building a complete Euler full-stack ecosystem. Under the trend of China's server operating system leading innovation, it has become the preferred choice for users. At the same time, the openEuler community, as an open-source organization built on co-construction, sharing, and co-governance, originated from China's integration into the global community. Its initial appearance at the world's top open-source summit held in Europe sparked enthusiastic attention from overseas developers.

The continuous development of China's digital economy has driven a sustained increase in the installed base of server operating systems. In 2022, the installed base of server operating systems in China reached 4.012 million sets, a year-on-year increase of 13.9% compared to 3.523 million sets in 2021. Looking at the changes in the installed base market share from 2021 to 2022, openEuler-based server operating systems have performed very impressively, with their market share rising from 15.1% in 2021 to 25.7%, a year-on-year increase of about 70%. This is far higher than the industry's average annual growth rate and has crossed an ecological inflection point, establishing an Euler full-stack ecosystem.

Since 2020, openEuler products have achieved remarkable results in the Chinese market, with the annual total installed base increasing from 35,000 units in 2020 to 1.033 million units in 2022.As a leading open-source community in the development of server operating systems in China, openEuler has installed and used one million units in industries such as national economy and people's livelihood. It has become the top choice for many customers in government, telecommunications, finance, and other fields, serving as the backbone supporting the rise of domestic server operating systems.Looking at the installation data of each sub-sector in 2022, the government, telecommunications, and finance sectors are the main sources of openEuler system installations. The government sector accounts for the highest proportion, at 31.7%.Secondly, telecom entities account for 19.2% of the installed base; financial entities account for 11.1%. The total installed base in the key infrastructure sectors of these three major areas can account for 62% of the total installed base in China's openEuler-based products market in 2022. Other sectors include internet, energy, healthcare, education, manufacturing, etc. The high share of openEuler-based products in these three major areas is not only an affirmation of the community's meticulous efforts but also a testament to the vigorous development of domestic basic software within these sectors.

In the government sector:In 2022, the installation volume of openEuler-based server operating system products grew rapidly, totaling about 327,000 sets, a 61.6% increase compared to 2021's 202,000 sets; the market share of openEuler-based products reached 50.3%, firmly ranking first; among the new installations in 2022, 64.3% were commercial versions, with openEuler-based products accounting for 66.5% of the total commercial installations in the government sector. The steady progress of digitalization has directly driven a rapid growth in the demand for basic software and hardware in the government sector. With the government's high emphasis on security, autonomy, and controllability, as well as a strong demand for highly responsive external support teams, openEuler-based products, as an outstanding representative of domestic server operating systems, have become a key selection.

In the telecommunications field:In 2022, the total installed base of openEuler products in the Chinese market was about 198,000 sets, achieving a growth rate of 57.1%. The market share of openEuler products reached 40.6%, firmly ranking first. The installed base share of the commercial version service operating system was 41.3%. The installed base share of openEuler commercial versions in the telecommunications field is relatively low, accounting for only 23.8%. This is mainly because most telecommunications enterprises build their own versions based on openEuler community editions through internal technical teams.

In the financial sector:In 2022, openEuler's installed base in the financial sector reached 115,000 sets, a year-on-year increase of 61.6%; the market share of openEuler-based products reached 30.6%, firmly ranking first; Chinese financial entities have a clear preference for commercial server operating systems. In 2022, commercial products accounted for 98.1% of the industry's annual total installed base, with openEuler-based products capturing 69.4% of the market share in the commercial server operating system market in 2022.

The Chinese server operating system market is booming, with an estimated total installed capacity of 4.473 million units in 2023. Among them, the installed share of openEuler products may reach 35.1%.During the period from 2023 to 2027, it is expected to maintain an average annual compound growth rate of about 8.6%, with the total installed capacity exceeding 6 million units by 2027. As an outstanding representative of domestic operating systems, the openEuler operating system is expected to see an average annual compound growth rate of over 18% in terms of installed capacity during the period from 2023 to 2027.

The annual installed capacity in the three key infrastructure areas of government, telecommunications, and finance will continue to grow steadily. In 2023, the installed capacities will reach 748,000 units, 600,000 units, and 442,000 units respectively. Among these three key infrastructure areas, the telecommunications sector is expected to show the fastest growth rate driven by the rapid development of the information and communication technology industry. By 2027, the annual total installed capacity of server operating systems in the Chinese market for this sector will exceed 1 million units; the government sector has the highest willingness among users to migrate to openEuler-based products and is also a major contributor to the installed capacity of openEuler-based products.

More and more Chinese enterprises have realized the importance of basic software technology autonomy and control, and are facing the trend of domestic substitution in the server operating system field with a more proactive embrace. Users from all industries not only expect imitation and following but also comprehensive and thorough independent research and development at the fundamental technical level. They eagerly hope that domestic operating systems can develop their own characteristics, achieve true domestic substitution in the server operating system field, and completely solve the bottleneck problem.

The domestic server operating system industry has entered a stage of rapid development from cold start. With the continuous enhancement of the influence of open-source software, the server operating system market will increasingly lean towards open-source. Domestic operating systems are basically developed on top of the Linux kernel, further developing into independent versions. By adopting open-source kernels, they avoid the process of reinventing the wheel, shorten development cycles, and save development costs. Operating system manufacturers can concentrate on improving user experience and promoting the ecosystem. The development history of overseas pioneers serves as a good reference for domestic manufacturers when choosing technical routes, helping them reduce trial-and-error costs and initial investments to some extent. Driven by the trend towards open-source systems in server operating systems, current mainstream domestic server operating systems are developed based on the independently controllable Linux open-source architecture using basic software technology. Domestic open-source operating systems are expected to expand their influence with changes in the industry landscape.

A rich and continuously evolving ecosystem is the most solid moat for an operating system. Today, the interconnection of everything has become a characteristic of the new era, with diverse application scenarios posing differentiated computing demands. Domestic server operating system manufacturers are taking this as a breakthrough point to provide new products that adapt to the technological evolution of the times. The rapid development of application scenarios such as artificial intelligence, the Internet of Things, and cloud computing is driving the innovation of computing architecture from general-purpose computing to more specialized heterogeneous computing, which requires operating systems to efficiently coordinate different hardware architectures to achieve collaborative innovation between software and hardware. Domestic manufacturers can keep up with the pace of the new era, accelerate the research and development of new products that conform to future development trends and meet future user needs, thereby gaining a first-mover advantage and further enhancing market penetration.