The LAN market: segments at a crossroads

Computer Industry Report, August 31, 1995

In 1994, IBM OS/2 LAN Server increased its sales to 92,500 licenses and 1.6 million nodes worldwide (9.1% share). Meanwhile, Artisoft's LANtastic garnered sales of 683,000 nodes worldwide in 1994, earning a 3.5% market share, while Banyan's Vines accounted for 1.9 million nodes, or 6.1% share.

Definitions

IDC defines a PC LAN operating system (OS) as software that enables PCs attached to local area networks to communicate with the network server (whether dedicated or nondedicated) and with other PCs on the network. PC LAN OSs must have the following functionality:

* File sharing among the PCs on the network

* File storage and retrieval to and from the file server

* Shared print services on the network

Additional features generally considered by IDC to be part of a PC LAN operating system include the following:

* Ability to run and customize multi-user (network) applications between multiple PCs or between PCs and the server. LAN electronic mail and database management systems are the prime examples of these applications.

* Network administration, directory, management, and security functions.

* Provision for LAN-to-LAN communications and gateways from the PC LAN to other systems (IBM mainframe gateways and remote dial-in).

IDC considers the following products to be PC LAN operating systems: Novell NetWare family (Personal NetWare, NetWare 2.x, 3.x, and 4.x), 3Com 3 and 3 Open, IBM PC Network Program, IBM OS/2 LAN Server, Microsoft LAN Manager (OS/2 or Unix), Microsoft Windows NT Advanced Server (NTAS), Microsoft's Windows for Workgroups (if used for peer-to-peer networking), AppleShare, Banyan Vines, Digital's Pathworks, Artisoft LANtastic. In addition, any LAN OS designed around Novell's Portable NetWare, Microsoft's OS/2 LAN Manager, or LAN Manager/Unix are considered PC LAN OSs.

Both 1993 and 1994 figures are actual. Forecasted revenue figures are based on the average sales value of LAN OS products, where the average sales value is the average price the customer pays.

TCP/IP

Twenty years after its invention, TCP/IP is emerging as the foundation for next-generation networking. Perhaps the most general force driving TCP/IP adoption is the desire of organizations to build tighter links between users and applications through client/server computing. Other related trends that account for the tremendous growth in TCP/IP use include the following:

* Growth in the use of Unix systems in commercial environments

* Increased role of TCP/IP in application development

* Embedding of TCP/IP within leading desktop and server operating systems

* The migration of enterprise networks to TCP/IP

* Expanded use of TCP/IP networks for remote access

* Broader Internet usage in organizations/World Wide Web mania

PCs Driving Growth

The largest and most competitive market for TCP/IP products is the PC segment. From revenue of $439.6 million in 1994, the worldwide market for PC-based TCP/IP products will grow to roughly $1.7 billion in 1999. Meanwhile, the worldwide percentage of PCs with TCP/IP will grow from 5.5% in 1994 to 66.1% by 1999 as TCP/IP is embedded in major desktop operating systems (like Windows 95) and firms continue their migration to network-centric computing.