Daniel Fleischer, senior research analyst at IDC, said, "For small to medium-sized businesses, Linux is in the main seen as a cheaper option because you do not have the associated licensing costs that you would with proprietary operating systems."
IDC's most recent Worldwide Quarterly Server Tracker survey found that Linux is currently the fastest growing area of the server market. Sales of Linux servers accounted for revenue worth $583m (£358m) in the first quarter of this year - 35% up on the same quarter last year.
Despite earning a reputation for cost-effectiveness, Fleischer warned that Linux is by no means totally free of costs. "It is perceived to be much cheaper because you can download it for free but there are other associated costs, such as support."
Scalability and Linux's similarity to the Unix operating system are also proving to be a hit with users, according to IDC's research.
Fleischer said, "If you look at scalability, Linux is available from one-way web servers all the way up to the IBM zSeries.
"For large enterprises, Linux is very much an extension of the Unix expertise that they have in-house - that means it is not a major shift in mindset to move to Linux."
Linux applications can also be easily adapted to users' needs, said Fleischer. "Because Linux is open source, the intellectual property is in the public domain - that makes customisation of applications easier."
Business users are also benefiting from the increasing number of Linux applications on the market. John Owen, IT development manager at Birmingham University, said, "The thing that is driving us more and more is that the application base is growing on Linux." This has encouraged senior management to take the operating system seriously, he added.
Owen, who is also chairman of the HP\Works technical users group, said increasing numbers of Linux products are being written for the academic market. "These include the likes of library and cataloguing systems, as well as systems for electronic journals," he said.