Microsoft should "fear the Penguin" as Linux moves into the heart of corporate IT infrastructures, according to Goldman Sachs.

The investment bank is optimistic about the future of the open source operating system in its Fear the Penguin study.

Goldman Sachs said that Linux will expand from running web or storage servers because of its reliability and the cheap hardware it can be deployed on.

It also expects Linux to become the dominant operating system on the higher-end servers of the enterprise data centre, where mission-critical functions are run and most IT budget is spent.

Goldman Sachs explained that Microsoft and traditional enterprise system vendors such as Sun, IBM and Hewlett Packard are most at risk from the rise of Linux.

"Linux will not take away market share from Microsoft in its traditional markets," the report added.

"However, it is our view that it will hamper the movement of Windows into the enterprise data centre, an area Microsoft has only recently begun to target for growth."

The survey was conducted among 100 corporate technology departments. It found that 19 were using Linux in low-end servers, 14 to support databases and 11 had deployed it on mainframe computers. Twelve per cent had rolled out Linux on the desktop.

The companies polled said that security, reliability and a good price/performance ratio had been the main reasons for Linux adoption.

Open source software is increasingly finding a place in the business world.

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