Two trends in the computer industry set the stage for the growing popularity of UNIX and Linux. First, advances in hardware technology created the need for an operating system that could take advantage of available hardware power. In the mid-1970s, minicomputers began challenging the large mainframe computers because, in many applications, minicomputers could perform the same functions less expensively. More recently, powerful 64-bit processor chips, plentiful and inexpensive memory, and lower-priced hard disk storage have allowed hardware companies to install multiuser operating systems on desktop computers.

Proprietary operating systems
Second, with the cost of hardware continually dropping, hardware manufacturers could no longer afford to develop and support proprietary operating systems. A proprietary operating system is one that is written and owned by the manufacturer of the hardware (for example, DEC/Compaq owns VMS). Today’s manufacturers need a generic operating system that they can easily adapt to their machines.

Generic operating systems
A generic operating system is written outside of the company manufacturing the hardware and is sold (UNIX, Windows) or given (Linux) to the manufacturer. Linux is a generic operating system because it runs on different types of hardware produced by different manufacturers. Of course, if manufacturers can pay only for development and avoid per-unit costs (as they have to pay to Microsoft for each copy of Windows they sell), manufacturers are much better off. In turn, software developers need to keep the prices of their products down; they cannot afford to convert their products to run under many different proprietary operating systems. Like hardware manufacturers, software developers need a generic operating system. Although the UNIX system once met the needs of hardware companies and researchers for a generic operating system, over time it has become more proprietary as manufacturers added support for their own specialized features and introduced new software libraries and utilities. Linux emerged to serve both needs: It is a generic operating system that takes advantage of available hardware power.

Source of Information : A Practical Guide to Ubuntu.Linux