1) Startup costs. Linux is free. Ruby on Rails is free. MySQL is free.
2) Performance per dollar. They perceive that a Linux server running Apache has more performance than IIS running .NET.
3) Finding tech staff is easier. There are a whole new raft of young, highly skilled people willing to work long hours at startups who can build sites using Ruby on Rails.
4) Perception of scalability. The geeks who run these new businesses perceive that they can scale up their data centers with Linux and not with Windows (the old “Google runs on Linux” argument).
5) That Microsoft doesn’t care about small businesses. After all, Microsoft is an evil borg, but Ruby on Rails comes from a single guy: David Heinemeier Hansson. He has a blog and answers questions fast.
6) That open source makes it easier to fix problems and/or build custom solutions. A variant of the old “Google or Amazon couldn’t be built on Windows” argument.
7) On clients, they want to choose the highest-reach platforms. That doesn’t mean a Windows app. Or even an app that runs only in IE. It must run on every variant of Linux and Macintosh too.
8) They don’t want to take shit from their friends (or, even, their Venture Capitalist). Most of this is just pure cost-control. I can hear the conversation now: “OK, you wanna go with Windows as your platform, but is the extra feature worth the licensing fees for Windows?”
9) No lockin. These new businesses don’t want to be locked into a specific vendor’s problems, er products. Why? Because that way they can’t shop for the best price among tools (or move to something else if the architecture changes).
10) More security. The new businesses perceive Linux, Apache, Firefox, and other open source stuff to have higher security than stuff built on Windows.
11) More agility. I’ve had entrepreneurs tell me they need to be able to buy a server and have it totally up and running in less than 30 minutes and that they say that Linux is better at that.
12) The working set is smaller. Because Linux can be stripped down, the entrepreneurs are telling me that they can make their server-side stuff run faster and with less memory usage.