Taken from www.li.org
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What is Linux used for? 

Application Servers 
Database Servers 
Workstations 
X Terminal Clients 
Unix Development 
Network Servers 
Internet Servers 
Cluster Computing 
Embedded systems 
University systems 
Vertical Solutions such as 
Hotels, 
Medical offices, 
Reservation systems, 
Legal offices, 
Petroleum companies, 
Governments, 
Media, 
Telecommunications, 
ISPs, 
Resellers, 
Manufacturers, 
Retail, 
Financial, 
Trader Workstations, 
Corporate Developers, 
and more...