The significance of the Linux operating system lies in its open-source nature, providing flexibility, security, and community support. Being freely available, it allows developers and organizations to customize the system to their needs. Linux dominates the server market due to its robust performance, scalability, and stability, making it a preferred choice for hosting websites and applications. Additionally, it is widely used for embedded systems and Internet of Things (IoT) devices. Its strong security features further contribute to its popularity among developers.