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Dell Calls For Red Hat To Lower Prices
VaultX points to an article on CNET (linked below), writing "According to Dell, Red Hat needs to lower pricing. 'We believe Red Hat Enterprise Linux 3, for the small and medium-sized business market, was out of the price range of these customers.' With Dell's strong presence in the Linux server market, Red Hat may want to listen."
The prices are a little bit on the high side, but you are buying support not the software for the most part and they are certainly not higher that Windows Server 2003 which they are setup to compete with.
RHS 3 is a pretty solid server IMHO, after using it for a few months on a web server and finding it far superior and simpler to manage than the Solaris box the company has its other website on.
Couldn't/Shouldn't Dell look into other Linux server packages? After all, that is the nature of the free market. If Dell drags Red Hat and, say, Turbolinux, or god forbid... SCO... into the fray, that would make the bottom line for companies looking to switch to Linux even more appealing.
I'm the Devil the Windows users warned you about.
I imagine it'll happen. I have a feeling RH gets most of their sales from Dell, it's the ole'Walmart syndrome, where they either lower their prices, and go out of business, or go out of business because they lose their main client.
Damned big companies.
It still looks bad for ANY linux distro to have high pricing. If Linux is evet to get a decent foothold in any market, it has to appear to have both a low TCO and a low initial purchase price. Managers do not look at what it can do, just what it costs. The take up, and major market share has no bearing on stability or operability, we all know that already.
I completely agree with Dell's views on RHEL's overpricing. I bought a Dell PowerEdge server for a small business back in August but Red Hat's Enterprise Linux was overpriced and we felt uncomfortable buying a subscription at the rates we were offered from Dell. Instead I recommend we choose Suse's offereing which was a far more viable option for the company. I can see why Dell went for Novell a month or two back. Let's not beat about the bush though, it could be construed that Dell spoke to Novell so they are now in a better bargainig position with Red Hat.
This is a HUGE opportunity for Sun. They could drop Solaris 10 for x86 in there, and offer Dell two interesting pricing options: free and supported. The free option hits an impossibly low price point while getting Solaris 10 on the street (displacing Red Hat), and the supported option would allow Dell to white-label the license so that they could sell a single vendor corporate contract. Um, wait, Sun won't move on this in time, so never mind.
The real question is what their sales would be if they offered a low-end product for $50 per year or so. Dell is not saying that Red Hat is not making money, they're saying that Red Hat could be making more money.
Yes, It's expensive for me or a 5 worker business
I work for a mid-size corporation, and it is too expensive for us. Welcome to the world of tight budgets!
Isn't it up to Red Hat as to what consumer base they want to sell to?
Of course. Read Dell's comments -- they're not suing Red Hat, they're simply warning Red Hat that they need to lower their price. Just as Red Hat has the liberty to sell whatever the hell they want, Dell has the liberty to use a cheaper distribution. At least Dell was nice enough to warn Red Hat instead of just dropping them.
disclaimer 1: i used to work for Red Hat
disclaimer 2: I have done contract work for Dell
Dell always will badger vendors to shave prices wherever/whenever/however possible. Every dollar they can save somewhere equals X% increase in marketshare or volume for them. Dell is a ruthless selling machine.
Up until recently, Dell really didn't care so much about Linux for the SMB market, only in the way that their customers wanted it (and it gave them an option). I would imagine that:
1. Dell has done the math, realized that SuSE isn't penetrating the way they had hoped
2. without serious competition (which was supposed to exert price pressure on RH) Dell has resorted to publicly whining about RH prices
3. This public whining is supposed to snowball and "force" RH into reducing prices.
The problem is that the SMB market is actually more resource-intense in terms of support. As such, Red Hat has never really liked it (compared to Enterprise), but Dell's volume volume volume absoultely depends on it.
If Dell agrees to shoulder more of the support burden, I would imagine they could get very good deals with RH.
davejenkins.com |
What can you do? Redhat is in demand, and they have to look at the pofit curve and extract the most money. Do you blame em?
Everyone keeps hearing about this thing called Linux, too many companies are pushing it out there. Maybe your windows servers been crashing since NT 3.51, so you start looking. Redhat is the biggest Linux vendor with support. You want a big BIG company base behind your OS, and a software base, Redhat is it, with Suse coming in second regardless of price or quality of support or binaries or whatever.
So you go with the top Linux vendor. With Sun, IBM pSeries slowly defeated, and HP's HPUX platforms, well, I dont know anything about them... and Apple too vertical a market for your taste with all server apps in the wild against it, you'd head for none other than Redhat, after Microsoft, in OS sales.
For us, Redhat needs to be a rich successful company. Thats more important than the number of sales they make. Reason being their success attracts other vendors, and several competing vendors are much better than one vendor with the global supply of commercial Linux. Their success also puts them in a position to improve the Linux market itself, we've seen Redhat ads compete with Microsoft ads. Slackware couldnt do that. We've seen Domino, Oracle, and many other major server apps released in redhat packaging and supported as such. Debian couldnt do that.
So let Redhat get rich. Please. Beyond a threshold, Dell will purchase it. Below the threshold, Dell will purchase the next best thing and improve competition. If people need 'Redhat' Linux, let them pay for it until something better comes along.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
Welcome to the enterprise my friend.
The purpose of enterprise support is not to fix your problem it's to convince your CIO to buy the product. It's to make sure the "is supported" box is checked off.
I have had the exact same or worse story from every majow vendor in the IT world. MS, Netapp, HP, Veritas, Dell and Apple. Call them up and all of a sudden you find out you paid for nothing. They all find an excuse not to help you. I even had a netapp guy say "don't call us anymore" despite the fact that our company had paid for top level support.
My experience is that the only people who support you are small local vendors. They will camp out at your place if they have to. Enterprise vendors just take your money and laugh.
evil is as evil does
To continue your example... the Anonymous Coward can now buy a Jaguar XJR-15, Viper SRT/10,Lamborghini Diablo and all other top sports cars at 1/4 the price of a Ferrari F430. Not to mention that you CAN'T BUY THE FERRARI, you can only LEASE IT. With all other car companies you can buy the car.
:-) I personally love Ferrari.
So in this case the dealerships are saying that Ferrari needs to lower it's prices to be competitive. Ferrari could ignor its' dealerships and see how it goes, or they could listen.
RedHat is a fool to belive their competition is Sun, and as such they charge what they do. Their real focus should be on Windows servers, but their upper management has become greedy and stupid.
Now the other issue is the HUGE price differences that have occured in the last three years.
3 years ago. RedHat 7.1 was ~$60. You load it on as many machines as you wanted for no additional cost. You could also pay for support on a per server basis.
1 year ago. RedHat ES 3.x for X86-64 was $2,500 minimum a year per server. If you did not renew your license, you were NOT allowed to run the server.
Today - RedHat ES 3.x for X86-64 is $350 a year per server. Again, you must pay per server EVERY year.
So using your example. Ferrari releases the F40 for say $30,000. Then next year releases basically the same car for say $300,000/year lease. Then the next year releases if for say $60,000/year lease. All this while their management seems hell bent on taking down Leblanc (2% market of high performance sports cars), while Porche owns the vast majority of the high performance sports car world, and they don't force people to lease. So to continue this example more... Lets say Porche isn't as fast, and can't brake quite as good.... but they are working on it, and have enormous resources, while Ferrari has about 1/50th the resources as Porche.
NOTE: The car percentages are just examples, not real world
I for one would love to see Dell start pushing SuSe more, or ANY OTHER DISTRO.
My last complaint is this.
RedHat does not do the following:
1. Code a majority of Apache.
2. Code a majority of the Kernel
3. Code a majority of KDE or GNOME
4. Code a majority of TCP/IP stack
5. Code a majority of FTP/DNS/SAMBA servers
6. Code a majority of SSH
7. Code a JVM for Linux.
They just take what other people do, build a good installer, and make sure that everything works well together and make a good update program. Granted that is some significant work, but it doesn't compare at all to doing all that development in house. So why do they charge so much?
The good news is that there is competition out there, and this will balance itself out. I believe it was SuSe alone that forced RedHat to lower it's X86-64 prices.
I believe that RedHat should release a version of their product without support that you own, not lease for $350. That would get you one year of updates and can be loaded on as many machines as you want, however to get updates on those other machines would cost you $75/year per machine.
Again you would OWN the product, not lease it.
The more I learn about science, the more my faith in God increases.