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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."
'We believe the Ferrari F430 Spider, for the small and medium-sized automotive market, was out of the price range of Mr. Coward.' With Coward's strong presence in the local Ferrari dealership, Ferrari SpA 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.
Yeah, the college I worked at balked at the prices too, until I told them about the $50 .edu price (workstation is $25) ... Couldn't find anything on their website, but a email to the sales department took care of it.
Don't blame me, I voted for Kodos
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.
here's one of them. It's a personal account of working inside of the "dell beast." Written by the site maintainer of www.amdzone.com it was written only a few days ago. Most of the thoughts reflect my sentiment and experience with dell..
here it is
John Allen Mohammed
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.
Timewarp?
Version 3 is the current version of Red Hat Enterprise Linux (RHEL). RHEL is different than Red Hat Linux (RHL) which was end of lifed after version 9 to be replaced by Fedora Core.
They could always add support for something like Debian, which is known for its outstanding stability in spite of its lack of big commercial backing. Dell could then offer graduated support options, including, no support. I'm sure lots of businesses that would jump at the opportunity to get a server with Linux preinstalled (that way they are sure all hardware is working and configured out of the box) even if they have no need of a full support package.
Isn't RedHat Server cheaper than Windows 2003 Server? And RHS is supposed to compete with Win2k3.
RedHat ES -- $349.99
RedHat WS -- $179.99
Win2k3 -- At least $400 from what I can pick up.
BTW, if Dell doesn't like RedHat, why don't they use something else? People vote with their dollars.
~Ilyanep
To get message, take amount of carrier pigeons at each stage mod 2. Then decode binary.
Someone better tell IBM that then:
Deploying Red Hat Enterprise Linux on xSeries is now even easier. I November 2003, IBM introduced bundles of Red Hat Enterprise Linux with xSeries servers. Red Hat Enterprise Linux AS 2.1, Red Hat Enterprise Linux ES 2.1, or Red Hat Enterprise Linux WS 2.1 may be ordered when purchasing BladeCenter and xSeries servers. Offers are available with a "No Support option", which will allow the customer to purchase support from IBM Global Services. Also available are offers with 1 year of Red Hat support. Every copy of Red Hat Enterprise Linux includes a one year subscription to Red Hat Network. Now, customers can buy either Red Hat Enterprise Linux ES or WS 2.1 pre-loaded on x205, x225, x305, x335, and x345 servers in the US. For all other models, Red Hat Enterprise 2.1 Linux will be included with the server and installation will be performed by the customer. In 2Q04, Red Hat Enterprise Linux 3 will be available via similar offers.
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.
The price is too high, that is why some of us have been using White Box Linux for some time. It's 100% binarily compatible with RH, and it works.
From the above linked website "This product is derived from the Free/Open Source Software made available by Red Hat, Inc but IS NOT produced, maintained or supported by Red Hat. Specifically, this product is forked from the source code for Red Hat's _Red Hat Enterprise Linux 3_ product under the terms and conditions of it's EULA."
So far - and 10's of servers later - no complaints, works like a charm. Since it works so well. Why pay? For their support? Lets be honest, we generally find the bugs before RH does, and our staff can handle anything - including figuring out the undocumented changes that RH makes to their own products (example: static routes anyone?).
cluge
"Science is about ego as much as it is about discovery and truth " - I said it, so sue me.
Whatever. Buying a Dell server with Linux was easy for me. I can even transfer the Redhat Network license/updates and the server's warranty online to a customer. And I did NOT buy Windows.
This guy is way out there
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 |
RHEL ES has two versions, priced at $350 and $800, depending on the support level. W2K3 SBS (Small Business Server) is available at different prices from different vendors, but is typically around $500. All prices in US dollars. The prices are quite similar. If you need support for more than installation and basic configuration, Windows 2003 is actually cheaper.
If small businesses find Windows easier to setup and maintain, then it could be worthwhile. I'm not able to personally confirm this one way or the other, but various people I know who have configured both Linux and Windows 2003 as servers claim that Windows is easier to configure and tune for performance.
Perhaps Dell simply means that for the market they are selling into and the price they are charging, there is a better product available from Microsoft. It's hard to see how Red Hat could compete on price; they really aren't charging a huge amount. For businesses that can't afford a full time server administrator and don't have any Linux expertise, it is quite possible that Windows just plain is a better choice.
Going off topic, Red Hat's website has the Ghandi quote that Slashdot loves: "First they ignore you, then they laugh at you, then they fight you, then you win." A year ago, Microsoft was fighting Red Hat. Now they are laughing at Red Hat. Linux still has a chance, but this battle definitely isn't going the way that Red Hat planned.
I hate to say it, but with IBM preferring Novell and SLES, I think Red Hat has lost.
Whoever corrects a mocker invites insult;
whoever rebukes a wicked man incurs abuse.
--Proverbs 9:7
Thse are all the reasons not to use it for a server.
To my brother poster: Gentoo on the server? If you were my employee I'd have you fired. And no, I don't want to hear about building then distributing binary packages.
The only truly free options for servers is Debian stable. Long release cycle, vast package repostiories, security backports so your servers don't break, seamless upgrades in place. Everything Fedora is not. Use it or at least something actually meant to be stable, be it Whitebox, SuSE, etc.
That describes my situation six months ago exactly. Then I had a problem with up2date.
So I called RedHat for the first time in the decade I've been using it. I found out:
I challenged them that there was no indication on their website that RedHat Linux upgrades were unsupported (they always were in the past so it's not unreasonable to assume they still would be) and they conceded the point and offered to get a notice up within a week, but weren't any more helpful.
So, what kind of support are you getting for that money? It's alot like Microsoft support. Completely useless so a waste of money by definition.
It's too bad - I was 3 licenses into a 30+ server effort over multiple clients, and that's as far as I got. There's a huge base of installed RedHat Linux users they're completely ignoring. I want to help pay Alan Cox's salary, but they don't make it feasible for me.
Instead of throwing good money after bad, I ditched it and put Fedora Core 2 on. Yeah, I'm out $300 but yum will set you free. Plus firewire works perfectly in the current kernel releases.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
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
When are people going to realize the best support you can have is hiring someone actually qualified to do the damn job in the first place. Just for fun I like to apply for jobs and get interviews to see how the market is doing in my area. I always get the "How important is it that you make what you currently do?" line. My favorite part is when other employees interview and are so proud of their projects that are minor at best.
When you hire the best that is what you get. When you hire the cheapest that is what you get. Quality isn't free. I guess when all the software development jobs are in India/China we might start to understand there is more to being an excellent employee/partner than just understanding how to program. Or maybe not! Either way I'm on my way out of programming asap.
RHEL: Annual subscription, unlimited clients
Win2k3: Outright license purchase, CAL cost per-client.
You can't effectively compare the prices of the two without a context, such as the lifetime of the server and the number of clients that are expected to be connected to it.
Because you're pulling those figures out of your ass.
Now before I get modded down, I be to remind whoever might read this that what I am saying is FACT. - bogaboga
Due to corporate policies, we are generally a Windows shop as far as the global infrastructure is concerned. If I want to setup a mail server with Windows, I am looking at purchasing Windows 2003 Enterprise version, Exchange 2003 Enterprise Version, Client access licenses for the servers, and possibly Terminal Server licenses as well. Figure the server hardware will cost around $10,000, and to get fully decked out with an Enterprise Level OS and Email system from MS will cost me around $5000. That is 50% the cost of the hardware. This doesn't even begin to address support costs.
I have switched from Dell in the server room to HP, so I am not sure what the Dell server prices are like in terms of dollars, but I do know they tend to be cheaper (at least in Asia). I recently compared a similar hardware Dell quote and an HP quote for a Korean associate and the Dell quote was 40% cheaper. So, if we say a Dell server is around $6000 and the enterprise level OS that runs on it is $359, we see that the software is priced at roughly 6% of the hardware. Even the $799 version is only 13% of the hardware price, and this is assuming the hardware is 40% cheaper than the Microsoft comparison.
Not exactly over priced in my opinion in. In fact 2 support calls to Microsoft cost this much. Once we get into the higher level offerings from Redhat then the ratio changes a little, but the point to remember here is that this includes support!
RHEL AS Server is $2499/year and includes Web and phone based comprehensive support 24 x 7 1 hour response Unlimited incidents 1 year Red Hat Network
1 hour response time costs! You have to have higher prices to even begin to offer this. For environments where you do not need 1 hour response (the best Dell offers is 4 hours -- in Japan ;) ) time from your vendor, you do not need to pay for it. With the Microsoft offering, I am paying large sums of money without any support included.
I personally run Debian at home for my mail/web server (and Gentoo when I feel like getting frustrated) but if we were ever to switch to Linux in the server room, one of the biggest deciding factors would be the quality and availability of support. Red Hat's target is certainly not the geek home user who balks at a $359 price tag and doesn't require support. It is the Corporate Enterprise market where when the server is down and the company's business is impacted people are glad to have paid for support. In that market, their prices are excellent in my opinion. If they were charging peanuts, they would not be taken seriously by the people making the business decisions for a company. Businessmen tend to understand that you can't get something for nothing, especially service.
With Linux, you have a choice
With Linux, yes. But with Dell, not necessarily.
Everytime you order a new Dell system it will be a question if it will run Linux.
Dell supports Red Hat Linux. That will work.
But we use SuSE, and nasty things happen.
For example, we have ordered a number of SC400 servers and were very happy. Then, it was replaced by the SC420. So we ordered one of these, without OS. Red Hat is supported on it.
But SuSE 9.2 does not recognize the SCSI controller. Why? because Dell got a modified 39320 SCSI controller from Adaptec that can only work in the "HOSTRAID" mode (Adaptecs swindle to make you think you buy a RAID controller while it actually is just a SCSI controller with a driver).
The problem is that Linux does not support the HOSTRAID mode, and Adaptec only provides a (binary) driver for the OS versions it likes. SuSE 9.2 is not amongst these.
So the machine is sitting at the YaST installation screen, waiting for a solution. I know I can solve it but it takes hours of extra time for what should have been a smooth install.
This is not the first time this has happened to us. Dell just buys what is cheapest for them at that moment (the SC400 had a MPT SCSI controller), and lets the customer sort out the problems.
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.