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Red Hat Support Continues To Flourish
ruphus13 writes "As the pure-play Open Source companies continue to dwindle, Red Hat has thrived through the recession. Its support revenues have grown 20+%, and account for 75+% of its revenues. 'Instead of the traditional strategy of selling expensive proprietary software licenses, as practiced by the Microsofts and Oracles of the world, Red Hat gets the vast majority of its revenues from selling support contracts. In the third quarter of last year, support subscriptions accounted for $164 million of its $194 million in revenue, up 21 percent year-over-year. All 25 of the company's largest support subscribers renewed subscriptions, even despite a higher price tag.'"
You haven't seen a lot of big production environments then. They're more than common in larger buisnesses.
It's not surprising that a cheaper product will prosper during a recession; the McDonalds and Wal-Marts of the world are getting boosts from the general attitude of cost-cutting. The real proof of Red Hat's success will be if companies continue to choose it over Windows during the next economic boom.
Still, it's good news. Companies that switch now are less likely to go back to Windows in the future.
How can I believe you when you tell me what I don't want to hear?
> To be fair, Red Hat is capitalizing on the work of Linux developers
Yah, it's not like they pay a large number of Linux developers.
"Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
Can someone point out an example showing me that I'm wrong?
You aren't even wrong. To be wrong, you have to make sense. You see, if you are one guy writing closed source, unless it becomes HUGELY popular, you won't make any money. So, what exactly are you comparing open source to, that is somehow different? You try to imply that it's hard to make money with open source coding, but you fail to provide a convincing case that it is any different with closed source coding.
As we saw in a recent article, most open source coders work for companies that pay them. And the other ones aren't doing it for the money anyway. Think of open source coding as a demonstration of your skill, that will get your foot in the door of almost any company you want to work for. Or, a hobby. Not everything in life is about making money. Some people make money, yet still do things they enjoy without getting paid for those things.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
I'm not sure what you mean by "capitalizing on the work of Linux developers" or if that's intended as a slight against RH.
If so, I should point out that a number of the top names in kernel development are or have been RH employees.
Pain is merely failure leaving the body
Mod Parent up! Great grandparent is not a troll. Summary is very poorly written and fails to capture what is interesting about RedHat.
Selling required support with free software is really not that different than selling expensive software that comes with support.
The fact that expensive software is so well supported is why people pay money for it!
$194 million for the third quarter of 2009, $650+ mil for the year.
You see, if you are one guy writing closed source, unless it becomes HUGELY popular, you won't make any money.
I argue that that is simply not true.
I point you to Spidwerweb Software as proof. Jeff Vogel's games are not hugely popular. They have a fairly small following. They are pretty cheap, too, and they are shareware, technically. Nothing open or free, though, about them - aside from the demo's, and if you decide to pirate it/use a keygen. Which, by the way, definitely hurts his income... it's an interesting perspective on the whole "software piracy doesn't hurt anyone" thing. Anyway, he can make a living for himself without being hugely popular.
That's a pittance in corporate america.
Remember Bob Young's famous quote that his goal for RedHat was not to grow to the size of Microsoft, rather for Microsoft to shrink to the size of RedHat.
When information is power, privacy is freedom.
Alone, that's not such an important statement. After all, look how many people buy Windows. Neither of us would suggest that the fact that so many people buy Windows is evidence of its excellence over all others. It's interesting that the article chooses to use percentages rather than numbers of users.
I think the point that the GP misses is that lots of people are choosing Redhat over other distros because they have support. They're not buying support because they have Redhat.
The point being, and I'm sure you agree, is that Redhat's model, which was a little bit controversial at one time, has proven to be reasonably successful. A significant number of the "pointy haired bosses" started out as greasy-haired Linux geeks, after all, and I'm guess that more than a few of them have decided to go with Redhat's winning formula, which according to TFA has proven to work out well for them.
You are welcome on my lawn.
I doubt that most RH users are FOSS developers.
And if the bosses are so smug and too stupid to understand CentOS, they probably wouldn't notice if you went ahead and ported to it.
You are welcome on my lawn.
At $609million in a year with MS at 10.9 Billion they are producing 1/20th the revenue of MS without selling a single product (where MS has hundreds) while Redhat is less than 10 years old and MS is close to 40 years old.
I'd say what RedHat is doing is pretty darn impressive. 1/20 the revenue of the largest software company in the world in 1/4 the time while only selling support and their product is available for free. Impressive doesn't even begin to describe how successful they are at this point.
You have a clue, you can use CentOS or any other distribution you want. Your company can't tell the difference between CentOS and something off TPB, and they're paying 1500$/year for it. And you blame Red Hat? Sorry but I'd be doing the same thing and ask if your company would need some extended warranty or monster cables with that. As usual, ignorance costs money.
Live today, because you never know what tomorrow brings
I think you don't understand how large businesses operate. They minimize risk whenever possible, sometimes even at the expense of profits. Running servers without some kind of safety net (read as: someone outside the company to blame) is a huge risk. Even if they have talented admin(s) on their staff, employees get sick, quit, or just don't feel like fixing some things. This is how large business operates. It's amazing they make any profit at all.
checking for libvirus... no
ERROR, libvirus.so not found, terminating
You don't get it on how to make loot with this FLOSS business model stuff. I'm not even a dev and I get it. I will try and 'splain this.
Here is the example I have used before: Remember hard wired telephones? Once a year way back then you get a free book from the phone company called a telephone directory. Inside the directory are different colored pages, white is residential, blue is government, and yellow is commercial business. Notice they have the full alphabet covered in that "yellow pages" section, businesses A-Z, autos to ..whatever, zoologists. This is 2010, ALL those businesses ALL use computers/software to make money somehow.
That's how you make money with FLOSS, use it in one of those "other" A-Z businesses. Use it tweak it customize it, then go forth boldly with computer and code in hand and build and sell your widget and service.
Stand alone software as a business directly makes some people some money, for some people, in some areas, even a few large places, but the rest of the business done on the planet simply dwarfs that, just stomps it flat. There is no comparison.
example, the article: redhat makes x-dollars supplying clients. Those clients are in OTHER business that makes 1000x. Which looks to be where to head to make the rent and food budget?
They make so much money, they can afford to pay for software and service and still make a lot of other loot, tons more than what redhat makes. I bet most of their big clients are giants and make billions, compared to what redhat makes, which is low millions.
Home depot makes money selling tools. The people who buy those tools and materials makes thousands of times more money than home depot building houses and commercial buildings and being plumbers and electricians and landscapers etc.
Not everyone will work at home depot, but a whole lot of people can work someplace else and just use home depot just as an easy way to stay up with the tools and materials they need to go make some REAL money.
Now, cooperating on code in general terms, all the floss dudes all over, lets all those guys who are in other businesses stay focused on their real business, and "make money". By sharing code, they all get spiffier tools, for free or real cheap. They then use those tools to go to work doing something useful and make money.
CorelDRAW Graphics Suite or Canvas Professional are probably better suites for casual corporate users too.
I'm sure there ARE a very few tasks where Photoshop is ideal, but realistically, only serious professional design-oriented people actually need Photoshop.
"I've got more toys than Teruhisa Kitahara."
I tell the powers that be that one can get support from various places, for example, Red Hat, CentOS, Mandriva, Novel or Oracle, for what is essentially the exact same system. Low cost or free support is similar to Microsoft support and comes in the form of regular updates and web site self-help troubleshooting forums. If you need phone support or on-site support, then it costs more. Then I add that since he already hired me with 25 years UNIX experience, the free support is good enough, so we can use CentOS. If I get run over by a bus, then he may have to change to paid support until he hired another old guy. I never had a problem following the above explanation.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
From years of maintaining fairly large environments I have calculated the amount of manual work maintaining Windows servers to be around 5-10x higher then Linux / Solaris. So I don't think it's just a question of how much the license / support fee's add up to, but rather how much everything (including personal to keep things running) add up to.
Please note I have not really touched Windows servers for 3-4 years so I don't know if things have improved significantly.
Only they usually screw this up through incompetence or ignorance...
One of the most important factors of having a safety net is to make sure everything you depend on has multiple sources....
Linux - RedHat, Novell, Ubuntu - check
Servers - Dell, HP, Sun, IBM - check
Routers - Cisco, Juniper - check
Windows - Microsoft ??? - FAIL
And the same for most other proprietary software... no second source, no fallback if the single supplier has problems.
If RedHat go bust, i'm sure Novell, Oracle, Canonical or anyone else will be more than happy to support your current RH installations while you gradually migrate to their distro... And seeing as how their distro will be very similar, based on the same kernel and same basic libs that migration will be fairly painless.
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Yet everyone there still receives a paycheck, and a quality product is produced....
Am I missing something?