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.'"

Comments

Re:I don't buy it.

[mr_da3m0n]

You haven't seen a lot of big production environments then. They're more than common in larger buisnesses.

To be expected, really.

[pushing-robot]

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.

Re:Not that impressive

[Jah-Wren Ryel]

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.

Re:Not that impressive

[rahvin112]

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.

Re:Not Optional

[Kjella]

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.

CentOS also does paid support

[flyingfsck]

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.