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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.'"
"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."
To be fair, Red Hat is capitalizing on the work of Linux developers. They also benefit from the fact that operating systems are complex, tunable, and widely used in business (which has deep pockets). Easy-to-use software written for consumers (rather than companies who need highly-available systems) can't capitalize very well on the tech-support angle.