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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.
A large enterprise would almost never deploy something in production without support. For my small consulting gigs I have never bought support. I think you can see where this is going...
It means "and similar companies."
Mod me down, my New Earth Global Warmingist friends!
The summary: Redhat sells support rather than licenses
You: With Redhat, you buy support
Me: Duh.
So the fact that people who use the software keep buying support for it is not that impressive.
Um, duh? The article is not claiming, 'Ooh! Out of all the people who buy Redhat, look how many people buy support!' It is saying, 'Look how many people buy Redhat in the first place.' Redhat has continued to profit during the economic downturn, which is impressive. Come on, man, any hobbyist will use CentOS, or create their own update server, and/or download the patches and updates from another source. Any corporation or government will buy support. But they won't necessarily buy Redhat, in fact, most of them end up buying Windows, right? But enough buy Redhat to ensure Redhat's profitability. Which is the point of the story...
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Then you don't know that many people who use Linux in a production environment with management's approval. Here at New Mexico's Child Youth and Family Development Department, we pay for support. We pay Novell for Suse Linux support (we're a Netware legacy shop), we pay Oracle for MySQL support, and we have 'as-needed' support contracts for other important open source software packages like Splunk & OpenNMS.
So, there you are. I pay for support. But I'm married, so I guess I'm not a 'single person who pays for support.'
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
While I'm glad and all that they are so called flourishing in the recession, they are getting 194 million in revenue.
That's a pittance in corporate america.
Even if it wasn't gross income, it wouldn't be that impressive.
Also, people seeking a cheaper option in a recession?
Have we ever heard that before?
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?
What exactly do you think the support folks do?
> 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
Ah, hate to break it to you but the Slashdot audience is getting older, so the joke is no longer, 'We're all single and can't get laid.' The joke is now, 'We're all married and can't get laid.' Please do keep up.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
Apparently he thinks they sit around waiting for things to go wrong, like the typical Microsoft admin.
"I assumed blithely that there were no elves out there in the darkness"
To be fair, Red Hat is capitalizing on the work of Linux developers.
To be even more fair, Red Hat employs many of the prominent Linux developers, and is currently the biggest corporate contributor to the kernel. In addition, they're heavily involved with GCC and gdb, not to mention MANY other GPL projects.
That's why they have the concept of "support levels." In most cases if you have Basic support it means you get access to their private online knowledge base and a VoIP line to an outsourced guy behind a desk on the other side of the planet.
If you're an Enterprise then you have direct access to a bunch of very smart guys who come buy your team dinner when they're in town.
What I think they do is get a kernel dev on the line if that's what it takes to resolve my issue (which is funny because my company has a couple kernel devs on the payroll).
Seriously, they (RHEL) make their living by making my engineering department's life easier. We're predominately a windows shop, a fortune 50 company, but we also use linux a lot... and most of it is RHEL.
whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
To be even fairer, Red Hat do employ a large proportion of the kernel and userspace developers for the software they make support income from - they even have a record of open sourcing code that they get from company acquisitions. But they are very much benefiting from the fact that it's easier to build an OS by co-operating with other companies and individuals than to go toe-to-toe with MS (and Apple, not that they're direct RH competitors in any significant way) on your own.
If the old one works fine why would you need a new one?
In the grownup server world we really don't need flashy new guis or other such silliness.
Ah, hate to break it to you but the Slashdot audience is getting older, so the joke is no longer, 'We're all single and can't get laid.' The joke is now, 'We're all married and can't get laid.' Please do keep up.
Soon a growing portion will be "This page was bookmarked on my dad's computer; what does 'laid' mean?!"
The Long Now Foundation
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.
Linux, which is at the core of Red Hat’s software strategy, has never been a huge success on the desktop, and especially not on the business desktop. Red Hat officials have shrewdly maintained that desktop Linux is not a core focus for the company, but that virtualization and the facilitation of desktop and cloud operating systems applications are.
As I know this will become a polarizing statement on this thread, let me try (try being the key word) to neutralize this quote.
Red Hat is not implying here that desktop Linux is a failure (like it's subpoint headline apparently does). They are stating two important truths: (a) that Linux on the desktop has not taken off as much as some pundits have been forecasting for a while, and (b) that this goal is not part of their overall focus and won't be for some time.
I don't agree entirely with this viewpoint, since Ubuntu and netbook-provided distributions have contributed to its significant increase in consumer presence. Regardless, Linux on the server is where it's at, and where Red Hat has had huge control over for quite some time. Thus, it's no surprise that they are flourishing at the moment, despite the current economic situation.
I hope you were being sarcastic, because Red Hat gives a huge amount back.
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.
I'm quite sure that Redhat's "support" model is designed to frustrate and confuse.
You pay per server per year. That's not exactly confusing. Frustrating only in the sense that... you have to pay for it.
Customer: "I'm a FOSS DEVELOPER! YOU'RE SELLING ME MY OWN CODE!"
http://ftp.redhat.com/pub/redhat/linux/enterprise/5Server/en/os/SRPMS/
No they're not. They're selling you binary packages and the ability to call them up at 2:30 AM to get your issues fixed. If you want your code, it is right there for you to download without issue.
They can smugly tell me "see, software isn't free?" and feel much more comfortable signing cheques for $1500/year.
The software is free. If they don't understand what they're purchasing, that's their problem, and only yours if you decide to make it your problem.
You have a clue, you can use CentOS or any other distribution you want. Your company can't tell the difference between CentOS and something off TPB, and they're paying 1500$/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.
The first step to defeating corporate personhood is convincing people to think of corporations as plural entities. Despite being British I usually write in American English, but this is a notable exception.
At least in my world, our banks and trading partners like to make sure we have outside support, in case one (or all) of us gets hit by a bus. That's only being responsible. Our best-supported (and most important) systems are RHEL systems. Then again, we are probably what you would consider a medium-to-large US company.
Unless your scope is kept very shallow and/or very focused, you will never be doing anything more than tweaking applications or simple debugging. The codebase for most apps is too large and if it's not your primary job / hobby then you won't have time to learn it, let alone keep up with its development.
It's wise for each company to know where they stand when making any IT expenditures, whether the goal is to have a large Help Desk for instance or outsource everything beyond a certain scope. I don't run cabling anymore, and although I could if needed, we pay contractors for that stuff. Just like I implement systems using MySQL, but I don't tweak its source or try to perform bugfixes myself (beyond Googling for answers to questions) because I have other things to do. I support other databases and systems, and I have other apps to code. My time is most valuable to my employer for these tasks, and I'm a lot more expensive than spending a few thousand a year per server for support.
Need an example? OK. We successfully implemented a fiber card in 2 of our blades (RHEL 5.4 with kernels from 5.1) and this week brought up a third blade (same model, same base OS) only this time using RHEL 5.4 with KVM for virtualization. The kernel is 5.4 and the HP drivers won't install. The issue appears that one of the RPM's (lpfc IIRC) won't install because 5.3 and higher is not supported. The support grid at HP says that 5.4 is supported. Now I need to implement the entire tested solution by the end of next week.
Do I want to play around with this? No. I have one of our network admins contact HP and work it out, and when they're finished, give me a written set of instructions which I will add to my documentation. That's how larger businesses handle this stuff.
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!
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.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Yet everyone there still receives a paycheck, and a quality product is produced....
Am I missing something?