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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 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
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?
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
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.
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.
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.
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.
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
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!