Slashdot Mirror

← Back to Stories (view on slashdot.org)

Red Hat Support Continues To Flourish

Posted by ScuttleMonkey on from the focus-is-everything dept.

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.'"

10 of 215 comments (clear)

  1. Re:I don't buy it. by mr_da3m0n · · Score: 4, Insightful

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

  2. Way to restate the summary, Cpt. Obvious! by spun · · Score: 5, Informative

    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
    1. Re:Way to restate the summary, Cpt. Obvious! by Third+Position · · Score: 4, Informative

      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...

      Well, not necessarily. I work at a shop with over 1700 Unix/Linux servers. Yes, we also have Windows servers, but for applications that are running massive Oracle databases, Unix/Linux servers are still the only way to go. It's true Red Hat isn't the only Linux distro, but in terms of data center servers it's become pretty much the standard with Suse a distant second. There just aren't that many Linux distros that are enterprise friendly, Red Hat pretty much has a monopoly on the enterprise Linux market. So while Red Hat isn't a proprietary OS, it might as well be. Given that we've been replacing our Sun and HP Unix servers with Red Hat Linux hand over fist, Red Hat is making a pretty piece of change off of us, and I understand this is largely true in most shops. Our hardware is primarily HP and IBM, who are making up their lost sales in Unix servers to us by selling us Intel based servers for Linux (and Windows, too). That pretty much leaves Sun out in the cold - we're not buying their proprietary servers much anymore, and they never gained a foothold in the commodity hardware market.

      --
      American Third Position
      Finally, a real choice!
  3. Re:I don't buy it. by spun · · Score: 5, Funny

    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
  4. Re:To be fair... by 1729 · · Score: 5, Informative

    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.

  5. Re:Because they haven't released an OS in 3 years by h4rr4r · · Score: 5, Informative

    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.

  6. Re:To be expected, really. by Anonymous Coward · · Score: 4, Interesting

    Their competition won't be windows so much as oracle. Oracle will soon own solaris and mysql. Rumor I've heard is they'll be pushing 3 distros: Linux + Mysql, Linux + Oracle (express or full), and Solaris + Oracle to blanket the LAMP and DB market. Obviously, there will still be plenty of lamp stacks backed by free distros but RHAT will have have to do something to differentiate.

  7. Re:Not that impressive by Jah-Wren+Ryel · · Score: 4, Insightful

    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.
  8. Re:Not that impressive by rahvin112 · · Score: 4, Insightful

    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.

  9. Re:Not Optional by ScytheBlade1 · · Score: 4, Informative

    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.