Red Hat Nears $1 Billion In Revenues, Closing Door On Clones

darthcamaro writes "Red Hat is almost at its goal of being the first pure-play open source vendor to hit $1 billion in Revenues. Red Hat reported its fiscal 2011 revenues this week which hit $909 million. Going forward, Red Hat has already taken steps to protect its business by changing the way it packages the Red Hat Enterprise Linux 6 kernel, making it harder for Oracle to clone. 'We are the top commercial contributor to most of the components of the Linux kernel and we think we have a lot of value and we want to make sure that, that value is recognized,' Red Hat CEO Jim Whitehurst said. 'In terms of competition, I don't think we necessarily saw anything different from before but I'd say better to close the barn door before the horses leave than afterwards.'"

Comments

Clones around, it's "enhanced clones" with trouble

[Anonymous Coward]

CentOS and Scientific Linux are still workable, it's the "enhanced clones" like Oracle and Novell that are cherrypicking RHEL's best customers and not giving back to the open source community with development in open source filesystems, X, authentication, and genuine hardware support that are messing up the business.

It's just too bad CentOS has lost its way with one of its developers, Johnny Hughes, telling people to not let the door hit them in the ass on the way out if they don't like how late everything is and then ignoring attempts to help. I just switched to Scientific Linux and and am quite happy.

Re:Oh no...

[Enderandrew]

CentOS is fine, because they're a 100% clone of Red Hat. Red Hat is putting their kernel patches together instead of separate. If you wanted to pick and choose which ones you used and make something different, it would be *slightly* more difficult. But considerate the last release was broken out. You know what they were starting with. Take a diff of the new patchset against the old one, and you should have an idea of what they've changed or added.

Re:Here goes last supporter of open-source

[Enderandrew]

Goatse, again.

Man, you are hilarious. No one in history has ever done that before. And you've created a couple accounts today just for that. When you look back on your life, I'm sure you'll feel content and fulfilled.

Re:What about CentOS?

[MrClever]

Under the GPL, my understanding is that RedHat need to make the source code available. This then allows CentOS to grab the source (RPMs) and re-badge/recompile it into a new distribution. So I don't think this distro is going away any time soon.

Re:What about CentOS?

[petermgreen]

Straight clones should still be possible as long as redhat complies with the GPL, the main things their changes to kernel packaging will do it

1: make it harder for unrelated distros (e.g. debian) to pigyback of redhats long term support work for kernel releases
2: make it harder for anyone else to provide high quality support for redhats patched kernels by making it much harder for them to answer the question when something goes wrong of "what did redhat change and why".

Re:What about CentOS?

[F.Ultra]

It means exactly nothing for CentOS. CentOS clones the RH kernel 100% anyways and is not interested in the individual patches. This is only to stop Oracle from selling support contracts for Red Hat installations. So it has exactly nothing to do with cloning and everything to do with support (in order to support RH systems, Oracle would need to know which patches RH has and more importantly: why).

Well that's ominous

[subreality]

TFA doesn't specify what this actually means, so let me speculate. They're not going to go closed-source; they'd be lynched. I think this is a reference to the fact that they're distributing their source prepatched now, to make it harder to just take their patches and apply them to other distros.

IMO that's kind of sleazy. They got where they are standing on the shoulders of giants. The deal was: here, have this free stuff, build on it, make money with it, but you have to keep giving back. And they got their value out of it, but now they're trying to give back only the minimum they're contractually obligated to do. It's legal and not purely evil, but still moderately scummy.

I don't really see it being that good for them, either. Oracle isn't going to have much trouble reverse-engineering the patches back out, but RedHat now ends up in a more difficult position: fewer of their patches will be incorporated upstream, so they have to spend more work porting them into each new release; they'll have less community review and bugfixes in their patches; and they're going to alienate the community.

On the other hand RH users won't end up in the worst scenario: stuck using RH's buggy crap and unable to do anything about it. The source will still be there; they can still dive in to figure out what's wrong and fix it instead of dealing with a black box. I know I had to more than a few times when supporting RHEL systems.

Re:Well that's ominous

[h4rr4r]

RedHat employs Kernel devs, their patches go directly into upstream. This is for patches that will never make it into upstream for that kernel. Basically all the stuff RedHat backports to the old crusty kernels they use.

Re:Well that's ominous

[Trufagus]

As far as I can tell RH does give back. They give back a lot. And it must get kind'of annoying for them that other companies - some of whom give back nothing - copy RH Linux and significantly undermine RH's ability to earn revenue from their distro.

There are tons of companies out there that violate the GPL, give nothing back, or even actively undermine open source. I would suggest that your disapproval is better directed at them.

Re:Well that's ominous

[kmdrtako]

...fewer of their patches will be incorporated upstream, so they have to spend more work porting them into each new release; they'll have less community review and bugfixes in their patches; and they're going to alienate the community.

I guess it's not well known, even though it's not a secret. Red Hat pushes their fixes upstream first. After, and only after, they are accepted upstream are they then incorporated into the RHEL kernel.

Re:Well that's ominous

[Kjella]

I don't really see it being that good for them, either. Oracle isn't going to have much trouble reverse-engineering the patches back out, but RedHat now ends up in a more difficult position: fewer of their patches will be incorporated upstream, so they have to spend more work porting them into each new release; they'll have less community review and bugfixes in their patches; and they're going to alienate the community.

I very much doubt Red Hat has any plans to change the way they work on the kernel master branch. This seems to be about their cherrypicking and backporting of patches to RHEL kernels. They want other distros - particularly Oracle it seems - to either do that work themselves or admit they are just rebranding Red Hat's work. For example in that big mega-patch they can simply add a few whitespace changes, if the same changes show up in Unbreakable Linux you know they started with the Red Hat kernel and worked from there. To be honest, I'm somewhat ambivalent about the whole thing. Making it a bit harder to cooperate is bad but making sure credit goes where credit is due is important so that people do the "invisible" work too.

Do not panic

[stikves]

I believe they have no beef against CentOS, actually I've seen at least one Red Hat employee encouraging the use of CentOS, since Red Had is the "de facto upgrade path" (not the exact words, but something along this way). So you freely enlarge the customer base, which will go to Red Hat when they need higher level commercial support. And for the free ones, even Microsoft has recognized they cannot sell to students, and are giving away the software anyways.

However Oracle is another deal. They just slap Oracle logo on Red Hat, do not acknowledge the source, and sell is as "unbreakable Linux". This would make a regular person ashamed of himself. They benefit a lot from open source but not giving back much in return. Do not start me with what they're doing to Solaris, Java, and OpenOffice...

So I'm with Red Hat on this one, at least until they do something directly bad to CentOS.

Re:Diff?

[Chris Burke]

That only gives you the patch broken up in space, not in time.

The idea is that Red Hat has patches for specific issues that are developed at different points in time. These patches may modify the same files as previous ones, or even the same blocks of code. By having all patches applied at once, the singular diff does not tell you which component of the patch fixed which issue.

This is really only relevant for providing commercial support. Previously, by having patches associated with known issues applied sequentially, it was much easier for another company to say "Oh you're having Issue X? Well Patch Y will fix it." Now their options are to reverse-engineer the monolithic .diff to find the part that fixes a specific issue, or tell their customers they have to apply the entire patch. Again, that's not something you'd care about if you're a desktop end-user, but in a corporate IT environment it makes a difference.

Re:LOL, people still use Linux?

[JonJ]

Why don't you last 3 linux users just swallow your pride and buy a mac like everyone else with more than 2 brain cells has done in the last few years?

I know you're just a troll but I can't resist. First of all, Linux and RHEL in particular, runs on actual servers. You know, those computers Apple slowly are phasing out? Xserve is gone, and Mac Pro server is soon to follow. And, Linux pisses on Mac OS X when it comes to market share on servers. Lastly, it's Mac users that are used to swallow other guys 'pride', so just stick to what you're best at: Sucking cock.

Scientific Linux 6

[KainX]

Scientific Linux 6 is already out. See http://ftp1.scientificlinux.org/linux/scientific/6.0/x86_64/os/sl-release-notes-6.0.html for their detailed release notes. If there was any doubt in your mind that the direct rebuild projects are unaffected by this move, there shouldn't be any longer.

It's pretty clear they're trying very hard this time around to stay in lock-step with upstream (what they call TUV and what CentOS calls PNAELV) and add fewer packages into the mix directly. They're also funded to do this work full-time by the US government, and since many universities and national labs rely on SL, it's not going away any time soon.

If you've never tried it before, I encourage you to do so. To quote the old tagline, it's already ready already.

Scummy is taking without giving back

[msobkow]

If you want scummy, look to companies like Oracle which just take, repackage, and rarely give back. They're the real problem, not RedHat.

RedHat's patches still get submitted upstream for inclusion in the main kernel, which very often does happen.

I have no sympathy whatsoever for leeches that were taking RedHat patches and rolling their own distributions without contributing enough back on their own.

I fail to see how this affects seperate distros like Debian, which aren't based on RedHat-patched source in the first place.

Red Hat Did 12.8% of the 2.6.20 Kernel

[seifried]

http://lwn.net/Articles/222773/. Red Hat plays very well with others. Part of the problem is the logistics, with Git and new Kernel development you're looking at literally thousands of source code patches (which would make for a completely unwieldy SPEC file) because Red Hat back ports stuff to keep a stable Kernel in the Enterprise Linux..

Re:Clones around, it's "enhanced clones" with trou

[Anonymous Coward]

Take a look at Novell's "RHEL support" offering. It's turned out to be complete crap, repackaging RHEL packages and alleging to offer one-stop support for SuSE customers, and blaming any problems on RHEL to convince customers to switch to SuSE.

http://www.novell.com/promo/suse/free-30days-expanded-support.html

It's complete bait and switch.

Re:Clones around, it's "enhanced clones" with trou

[larry bagina]

oracle is funding btrfs development.

Re:Clones around, it's "enhanced clones" with trou

[somenickname]

I'm really surprised that this comment was modded up. Oracle is responsible for btrfs (negating the "filesystems" argument), Novell was the catalyst for the modern linux composited desktop with compiz/Xgl (negating the X argument), and if I thought about it for more than 10 seconds, I'm sure I could come up with a shitload of other examples where these two companies that you've "cherrypicked" have been a driving force for good in the linux world. I do agree with your sentiment but, you sound bitter for these companies not having contributed to technologies that you don't realise you are using. But, most likely, the have. And in a big way. I'm all for hating companies like Oracle but, hate them for the right reasons.

Not good for the future of Linux

[2Bits]

If every distro is doing the same thing, this is not going to be very good for the future of Linux. Engineers at every distro are going to waste a lot time trying to figure what other distros had been patching, which part of the code had been changed while a specific issue was fixed, etc. Everyone is going to end up wasting a lot of time, and creating a lot of confusion.

Even though Linux distros are quite fragmented, but the current kernel development has been working quite well, because every distro is playing by the rule (more or less), which is quite transparent. Now, with this kind of one time big change by RH, even though you can still diff on all the source codes, it's not going to be easy to figure what has bee done (and why). And I think it's going to trigger other distros to behave similarly.

And it will be even harder for the users. As a user, if we have in-house-built applications that rely on specific version of a library or module, we might not want to have a giant patch on basically everything, we probably want only small, concise, specific patch for some critical security problems. I'm starting to wonder how are we going to manage that.

Re:What about CentOS?

[doomy]

Straight clones should still be possible as long as redhat complies with the GPL, the main things their changes to kernel packaging will do it

1: make it harder for unrelated distros (e.g. debian) to pigyback of redhats long term support work for kernel releases 2: make it harder for anyone else to provide high quality support for redhats patched kernels by making it much harder for them to answer the question when something goes wrong of "what did redhat change and why".

Debian does not use Redhat kernels. Two different distributions, packing systems and philosophies.

Re:Diff?

[Burdell]

The only "downstream" of RHEL that is significantly affected is Oracle, a company that rebuilds RHEL, sells it as their own "Unbreakable Linux", and then tells database customers that they really shouldn't run RHEL, they should run Unbreakable instead. A bunch of those customers run Oracle DB on RHEL from when Oracle was a Red Hat partner (before they started trying to poach the big DB customers). Oracle does much less for Linux (and Open Source in general) than Red Hat. Oracle throws a little bit of code over the wall when they have to, while Red Hat has bought other companies closed-source software and Open Sourced it.

I haven't looked yet (because I rarely need to see individual patches; I mostly just care about the end result), but Red Hat has said that customers will have access to the patch information, so cutting Red Hat out because they restrict that would be dumb (since as a customer you'd get it anyway). A lot of work in making the Linux kernel "enterprise-ready" has been (and continues to be) done by Red Hat.

Basically, Red Hat forks the kernel for each major RHEL release and then maintains it on their own. They backport patches from upstream as well as develop patches for their kernel (which they submit upstream). Do you think LibreOffice should be required to distribute every individual patch they've made to OpenOffice, or X.org vs. XFree86?

Re:Red Hat certification classes cost a small fort

[atomic-penguin]

If you round off their 2010 income numbers, subscription income totals to $639 million (85.3%), and training service income totals to $110 million (14.6%). That is all on page 40 of their 2010 Annual SEC (10-K) filing. The subscriptions had a 93% profit margin, and the training had a 36% profit margin this year. Which makes sense, I imagine training services cost quite a bit, you would probably have equipment and training material costs, as well as trainer's salaries. Then, at least some of the time, there would be travel and hotel costs incurred for the trainers themselves, anytime they are training groups.

According to page 48 of the same report, they spent $272 on sales and marketing, which the fancy training mailer pamphlets would fall under. However, that would also include expenses from sponsoring Open Source conferences under the same line item (its not all wasted on those fancy pamphlets).

Research and Development I imagine covers salaries for Kernel and subsystem developers. R&D costs total $148 million. Administrative costs were $104 million. According to the 10-K report, they have 3,000 employees globally.

Total operating expense for 2010 was $534 million, once you have tacked on taxes the Net income comes to $87 million.

There is a lot of boring stuff in SEC filings, most always something interesting to learn from them though. If you really want to find out what a company is all about, there are some interesting details, a lot of it is in there. It explains in brief detail what each line item in the Balance Sheets and Income Statements actually mean in mostly plain English. Plus, the executive summary gives you some insight into their management's frame of mind, business model, and strategies.

Re:Diff?

[Xtifr]

Red Hat has said that customers will have access to the patch information

So what's to stop Oracle from becoming a customer? :)

Re:What about CentOS?

[Yuioup]

Slashdot: The only place where guys brag about having something SMALLER than the other.

Re:Clones around, it's "enhanced clones" with trou

[_Shad0w_]

I think the bit of Oracle Linux which bemused me was the fact that installing Oracle 11g on it is is still non-trivial; it requires you to install a bunch of packages and tweak kernel settings. If you're going to distribute your own brand of Linux, you could at least have an installer option for "This is going to be an Oracle RDBMS server, please install everything I need and configure the kernel as needed". Giving you a script to run as root part way through the RDBMS install process doesn't really cut it.

Re:Clones around, it's "enhanced clones" with trou

[McKing]

Redhat is allowed to do exactly what they are doing. Nothing in the GPL requires them to make their changes available upstream (although they usually do), it requires them to make any changes available to their customers. They still release their changes to the kernel source code, but they changed the way those changes are distributed to their customers.

They used to make these changes available as a patch set that could be applied to the vanilla source from kernel.org. "Enhancers" like Oracle and others would take the vanilla source, cherry pick the patches that they wanted to apply out of Redhat's patch set, and compile the kernel, possibly adding in their own patches. Now Redhat is making the changes available in a single large pre-patched tarball, which means that if Oracle doesn't want to apply all of the patches, then they have to hunt down the changes themselves which is more time consuming and error-prone.

Say Redhat comes up with a patch that tweaks the filesystem code in a way that in some cases makes an Oracle DB 10% slower. In the past, Oracle would just apply all RH patches except that one. Now they have to take the vanilla source, diff it against Redhat's patched source, hunt down all the changes related to that filesystem patch, back those changes out manually, and hope that they got it right.