INDUSTRY ANALYSIS

Red Hat: Time for the Tar and Feathers?

On the road Tom he told me all about how it was reckoned I was murdered, and how pap disappeared, pretty soon, and didn’t come back no more, and what a stir there was when Jim run away; and I told Tom all about our Royal Nonesuch rapscallions, and as much of the raft-voyage as I had time to; and as we struck into the town and up through the middle of it — it was as much as half-after eight, then — here comes a raging rush of people, with torches, and an awful whooping and yelling, and banging tin pans and blowing horns; and we jumped to one side to let them go by; and as they went by, I see they had the king and the duke astraddle of a rail — that is, I knowed it was the king and the duke, though they was all over tar and feathers, and didn’t look like nothing in the world that was human — just looked like a couple of monstrous big soldier-plumes. Well, it made me sick to see it; and I was sorry for them poor pitiful rascals, it seemed like I couldn’t ever feel any hardness against them any more in the world. It was a dreadful thing to see. Human beings can be awful cruel to one another.

From: The Adventures of Huckleberry Finn

As con men these two pitiful rascals made their living by pretending to be what they were not, and then charging the gullible to share the illusion. A cynic might see parallels to Red Hat here: pretending to open source ideals while actually charging the MSCE community for the privilege of sharing the illusion.

The current management team at Red Hat has consistently been vocal about its agenda. The road to Microsoft, Open Source Affairs Vice President Michael Tieman has said many times, goes through Mountain View first — meaning that he wants to take over the “Unix” server base before taking on Microsoft’s desktop. Lately, however, Sun has been firing back. Here’s an excerpt from a recent report inthe Boston Globe:

I just don’t love Red Hat.”

Sun Microsystems was one of the dominant computer companies of the late-1990s Internet boom. But it has lost nearly US$4.5 billion over the past three years, hammered by an industrywide slump and growing competition from Linux.

Most Sun computers run Solaris, the company’s own version of the high-powered Unix operating system. But many Solaris users have been moving to Linux to save money. Linux is an ”open source” operating system that was created by a worldwide network of volunteers and can be modified by those who use it. Linux, like other open source products, can be obtained free of charge.

But [Sun Chairman and CEO Scott] McNealy says switching to Red Hat Linux is a false economy. Even though Linux itself is free, Red Hat charges high prices for customer service and support. ”You can run Solaris for 20 to 30 percent of the cost of ‘free,’ ” McNealy said.

McNealy stressed that Linux wasn’t the enemy. He noted that Sun is one of the leading contributors of free software to open-source projects, that Sun sells computers equipped with Linux, and that the company plans to release the next version of Solaris as an open-source product. ”Open source is not a threat,” he said, just Red Hat. ”They’re a competitor,” McNealy said, ”and we’re going to blow them out of the water if we can.”

McNealy stressed that Linux wasn’t the enemy. He noted that Sun is one of the leading contributors of free software to open source projects, that Sun sells computers equipped with Linux and that the company plans to release the next version of Solaris as an open source product. ”Open source is not a threat,” he said, just Red Hat. ”They’re a competitor,” McNealy said, ”and we’re going to blow them out of the water if we can.”

Hatchet Job

As an aside, this is actually an expert hatchet job. Notice how the quotations attributed to McNealy are distributed to make the reporter’s objective voice — Sun has been “hammered,” Solaris users are moving to Linux, and so on — more credible. Less subtly, Sun is discussed in the past tense (“was one of the dominant computer companies of the late-1990”), McNealy is presented as lying: “[Linux is] … free of charge … but McNealy says switching to Red Hat Linux is a false economy,” and the closing sound bite has been carefully chosen to make him sound like an impotent braggart: “blow them out of the water, if we can.”

Years ago everybody I knew who tried Linux also tried Red Hat, but then Red Hat began to turn itself into the new Microsoft and people able to make their own decisions promptly switched to SuSE. Today, most have moved on to Debian — my own favorite after Caldera became too hot to mention.

With each such transition, however, some people remained behind to form a core group of loyalists whose needs and expectations then drove the marketing and technology evolution of their chosen companies.

In Red Hat’s case, that group appears to have been dominated by the people who hate Unix but are forced to use it anyway. Red Hat Enterprise server, for example, is a common choice among data processing professionals whose IBM loyalties led them first to HP-UX as a way of avoiding having to deal with DEC and then to Windows NT, only to now find one dead-ended and the other worthless. In this community, high support costs are the norm, right alongside a vocal commitment to words like “Enterprise” and a high tolerance for failing software development projects.

Cost Consideration

The result is what we see: Red Hat’s support fees are in line with Microsoft’s and the sales focus is on tools and “Enterprise” servers — even on uni-processor PCs. It’s not unusual, therefore, to see a business with a hundred or more Red Hat servers in rack mounts, each running one application on the NT model, and each with full support at over US$2,499 per year. McNealy’s quite right: those people could run Solaris (SPARC hardware included) for 20 to 30 percent of the support costs to which the free Red Hat software commits them.

On the other hand the reality is that those people are nuts. The right thing to do is to abandon the Windows model, run multiple applications on each machine, and only buy support for the unit used by the systems administrator for testing and debugging. That way you consolidate the hardware while minimizing total support costs — going from, for example, 100 servers at $249,900 per year to 35 unsupported copies and one support contract at $2,499.

Do that, and McNealy’s wrong. But of course Red Hat’s community generally doesn’t do that — because those who knew enough to understand that Unix software support contracts extend the administrator’s abilities and not the system license also knew enough to have switched to Debian or Solaris long ago.

As a result Red Hat’s customer base is more and more becoming a self referencing community that sells itself Unix by attacking Unix and reinforces that perception by making management, and thus shareholders, pay Microsoft’s license and support rates for a free product.

Unix Market

Personally, I think Huck’s tarry rascals would have approved, but the odd thing is that I do too, because Red Hat is growing the market for Unix while taking little, if anything, away from Sun.

Although I’m sure McNealy and Tieman never said anything of the kind, I’m reminded of another line from Huckleberry Finn, something the Duke says just after meeting the King for the first time:

“Old man,” said the young one, “I reckon we might double-team it together; what do you think?” (Chapter 19)

Sports teams play this game all the time. Fanning the embers of an intercity rivalry between cities like Edmonton and Calgary into flame (for example: What’s the only good thing to come out of Calgary? Highway 2 North.) sells seats for both “our” Eskimos and “their” Stampeders, even though, in reality (I think), most of the players on both teams are American.

So does Sun really compete with Red Hat? I don’t think so. In the first place Sun will cheerfully sell you Red Hat Linux for anywhere from $299 to $2,499, and in the second, people who pick Red Hat on x86 usually aren’t ready for Solaris anyway.

The real rivalry is between Sun and IBM, with the latter trying to use Linux as a competitive tool to leverage services sales and which is far more affected by Red Hat’s Microsoft replacement pricing than Sun. From IBM’s perspective, Red Hat’s success comes from poaching on their territory, but Sun’s senior people probably see Red Hat’s customer base more as a kind of farm team for downstream Solaris sales then as a competitor for the current revenue dollar.


Paul Murphy, a LinuxInsider columnist, wrote and published The Unix Guide to Defenestration. Murphy is a 20-year veteran of the IT consulting industry, specializing in Unix and Unix-related management issues.


4 Comments

  • The more I read this column, the more I am awaiting the next one.
    But one thing about RedHat and the others linux vendors : They can’t recommend what Paul advises. They need to grow and failing that they will be blown out the water if not by SUN, by somebody else.
    The gullible ones are the only culprit. It’s your job in IT to test and experiment, especially when you can do that at little cost. If you go with Linux without knowing why, then you are a potential client the smartest suit. People in the business of improving your bottom line are consultants, not vendors and RedHat is a vendor.
    SUN has been selling the same lie. I work in organisation that typically buy big SUN iron and associated maintenance without knowing for sure why. Where I work now, UNIX machines are up for so long that they decided to reboot them regularly, just to make sure that no settings modification made recovery a problem !
    There is a systemic failire in IT to look at what organisations pay for and for how much. That’s how NT made its way in the server room, replacing VAX and other machines, just because the email client was graphical ….
    I don’t see why RedHat should refrain

  • Your article is misinformed and misleading on almost every single point. It is hard to choose where to start picking it apart.
    RedHat has an ongoing tradition of generous contributions to the Open Source community. *Every* software product that is owned and distributed by RedHat is GPL’d! This continues, they haven’t privatized anything. RedHat has developed or purchased many of these distributed products, such as anaconda, rpm, GFS, cygwin, eCos and the Netscape Directory Services. Those things wouldn’t exist without RedHat.
    RedHat has over the years paid the salaries of hundreds of devlopers and every line of code that those developers have distributed has been GPL’d. This continues, it hasn’t stopped. Alan Cox was employed by RedHat for years and allowed to work on the Linux Kernel and Havoc Pennington was (is?) also. You say that Redhat is a "pretender" in the Open Source world?
    But then you go on to say that people should use SUN software, none of which is ‘truly’ OpenSource, (in the spirit of the GPL) even when they do show you the some of the source code. Solaris is not free to modify and redistribute, port to other architectures, bind into my own applications. I am not freely licensed to use Solaris with anything other than the hardware I buy from SUN or the license grant (if I buy a Solaris License sans hardware).
    RedHat is not charging anyone for having, installing or using RedHat Enterprise Linux.
    (see http://www.redhat.com/advice/ask_shadowman_may02.h tml )
    Have you read the license that comes with RedHat enterprise Linux CD’s? (it is published on their website) The License says that the content of all the packages on the CD (and the CD compilations themselves) are GPL’d except for a few 3rd party packages (such as IBM’s JDK). These 3rd party packagas are not critical or even important to the system at all. Of course "RedHat" and the logos are trademarks. If you remove the trademarks there is nothing stoping you from creating your own distribution that is the same as RHEL and giving it away for free or using it as much as you want.
    See http://whiteboxlinux.org/
    This group is doing exactly as I have described.
    What RedHat charges for is ‘support & services’ such as their RHN network. They provide all the same packages (source RPMS) on their public FTP site for free, they just don’t provide free access to their enterprise system patch management system and phone/e-mail support. Their documentation, knowledge bases and such are all available for free on the web as well.
    RedHat has filled a necessary market niche. I agree with you that it may be misguided, but there are many IS/IT managements who won’t support installation of a OS/apps that aren’t backed by an expensive/pretentious/professional appearing organization. RedHat fills that niche. RedHat has a fixed release and support cycle for versions of their Enterprise Linux product. This allows 3rd party software vendors to gather around a stable platform and do development/documentation/QA on a stable platform target. Oracle, Veritas, BEA’s Weblogic, Remedy, Netcool, Lotus Notes, DB2, SAP etc… are large enterprise software suites that can be "certified" for a stable (non-moving) well documented OS platform.
    RedHat has provided their certification labs. And I can now get hardware/OS/software stack that is all certified by their respected vendors so that I know I have a supported platform.
    Then you compare one of the highest prices for RedHat Enterprise Linux with the cost of Microsoft licenses. You completely ignore the fact that on a Microsoft OS I will need to buy a volume manager/enterprise file system (if I have large storage requirements), I will have to buy a backup solution (like veritas netback or legato). I will have to buy a Virus Scanner license/subscription. I will likely need a firewall product as well. I may need client licenses for my Exchange mail service or IIS application service. I might need a Microsoft Office license or a photoshop license. If I need terminal services the license costs go up fast. SQL licenses…
    With Redhat Enterprise Linux I have all of these types of things either built in (one cost) or I don’t need them (such as the virus issue).
    Plus you pick $2,499/year as your cost to compare with. You can buy Redhat Edge Server Basic subscription for only $349 per year (and remember you don’t *have* to pay this to use, modify, redistribute the software as long as you want) you just can’t redistribute the content of the services/support. (i.e. redistribute or multiplex the RHN service or use one support contract for a whole data center of systems)
    The $2,499/year subscription cost is for PREMIUM ADVANCED SERVER which is for 24/7 phone support on hardware including IBM Power Architecture servers (up to 32 processors and 64GB RAM.)
    http://www-1.ibm.com/servers/eserver/iseries/hardware/medlarge/890/
    http://www.redhat.com/software/rhel/purchase/index.html
    I don’t think I have ever heard of a support contract for 24×7 phone support for an OS/firewall/web/application/DNS/directory/mail/news/file server with 32 processors for $2,499 from Microsoft or SUN? Am I wrong? Please show me! I have 8×5 support from SUN for a 4 CPU system at my office and it costs me more than that per year, and I am not entitled to see the source code, modify it, update it myself, incorporate it and build upon it into my own projects… My application stack and in-house developed/integrated system is locked into a product lifecycle that is driven by SUN and Oracle and Veritas.
    With the RedHat product I could choose to buy the Redhat support if I wanted to use their very nice web services to manage my software patches and server inventory.
    Or I could pay the basic rate for the minimum license necessary to support my hardware (as low as $179) and then not renew my subscription to support and RHN. I would still have unlimited access to the public ftp site where all the security/updates are released. I would just have to manage their building and installation myself. Or I could go really cheap and just use whitebox linux (or build it myself).
    These are all legal and open, RedHat couldn’t stop me even if they wanted too.
    I totally don’t understand your article. Your argument seems flat on every charge.

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