[linux-elitists] Red Hat borrows $500M

Jason Spence jspence@lightconsulting.com
Wed Jan 7 09:45:55 PST 2004

On Tue, Jan 06, 2004 at 11:43:40PM -0800, J. Paul Reed wrote: 
> On 07 Jan 2004 at 01:28:25, Brian McGroarty arranged the bits on my disk to say:
> > Red Hat hasn't yet established itself as a company that will always be
> > there for the customer. 
> ...
> > And dropping the desktop with their flamboyant "okay, we've been living a
> > lie -- take those boxes back to Windows" proclamation sure didn't help in
> > solidifying their image, either.
> Yeah... in fact, with many companies, it's done exactly the opposite. 

Well, you don't want them to ship something they aren't happy with, do

> We all spent hours telling the PHBs "yeah, this Linux-thing will save the
> company tons of money... it's free!" They went with RedHat because "RedHat
> = Linux" and "They provide support! And since we're used to M$'s shit
> breaking, we need support!"
> Now we all look like idiots because RedHat decided that the desktop was a
> worthless battle... right when it seemed they were starting to make
> inroads, too. And workstation is no longer "free." Oh no. It's $300/machine
> "free."

But if they don't charge for support (because it seems you believe it
is not needed), and they don't charge for a slick installer on
physical media in a box, then what will they charge for?

> That's one of the great things about open source, though... the fact that
> RedHat made such a tactical error as to piss off their unseen core
> customers (home users, hobbyists, and smaller companies) could be the
> beginning of the end for them... but since it *is* open source, we have to
> ask ourselves "Why do I care?"

Unseen core customers?  See, I dunno about that...

cus*tom*er n.
  1. One who collect customs; a toll gatherer. [Obs.]
  2. One who regularly or repeatedly makes purchases of a trader; a
     purchaser; a buyer.
  3. A person with whom a business house has dealings; as, the
     customers of a bank.

Purchase, eh?

pur*chase tr. v.
  1.  To obtain in exchange for money or its equivalent; buy.

I like to think of all the people who grabbed RedHat ISOs during the
good ol' days as RedHat's marketing department, not customers, but
that's just me.

> "Especially since you made me look like an idiot to my boss."

I'd like to make a few counter-points:

1) RedHat Enterprise Linux WS Basic costs $179 [1] for the box
   distribution, but the images can be installed on multiple systems.
   The total cost is (179 / n), where n is the number of systems in
   the deployment.  This is supposed to be renewed annually per system
   (cost = 179 * n), but if you have more labor than money available
   there are ways around it.

2) RedHat Network, the subscription based update service, is included
   in this cost per system.  This allows RedHat to bridge the revenue
   gap between major releases and keep our favorite Linux community
   friends happily employed.

3) For some sites, using RedHat EL actually reduces support costs,
   allowing it to be cost-effective for them even at a higher price

[1] http://www.redhat.com/software/rhel/purchase/

 - Jason           Last known location:  1.3 miles northeast of Union City, CA

Put no trust in cryptic comments.

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