Open Sources | Rodrigues & Urlocker » Red Hat isn't cutting prices, and here's why

October 27, 2006 | Comments: (0)

Red Hat isn't cutting prices, and here's why

TAGS: Open Source

Matthew Szulik is on the record today saying that Red Hat has no plans to cut its prices. Good for Red Hat. When you're already #1 in customer value two years running, a shot over the bow shouldn't lead to widespread panic.

Oracle claims to be offering for support for Red Hat Enterprise Linux. They're not. As Red Hat notes, and as even a cursory investigation would reveal, open source software is not about the bits. It's about the support and the innovation you put into the bits. That's what Red Hat charges for.

It's what Oracle can't replicate with a keynote and a few webpages. Oracle could support Linux - arguably very well. But Oracle didn't choose to support Linux, a technology. It announced that it is offering support for someone else's product, but in the process confused the old world definition of "product" (bits which we can charge big upfront license fees for, as Oracle does) for the new world's definition (support, RHN, etc., for which Red Hat earns its keep over time through a subscription).

That is, Oracle announced support for...Red Hat's support, thinking that it was announcing support for Red Hat's bits and bytes.

It's a bit like me saying I'm now offering support for IBM Global Services. Sure, I could try. I could "fork" those services. But would you buy them? Neither would I.

In like manner, Oracle can offer huge discounts on Red Hat Enterprise LInux - the bits and bytes. But it's hard to discount beyond what the discounts Red Hat already offers: 100%. How much lower than free can Oracle go?

No, Oracle tried to confuse the issue, or was simply confused. It can't support Red Hat Enterprise Linux, because really Red Hat's product is the service it puts into the kernel, both pre- and post-sale. Oracle can declare that it will answer the phone faster, but who cares? it won't (and can't) have the answers when you call? It can say that it's supporting Red Hat's...support, but it isn't.

Oracle is offering nothing with this move. But at least it's offering 50% off.

Posted by Matt Asay on October 27, 2006 04:55 PM

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