Red Hat: Economic crisis to boost open source

The global economic crisis would provide a boost for open-source software, Red Hat Chief Executive Jim Whitehurst claimed during a visit to Sydney this week.

Jim Whithurst

(Credit: Red Hat)

Whitehurst, who stopped over down under as part of a tour of the Asia-Pacific region, said in an interview with ZDNet Australia that the crisis would cause companies to consolidate their technology infrastructure and reduce spending.

"So the bad news is, when things get tight, people stop investing as much in the future," he said. "I would expect to see a slowdown in spending for new functionality." However, the CEO said this would cause more companies to consider open-source software as an option.

"What I do know is that open source will be in much better shape, coming out of the financial crisis than going into it, relative to our propriety competitors," he said.

Whitehurst said this is because open-source software provides a better economic model for creating software.

However, Kevin McIsaac, a Sydney-based analyst for Intelligent Business Research Services, said he does not expect the trend to increase the market share of companies such as Red Hat.

"Do I think the financial climate will drive people toward Red Hat? Not in any great way," he said. "Do I think a deteriorating economic environment is good for open source? Probably, (there will be) no great impact."

He explained that enterprise-level open-source software presents significant costs.

"A lot of my customers whom I have spoken to have said that the support costs are really quite high," McIsaac said. "A few people have commented on how much cheaper Oracle support for Red Hat Linux was than Red Hat itself."

McIssac suggested alternative ways of cutting costs: "One of the ways to cut your costs is simply to go and audit your licenses and get rid of the ones you don't need."

He also warned IT managers to expect budget cuts. "The CFO will be coming into the CIO's office and saying, 'We need to find a way to cut costs'; smart CIOs will already have a plan in their top drawer."

Alex Serpo of ZDNet Australia reported from Sydney.

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[Kwasiowusu]

Jim Whithurst is living in dreamland if he thinks the meltdown on Wall Street is going to lead to firms switching to Red Hat, when Red Hat as some of the highest TCO in the business,
Why should any company go through the huge expence of switching software to an inferior product,only to end up with higher overall costs, in staff training costs, technical support costs etc?

[boloIT]

Red Hat is reminiscing over the pop of the internet bubble, when they could walk through Sun's installed base replacing SPARC hardware. But now Solaris is open source, runs on more hardware platforms than Red Hat, costs less, has ZFS, DTrace (and even their SPARC hardware's pretty rockin') - and Red Hat's the high priced, low quality product. Jim ought'a worry about folks like me just consolidating back to Solaris...

[goodspeed8701]

Switching to Red Hat is like starting all over again, I so why should any company do that? On the short run switching will cost a company alot so it is a stupid idea. And more over the platform is not a easy to use platform, Staff training will cost alot.

[rklrkl]

One thing not mentioned in the article is that the credit crunch might make people think twice about the high cost of RHEL licenses and there's a ready-made free solution to replace them: CentOS. I suspect the only way we'll see an upsurge of RHEL license purchases in these tight times is if Red Hat actually lowered their prices (another idea not mentioned in the article), but I doubt that'll happen...

[Penguinisto]

Damn, y'all obviously have never run an RHEL shop...

Conceptually (and yes, legally), you only need one RHEL subscription - you turn that machine into a YUM server which all the other servers in turn patch off of. In practicality, you have extra licenses for different server types (e.g. CA servers), and one per mission-critical server, with all the not-so-critical machines patching fof the aforementioned home-brew YUM server. This of course assumes that you have a competent sysadmin.

So, err, no kids - RHEL licensing is certainly NOT expensive. Even if you ran the subs/server ratio at 1:1, you still pay way less than the monster cadre of CALs and other licenses required to run an all-Windows shop (in which case you have zero choice, and the BSA comes around to back up MSFT's demands that you pay every penny they think you owe them).

And yep - there's CentOS as well. :)