Oracle and Novell Linux: Caught between a Red Hat and a CentOS
Novell has been positioning itself as the Avis of Linux, a distant but gaining Red Hat competitor that "tries harder." Like Oracle, Novell argues that it can give customers Red Hat value at a lower price.
What, me worry?
It's true that adoption of unpaid Linux like CentOS is booming, and that this no-cost alternative to more expensive solutions like Red Hat is a real threat to Red Hat. This is no doubt why Red Hat has made "free-to-paid" a core element of its ongoing strategy, as related in its recent earnings call.
But it's a much bigger threat to Novell and Oracle, both of whom are trying to position themselves as cheaper alternatives to Red Hat Enterprise Linux.
If a customer really wants Red Hat at a lower price, they're not going to move to an incompatible distribution that may or may not run their applications properly. They're going to jump to CentOS, which is basically a carbon copy of RHEL, minus the trademarks (and price tag).
Oracle, for its part, is clearly not in the Linux market. It's in the market to eradicate Red Hat, so as to claim top-to-bottom control of its software stack. But even as Oracle tries to squeeze Red Hat into oblivion, CentOS provides an excellent hedge against commercial competition from Oracle (and Novell), making its pitch ring hollow.
CentOS: Red Hat's biggest annoyance and greatest friend?
It's not dissimilar to the role that piracy plays for protecting Microsoft's Windows dominance against Linux, especially in emerging markets. Quite possibly the worst thing that Microsoft could do, as IDC has also suggested, is to succeed in its anti-piracy efforts.
Were Microsoft to raise its pricing above $0.00 in such markets, suddenly Linux would look like a much better alternative.
Back to Novell and Oracle. It's not enough to try harder. Red Hat has created a dominant global brand that CIOs trust. It's not worth a few dollars here and there to disrupt that to shift to SUSE or Oracle Enterprise Linux.
Not when those CIOs can shave 100 percent of their RHEL subscription costs by moving to CentOS.
I know some CIOs who have, but they tend to be enterprises with lots of developers that are comfortable supporting themselves. Fortunately for Red Hat, few CIOs care to take that risk. Unfortunately for Novell and Oracle, those who do want to save all of their Linux subscription fees, not just some of them.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
What I don't follow is why you think there's no middle ground, no one interested in having an actual supported distribution yet open to a provider other than Red Hat. That's not our experience at all: we have lots of requests to support SUSE, Canonical, and other paid distributions (as well as many of the free ones beyond CentOS). CIOs seem just as able to see differences and choose favorites in this area as developers.
Enterprises want support. CentOS doesn't come with support. It's run by a group of volunteers without backing from a financially strong company (for indemnification, service agreements, etc.) And, CentOS isn't certified by major application vendors. Clearly, CentOS is useless for most enterprises.
But let's talk about why this article (again) misses the point. When CIOs talk about cost, they're talking about TCO for all of their environments (Linux, Windows, Mainframe, telecom, etc.)
If Oracle or Novell can provide streamlined support for both Linux and Windows at a lower combined TCO, that is where the value is. You don't have to pay $$ to support Red Hat and another $$ to support Windows. You get one set of unified tools to manage both, and most importantly, you can do it with fewer FTEs. *That's* where the real cost savings come from.
It's NOT about saving RHEL licensing fees, which is marginal anyway. It's about reducing your total support and management costs, throughout your enterprise.
Now having said all that, I don't think Novell nor Oracle will get too far in the enterprise. That's because the HPs and IBMs of the world can say "hey we'll support *everything* in your enterprise", from mobiles to mainframes, at a lower TCO and guaranteed SLAs. That's a much more compelling sell to CIOs than what Novell, Oracle, or Red Hat can provide by themselves.
Perhaps that explains why Oracle is going out of business. Or... wait; Oracle is doing fantastically.
Oracle is not in the least interested in erradicating Red Hat. Oracle simply wants all the money for the solutions they provide. They don't want to sell the Oracle software product to someone and then see the customer turn to a third party for OS support, so Oracle supports the OS themselves. This is arguably a great benefit to customers: Oracle is a one-stop shop for their customers. If this happens to eat into Red Hat's market share, that's just a coincidence.
http://openenterprisenews.com/analysis/how-badly-is-centos-hurting-red-hat.html
Matt, where exactly is the new fresh angle on the now 2+ year old talking point?
-jef
The other benefit is that if you start with CentOS and either can afford it or really want the support it should not be as big of a deal to move from CentOS to full-paid Red Hat compared to going from openSUSE to SLED/SLES. Only Ubuntu is going to be more seamless using, ironically, Red Hat's old distribution method.
At the end of the day the idea is to make sure you can get support when you need it.
> After CentOS's near-meltdown this summer, people are
> going to think twice about using it in a mission critical environment.
> ...
> Clearly, CentOS is useless for most enterprises.
Sorry -- No near meltdown, just a project working on infrastructure and organizational details, re-factoring when a former (and respected) member was not reachable after sustained efforts to contact him privately failed. As we said at the time -- 'not much to see here, move along'
Four to six million CentOS deployed units indicate that _some_ users find it useful. From observation, it is not the 'fanboy' wanting the latest and greatest, but rather sysadmins (and the CIO's they report to) who would rather get their real work done on a boring, predictable, long lived, and stable base; rather than mess with the platform it is provided on. The Red Hat (and implicitly the CentOS) life-cycle model seems to have carried the day in commercial (including Enterprise) *nix space
-- Russ herrold
When you yourself raised the prospect of CentOS being "killed", people are going to look elsewhere.
- by allanregistos October 16, 2009 4:54 PM PDT
- Quote: ". That's because the HPs and IBMs of the world can say "hey we'll support *everything* in your enterprise", from mobiles to mainframes, at a lower TCO and guaranteed SLAs."
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- by mbenedict October 16, 2009 5:42 PM PDT
- The fact is, should service providers like IBM fail to deliver services promised**, their clients have a viable recourse: take 'em to court until they remedy or compensate the situation. Should your "geek squad" fail to deliver services to your company, your company's shareholders have no recourse except to fire your *****. Unfortunately that doesn't remedy nor compensate the situation.
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(11 Comments)One of the agency in the Philippines (GSIS) claimed that IBM was unable to support them for the outages they experience of the IBM machines installed in the agency. This is after the typhon "ondoy"(local name) where most people _needs_ money from the agency. This is a critical time when companies must be true to their promises. IBM failed according to GSIS(as reported in RPN 9). I think that is what happened to companies who wants support almost everything.
CentOS is very valuable to us as a company, and CentOS is not useless in the enterprise as long as you have the geek squad. We use it for our mail server(Zimbra) and Vmware(vmware server). The only thing that may pose a threat is the power outage since we don't have the expensive UPS backup in house. We can just run 10 to 30 minutes not longer than that.
GSIS, by the way, chose to "dump" IBM for HP & Oracle. They didn't simply adopt unsupported solutions to save on some marginal licensing fees.
** In fairness, IBM claims that GSIS isn't one of their clients at all. Instead, they claim that GSIS had a contract with SAP and a local ISV, which delivered DB2 on an OEM basis. Therefore according to IBM, GSIS should have pursued any issues with SAP or the ISV and not with IBM. Furthermore, supposedly the "issue" was not a technical problem with IBM's software at all, but rather human error on the part of GSIS own employees.
I'm inclined to agree with IBM, and some may believe that GSIS is taking IBM to court in order to deflect public anger from it's own incompetence in processing emergency loans.