Underexposed

Update: I added a lot more detail about Red Hat's ambitions and other moves.

Red Hat on Wednesday announced a significant departure from its current business plan, saying its flagship Linux product will be available on Amazon.com's Elastic Computing Cloud online service.

Previously, the Raleigh, N.C.-based company only sold its Red Hat Enterprise Linux product in the form of a support contract costing between $349 and $2,499 per year. But in a beta program beginning in the fourth quarter, the software will be available on Amazon's EC2 infrastructure, Red Hat said.

The move also signals a new phase in EC2. By using RHEL, a supported product for which numerous applications are certified, the online service looks more like a variation of an existing, established software product and less like a radical departure from how computing is typically performed today.

Currently, EC2, still in beta, is effectively a blank slate on which customers install and manage their own software.

The Amazon partnership was among a host of Red Hat announcements. In addition, the company upgraded its RHEL to version 5.1, including new virtualization abilities with Xen 3.1, announced an upcoming RHEL version geared for use embedded as a foundation for software companies' products, and declared an ambitious goal to conquer half the server market.

"We will more than double our market share to power more than 50 percent of the world's servers by 2015," said Paul Cormier, Red Hat's executive vice president for worldwide engineering. Part of that ambition will be supported by the promise that software partners won't have to recertify their software for the various RHEL versions--those running on regular servers, on EC2, or on the virtualization foundations from Red Hat, VMware, and Microsoft, Cormier added.

Pricing for the Red Hat EC2 option is variable--a classic example of the "pay as you go" philosophy that some prefer, because it ties expenses to actual use, though it can be less predictable. The service will cost $19 per month plus 21, 53, or 94 cents per hour, depending on computing and storage capacity, plus 11 cents per gigabyte transferred in and 19 cents per gigabyte transferred out.

Each computer being rented is actually a virtual machine, a slice of a physical server that's running several using virtualization software. The "small" RHEL instance offers 1.7GB of memory, 160GB of storage, and Amazon's virtual equivalent of one 32-bit processor core; "medium" bumps that to 7.5GB of memory, 850GB of storage, and two 64-bit cores; and "large" provides 15GB of memory, 1690GB of storage, and 4 64-bit cores.

Customers also can get more storage through use of Amazon's S3 storage service, which costs extra. "While the use of S3 is not mandatory for maintaining a working Red Hat Enterprise Linux cloud server, Red Hat recommends all customers manage their servers and maintain configurations within Amazon's S3 storage infrastructure," Red Hat said in a statement.

New Red Hat horizons
EC2 is just one new horizon Red Hat hopes to call its own turf. Another is the core business of VMware, the market leader for virtualization. The reason: the new version of RHEL comes with Xen 3.1, a significantly more mature virtualization foundation than the version that debuted with RHEL 5.0 earlier this year.

The new version, for example, enables "live migration," which lets software running in a virtual machine be moved, while running, from one physical computer to another. And with 3.1, Red Hat also is offering support for running Windows 2000, XP, Server 2003 and, when it ships, Server 2008.

"Customers can save $20,000 to $30,000 in licensing fees" compared with VMware, said Scott Crenshaw, vice president of Red Hat's enterprise Linux business. And now, many higher-end features available with VMware's Virtual Infrastructure product are free with RHEL: "High availability, clustering, failover, live migration, storage virtualization all are integrated into the core infrastructure," he said.

VMware has a major lead in the marketplace, not to mention more revenue and faster growth than Red Hat. The EMC subsidiary offers not just the basic virtualization but also many higher-level services: its own version of live migration, called VMotion; high availability to move or restart ailing virtual machines; and resource monitoring to ensure virtual machines don't max out their hardware or let idle servers be shut down.

Red Hat, in comparison, is just getting started with virtualization, though Crenshaw said the company is pleased with the accelerating pace of adoption. Customers are using Xen on 18,000 servers, he boasted. One is DreamWorks Animation, which endorsed the technology Wednesday.

Red Hat is cheaper, though, and customers don't have to worry about using two different management interfaces for controlling their servers, the company argued.

Virtual appliances
Virtualization has enabled a new form of software sales: virtual "appliances" that bundle software with an underlying operating system for quick installation on a virtual machine. VMware has been an aggressive evangelist of the approach, and now Red Hat is becoming more directly involved.

The company will offer a version of RHEL called the Red Hat Appliance Operating System in the first half of 2008 that software companies can use to build appliances, along with a software development kit to help build them, said Chief Technology Officer Brian Stevens.

The software companies themselves, which act in effect as RHEL resellers, will support the software for customers, but Red Hat will backstop the software companies with level-three support, Cormier said. The software companies will pay Red Hat, probably through a subscription model, that will include access to the Red Hat Network so customer software can be updated, Red Hat said.