Oracle last October started a feeding frenzy with the Unbreakable Linux Network (ULN) low-priced, update and patching service, which convinced skittish Wall Street investors the end was nigh as Red Hat would be forced to drop prices. Good-bye margins.
Market reaction was overdone: five months on and Red Hat concedes just two ULN defectors - one of which is Oracle's own OnDemand hosted business. So the vultures aren't exactly circling over Research Triangle Park, NC yet. But Red Hat knows it cannot stand still. Rather that wrestle with Oracle etc on price, it has picked a fight on "value" predicated on virtualized computing.
Red Hat will phase out its Enterprise Linux ES and AS offerings for RHEL 5, supporting up to four operating system guests, and the RHEL 5 "Advanced Platform", with storage, high availability and unlimited guests. Both are priced in line with ES and AS - $349 and $799 per system and $1,499 and $2,499 per system.
Red Hat is simply packing more into subscriptions, especially with Xen. The thinking is to bring virtualization to a mass market of customers and ISVs using a transparent price system that's easy to comprehend and doesn't act a barrier to adoption. "We wanted to get out of the situation of counting virtual guests... [customers] have enough difficulty counting physical systems and sockets," Paul Cormier, Red Hat EVP of engineering, said at today's RHEL launch in San Francisco.
With this in mind, Red Hat is revamping customer support and services, which in turn will help it cement its standing with the likes of MySQL and EnterpriseDB, to name but two. With partners such as these, Red Hat could mount a challenge for the database clustering market, a key plank of Oracle's business. Today the operative word is could. Red Hat's plans here have potential, but key details must be ironed out before it can realise them.
Red Hat is simplifying its support contract with a single service level agreement (SLA) across its Linux and JBoss middleware products. It also promises to solve all problems for its software when used with third-party hardware and software through the Red Hat co-operative resolution centre.
Ian Gray, vice president of global support services, promised: "If we ship the bits we support the bits. There are no loop holes or roadblocks, and you don't end up in conversations that end up: 'You are doing something with out product we don't support'."
That becomes important as Red Hat takes its first steps towards expanding the partner ecosystem. Red Hat Exchange (RHX), due sometime this year, will initially consist of 10 plus open source database, business applications and middleware vendors certified to Red Hat. Ignore the Web 2.0 fluff - Red Hat promises users rating favorite applications Amazon-style (this is business software, kids, not books) - RHX should make it easier for customers to find applications certified to Red Hat, help bring partners to market, and take Red Hat into new deployments.
Red Hat's Enterprise Linux (RHEL) 5 event Wednesday was something of a formality, given how long it has kept the world waiting for an update.
The real news today is in the services Red Hat plans around RHEL - particularly on virtualisation - in response to increased competitive pressures from Oracle, Microsoft, Novell and Sun Microsystems.