Analysis 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 virtualization - in response to increased competitive pressures from Oracle, Microsoft, Novell and Sun Microsystems.
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. New pricing can be found here.
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 realized 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 center.
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 claims 2,755 certified applications, up from 100 in 2003. The goal is to add more and in so doing draw more customers. As an added incentive to partners, Red Hat will share RHX revenues.
Importantly, Red Hat is not yet revealing the model by which revenue will be shared, indicating such crucial details are still being hashed out.
It is also unclear if any of Red Hat's partners from the dark world of closed-source software, notably Oracle, will be invited to join RHX. That depends on customer demand, Cormier said tactfully, although Red Hat will continue to work with Oracle.
But it is clear that Red Hat plans deep integration with some key closed source companies. Red Hat will rely on Samba, having hired three of Samba's five top maintainers including Samba Active Directory expert Andrew Bartlett, for the Red Hat directory to work with Microsoft's Active Directory for Windows. There are also plans to support Windows as a guest operating system on RHEL through an SLA commitment.
Oracle: the fight-back starts here
That brings us on to Oracle. Red Hat unveiled three so-called solutions encompassing storage, high-availability, systems management provisioning, identity management consulting and training for: data centers, database availability and high-performance computing. Red Hat will build systems for customers by drawing on its "domain expertise", according to chief technology officer Brian Stevens.
Red Hat has promised to save customers running clustered database installations like Oracle's Real Application Clusters (RAC) up to $200,000 per clustered database through a combination of RHEL's virtualization and dynamic resizing. Stevens claimed Red Hat is "leveling the playing field" against RAC.
Cool, but the stacks appear based more on a feeling that business must exist rather than any indication of actual opportunity. Red Hat does not have potential customers at this stage, and will rely on its own smarts rather those of integrators or consultants with proven skills in architecting systems serving datacenters, database or high-availability in highly be-spoke customer scenarios. Also, price has not been finalized, although these offerings will made available separately to the Red Hat subscription.
Red Hat is avoiding the price cuts feared by Wall Street to focus on value. Ironically, the price war could backfire on Oracle if Red Hat undercuts RAC. To be really effective, though, Red Hat still needs to go beyond competitive price and prove it's also got the credentials to build the kinds of clustered high-availability database or data warehouse systems that could really worry Oracle over the long term. ®