“In the past few weeks, all the Linux vendors shipped versions
of the OS based on the enhanced Linux 2.2 kernel. However, while
Caldera and SuSE have lowered their box prices, Red Hat is relying
on the brand name and the promise of more service support to push
its price up.”
“Red Hat is in a quandary because it cannot be the cheapest if
it wants to be taken seriously, said Mike Trupp, managing director
at U.K. Linux distributor Interactive Ideas. “A higher price
creates the perception of quality. Linux is also a difficult model
to make money from, so Red Hat is compressing margins and charging
higher service fees,” he said.”