[Editor’s Note: This article, written by former Linux
Today Managing Editor Michael Hall for ServerWatch, had some
interesting things to say, so I’ll yield the platform this week to
him. -BKP]
By Michael Hall
ServerWatch
Enterprise UNIX Roundup
There’s a school of thought among long-time Linux watchers that
the real Holy Grail for most Linux companies isn’t the death of
Microsoft or even mere profitability, but salvation by buy out.
Pushing Linux in and of itself is a dead end, goes the theory.
The only hope these people really have is to 1) make a product so
good that enterprises cough up the dough on a yearly basis for
updates, or 2) be swallowed by IBM and become a Linux R&D
division for big iron.
This particular outlook won some water cooler bragging rights
this week, as the two most viable commercial Linux outfits, SUSE
(neé SuSE) and Red Hat announced acquisition by bigger fish
and formalized major business model shifts, respectively.
SUSE has an interesting background in the Linux space. Among
enthusiasts and desktop users, it enjoyed a following not unlike
our favorite college band: Popular among the cognoscenti and “big
in Europe,” but always an also-ran in the United States, trailing
in name recognition to the more popular and less tuned (by desktop
standards) Red Hat. Some of that may have been because the company
was as defiant as the GNU “copyleft” allowed it to be when it came
to giving away product: It followed the letter of the license on
releasing source code, but consistently dragged its feet on making
downloads of its latest releases available. Red Hat, in contrast,
has generally released its downloadable and retail versions
simultaneously.
Desktop popularity aside, SUSE’s real earning seemed to stem
from deals with IBM that involved tweaking Linux for big iron. IBM
S/390’s, for example. That relationship fueled much of the talk
about SUSE being an IBM acquisition candidate.
Come January 2004 (as has already been covered in
exhaustive detail), if all goes as planned, SUSE will be bought
out, if not by IBM, then perhaps by the next best thing: Novell
will do the acquiring, with part of its purchase underwritten by a
$50 million stock investment from IBM to ease the $210 million
price tag. Along with its recent focus on NetWare as a suite of
Linux services and the purchase
of Linux desktop company Ximian, Novell is now pretty much a
“Linux company.”
Time will tell whether Novell will be known as a company that
successfully navigated the perilous shoals of shedding its old,
tired identity as the company that Windows NT killed or, alé
Corel, did itself in chasing a Linux exit strategy that it didn’t
have the staying power to execute.
And SUSE?
It won’t be so bad to stay “popular in Europe,” where Linux and
open source software in general are riding a wave of deployments in
government, which has Microsoft and its proxies in the “Initiative
for Software Choice,” an organization founded to counter
pro-open-source legislation, feeling distinctly uncomfortable.
Novell took pains to point out that SUSE’s German headquarters will
remain intact. In the United States, where Novell still has
presence, albeit a diminished one over the past few years, SUSE has
as much of a chance as it did before, when Red Hat was holding it
to a sub-25 percent market share. Here, Novell’s marketing power
might even help.
In many ways, the acquisition represents a second
second chance for SUSE after it threw a lot of weight behind United
Linux in an effort to form a consortium with little purpose other
than subjecting Red Hat to death by dogpile.
And perhaps it was the resounding flopping noise United Linux
made that emboldened Red Hat to get around to telling everyone what
we’ve seen coming since early this year: Red Hat Linux as we know
it is dead. The company sent out a formal end-of-life announcement
to its customers on Monday. As of December 31, errata support for
versions 7.1, 7.2, 7.3, and 8.0 of its distribution will be
discontinued. Red Hat Linux 9 users get a reprieve until April 30
of next year.
While Red Hat will continue to contribute to the open source
Fedora Project, which
represents a more openly developed version of Red Hat Linux than
the company could get behind when its revenue hinged on shipping
shrinkwrap, the end-of-life announcement solidifies the
evolutionary process discussed two
weeks ago. Good or bad, the company is now committed to its
enterprise offerings.
The announcement received its share of dismayed squawks from
predictable parties, including customers that may have recently
invested in Red Hat Linux 9, which has been out for less than a
year. They’re receiving some salve for their burned noses in the
form of 50 percent discounts on Red Hat’s Enterprise Linux ES and
WS (Enterprise Server and Workstation offerings) for the next two
years. The products normally cost $349 and $179, respectively for
the “Basic Editions,” which puts the workstation offering at about
the same price point that Red Hat Linux 9 sold for on retail
shelves.
Less credible are the complaints of hobbyists who say this
represents some sort of betrayal on Red Hat’s part. We’ve said it
before and we’ll say it again: Red Hat’s “give away the razors
and the blades, and make money explaining how to work
them” business model was doomed. Red Hat “gives back to the
community” in ways other than free downloads, including its
employment of some big sticks in the Linux kernel developer world.
When we indulge our idealistic streak and consider Red Hat through
the eyes of an open source activist, we don’t see much to complain
about.
With their announcements this week, SUSE and Red Hat have neatly
encapsulated “the post-boom Linux company story.” One has found an
out in the form of acquisition, the other in going for broke on the
salable strength of its product.