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Linux Business Businesses Red Hat Software

Red Hat CEO Says Economic Crisis Favors Open Source 191

Posted by kdawson
from the falling-tide-lifts-some-boats dept.
arashtamere writes "Red Hat president and CEO Jim Whitehurst predicts the enterprise open source software business will emerge from the economic crisis stronger than the proprietary market. 'I've had a couple of conversations with CIOs who said, "We're a Microsoft shop and we don't use any open source whatsoever, but we're already getting pressure to reduce our operating costs and we need you to help put together a plan for us to... use open source to reduce our costs." And we've had other customers literally looking at ripping and replacing WebLogic or WebSphere for JBoss ... I think we'll know in about six to nine months but there is no question that open source will come out of this in relatively better shape than our proprietary competitors,' he told Computerworld."
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Red Hat CEO Says Economic Crisis Favors Open Source

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  • by doktorjayd (469473) on Tuesday October 21, 2008 @07:30AM (#25451937) Homepage Journal

    as an engineer, with 10+ yrs in the industry, it still boggles the mind that closed source, proprietary software has such a stranglehold on the way businesses percieve 'value'.

    all too often, you see a business with a couple of it 'support' staff, maybe developers too, and someone has a day at the golf course and comes back with 'great news, we've managed to secure a long term contract with IBM...'

    i still loath cognos reportnet some 4 years after that guy came back from the golf course... whats that ? ibm bought cognos? greeeeeaaat!

  • Yes, but.... (Score:5, Insightful)

    by russlar (1122455) on Tuesday October 21, 2008 @07:33AM (#25451961)
    Has anybody checked the price of a Red Hat subscription lately? It ain't cheap. In fact, it's cheaper to get M$ bundled with a server than it is to get a one year Red Hat subscription, given that you need to renew (read= pay more $$$) each year, and Linux engineers can command more salary simply because there are fewer of them than there are Windows engineers (oxymoron, I know.).

    So yes, open-source as a "whole" (Articles of Confederation-type whole) will do well in tough economic times. If Red Hat wants in on this, they'll need to either lower their prices, or perhaps rethink they're "software as a service" model.
  • by rhsanborn (773855) on Tuesday October 21, 2008 @07:34AM (#25451973)
    Why is it that every story evaluating open source as a replacement for proprietary software starts with, "We want something cheaper." It's encouraging that people are comfortable with the reliability and features of OSS that they are comfortable putting businesses on it. But I would be concerned as an employee at these shops that management had fully evaluated the the needs of the company with respect to these packages. I've seen it a few times already at places where I've worked where a manager says, "This is cheaper, lets get this." and then doesn't realize that he needed someone who actually knew how to configure and manage things like the Linux box it was going to go on, etc.
  • Hi Peter, (Score:3, Insightful)

    by drunkennewfiemidget (712572) on Tuesday October 21, 2008 @07:34AM (#25451975) Homepage

    If you could just go ahead and convert all of those windows servers containing all of our business value into linux, that'd be great, mmmmk?

    Wouldn't it be cheaper for them to just stop upgrading to the latest and greatest and stick with what they've already got?

    (I am a linux fan and don't even run windows, it just seems like it'd be more money and less cost effective to start switching over just leaving things alone).

  • by doktorjayd (469473) on Tuesday October 21, 2008 @07:35AM (#25451981) Homepage Journal

    "This is cheaper, lets get this." and then doesn't realize that he needed someone who actually knew how to configure and manage things like the Linux box it was going to go on, etc.

    clearly you've never been somewhere that thought oracle was a good idea either...

  • Re:F/OSS BPMs (Score:3, Insightful)

    by morgan_greywolf (835522) on Tuesday October 21, 2008 @07:40AM (#25452027) Homepage Journal

    True. But Red Hat owns and supports JBoss, so, uh, what do you think they're going to be pushing to their enterprise customers?

  • by Anonymous Coward on Tuesday October 21, 2008 @07:43AM (#25452069)

    clearly you work in the public sector.

    As all managers only understand MONEY £££ $$$
    Does it do the job as cheaply as possible. And have They heard of it.

  • Re:Yes, but.... (Score:5, Insightful)

    by schon (31600) on Tuesday October 21, 2008 @08:13AM (#25452289)

    The subscription gets you any new release while you're subscribed. For Windows, you need to buy the new OS.

    Also, does a Windows subscription cover applications, or do you need to buy them (and support for them) separately?

    OB car analogy:

    It's like complaining that Red Hat's car costs more money than our MS's bare chassis. By the time you buy the MS Engine, MS Body, MS Wheels, MS Dashboard, MS Steering Wheel, etc, you end up paying more.

  • Re:Hi Peter, (Score:5, Insightful)

    by Bert64 (520050) <bert@s[ ]hdot.fi ... m ['las' in gap]> on Tuesday October 21, 2008 @08:17AM (#25452329) Homepage

    It would be cheaper to stay with what they already have, if only it were that easy...

    What happens when the current software reaches end of life? No patches, gaping security holes, nothing you can do about it... Have to upgrade, and possibly upgrade the hardware at the same time.

    What happens when you need to buy new or replacement hardware, the old software may not run on it, or its license may forbid it, meaning you now have some new and some old. Will you be able to run old alongside new, or will you start having compatibility problems that will force you to upgrade everything?

    If you move to open source, then future upgrades are a lot less painful, and its easier to retain older versions if you need to.

  • by NoNeeeed (157503) <slash@@@paulleader...co...uk> on Tuesday October 21, 2008 @08:17AM (#25452335) Homepage

    A lot of businesses may become increasingly unwilling to take risks, such as radically switching their technology.

    It's easy to take risks when business is good and there is plenty of cash sloshing around, but changing mission critical systems during bad economic periods will be seen as a bit too radical for many businesses.

    Having said that, I think smart businesses will be willing to make the change in many cases, especially when there is an OSS drop-in replacement, or where they are implementing a greenfield system.

    Paul

  • Re:Great, but... (Score:4, Insightful)

    by rohan972 (880586) on Tuesday October 21, 2008 @08:24AM (#25452429)

    Here is a situation where potentially thousands of people in the industry are going to be laid off because of this economic downturn, and all he can mention is how great it's going to be for OSS. I mean, I see his point and it may be a valid one, but he could be a little less gung-ho about it.

    Maybe he's hoping to hire some of those laid off workers. I do see your point though, I warned a relative about debt levels, houses, etc. Now I'm keeping really quiet about it. It's a really hard situation for people who didn't know how to evaluate the situation and went with what seemed like good advice because it was popular, only to be stung.

    That said, it has seemed obvious to me since reading the GPLv2 and seeing RedHat 7 where this thing (OSS) was going, and I've always been a bit surprised that most people don't see it too. Proprietary licences are designed to benefit the business, GPL is designed to benefit the user (and the users they distribute to, in perpetuity).

    How hard is it to work out that the software distributed in a manner that it benefits people (customers) will eventually gain dominance over software that is distributed in a manner that restricts customers for the benefit of the distributor? It is very unlikely that any other consideration will outweigh that in the long run although they often do in the short term. Tough economic times require purchases to be evaluated more thoroughly, so yes it is likely to benefit OSS.

    Likewise, how hard is it to figure out that if you allow corporations to produce the money supply out of thin air as loans that you are headed for financial collapse? Tighter regulation can do nothing to prevent the collapse of a financial system based on money that isn't worth anything.

  • by Anonymous Coward on Tuesday October 21, 2008 @08:42AM (#25452633)

    As a manager, with 20+ years in the industry, I have solved the mystery.

    "Golfware" is a term I invented to describe any combination of hardware and/or software that is purchased after a golf outing. Golf is powerful stuff; it enables non-technical people to make far-reaching technical decisions without spending the time to learn the details. You don't see open source on the golf course, and you have to understand open source to effectively utilize it.

    There are people who actually CREATE solutions and those who merely SHOP for them. The "creators" can only rise so high in the org chart. Inevitably, somebody with a non-CS background becomes the "creator's" boss. Such people are inevitably "shoppers".

  • Re:Yes, but.... (Score:3, Insightful)

    by Ed Avis (5917) <ed@membled.com> on Tuesday October 21, 2008 @08:51AM (#25452773) Homepage

    Does the cost of Microsoft Windows included with a server include a support subscription comparable to Red Hat's? If not, you are not comparing like with like.

    The fair comparison is: Windows licence plus support contract versus RHEL subscription,

    or: Windows licence with no support versus CentOS with no support.

  • by doktorjayd (469473) on Tuesday October 21, 2008 @08:59AM (#25452875) Homepage Journal

    almost.

    what they need to do is stop investing in vendor lockin.

    dont write that new app in dot net, do it in java with open source libs.

    dont use oracle/sql server, use postgres.

    with that first step tidied up, moving to an open source app server running on linux is very simple.

    or even moving to a closed source app server on linux. or aix. or solaris - your apps, if well written, will not need to change one bit.

  • Re:Yes, but.... (Score:3, Insightful)

    by Jeff Hornby (211519) <jthornby@sympaBO ... minus physicist> on Tuesday October 21, 2008 @09:01AM (#25452901) Homepage

    From what I've seen of Windows v. Linux shops, most shops that use Linux are still made up mostly of techies while Windows shops tend to be more of a mixed bag. When I've been in Windows shops where the majority of people are technical, the ratio of techs to users seem to be much higher: in fact, in the same ranges that you have quoted for Linux.

    What I'd like to see is a study comparing similar situations: average number of techs for businesses that are mostly technial or average number of techs for businesses that are mostly business (banks, insurance companies, manufacturing companies, etc.)

  • by Dan Ost (415913) on Tuesday October 21, 2008 @09:19AM (#25453147)

    Categorically speaking, you can't prove it.

    You can only prove it on a case by case basis. The exact same solution that saves one company money might cost another company more once you figure in required training, infrastructure, and staffing changes.

  • by mcgrew (92797) * on Tuesday October 21, 2008 @09:29AM (#25453257) Homepage Journal

    Where I work they buy recycled toner cartridges at half the price of new ones. The trouble is, you only get 1/10th as many pages before they peter out, and usually spill toner all over the inside of the printer, necessitating repairs.

    I've found that managers aren't very smart.

    There is argument about the cost of server software here, and seeing as how it's Red Hat speaking, that makes sense (I have no idea whether RH or MS server software is cheaper to run), but I don't understand why businesses are using Microsoft Office instead of Star Office. Is Star's spreadsheet really that bad? I haven't used it, I have no need for a spreadsheet at home and they use MS at work, but Star's word processor is as good for what I need (at home and work) as MS's.

    Nobody ever got fired for buying Microsoft.

  • Re:8 years ago.. (Score:3, Insightful)

    by RAMMS+EIN (578166) on Tuesday October 21, 2008 @09:30AM (#25453271) Homepage Journal

    ``what does ' vendor support' really get you?''

    Apparently, extra costs during normal operation, and extra costs in the event of failure, where you have to sit and wait for the support provider to diagnose the problem. And then maybe a free fix, if the provider decides that this is covered under their contract with you.

    By contrast, without the vendor support, you have no extra cost during normal operation, and some of the people who would, in the vendor support scenario, be twiddling thumbs during downtime would instead be diagnosing and fixing the problem. And then you would have to pay for the fix.

    There are a couple of scenarios where vendor support wins. For example, it could reduce your costs during normal operation, because your people don't need to be qualified to diagnose all possible problems - after all, that's what you have vendor support for. By the same token, if your people aren't as good at diagnosing problems as the vendor's people, vendor support may win in the event of problems, because they get diagnosed and fixed faster.

    On the other hand, I prefer just having people who know the system well enough that they can anticipate and diagnose problems, and have spare parts on hand to deal with hardware failures. That way, I don't have to depend on a vendor for support, I don't have to pay the vendor for it, and I don't have to wait for the vendor to provide the support.

  • Re:8 years ago.. (Score:2, Insightful)

    by Anonymous Coward on Tuesday October 21, 2008 @09:45AM (#25453461)

    CYA, somebody to blame, not my problem, etc.

  • And you just hit the nail on the head as to why it will be hard for MSFT shops to switch. MCSEs are cheap and plentiful,whereas Linux gurus are the opposite. So while they can run a free Linux server edition and save upfront costs the first time they have a serious breakdown it is going to cost them. And the support contracts for distros like Red Hat(last time I checked,its been a few years) will eat any savings that they had from switching. Hopefully as cheap Nettops and Netbooks get more popular more when learn Linux and go into the field,but ATM Linux Server admins certainly ain't cheap nor plentiful.

    Not trying to flame here,just stating what I've run into in the field. While there are some old Windows guys out there like me that love to learn new Operating Systems and all the little ins and outs,I have run into way too many MCSEs that if you took away WinServer would be as helpless as any non technical home user.

Nobody's gonna believe that computers are intelligent until they start coming in late and lying about it.

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