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Dell Calls For Red Hat To Lower Prices 526

VaultX points to an article on CNET (linked below), writing "According to Dell, Red Hat needs to lower pricing. 'We believe Red Hat Enterprise Linux 3, for the small and medium-sized business market, was out of the price range of these customers.' With Dell's strong presence in the Linux server market, Red Hat may want to listen."
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Dell Calls For Red Hat To Lower Prices

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  • by Anonymous Coward on Tuesday December 07, 2004 @10:30PM (#11027708)
    'We believe the Ferrari F430 Spider, for the small and medium-sized automotive market, was out of the price range of Mr. Coward.' With Coward's strong presence in the local Ferrari dealership, Ferrari SpA may want to listen.
    • by FatherOfONe ( 515801 ) on Wednesday December 08, 2004 @10:45AM (#11031704)
      To continue your example... the Anonymous Coward can now buy a Jaguar XJR-15, Viper SRT/10,Lamborghini Diablo and all other top sports cars at 1/4 the price of a Ferrari F430. Not to mention that you CAN'T BUY THE FERRARI, you can only LEASE IT. With all other car companies you can buy the car.

      So in this case the dealerships are saying that Ferrari needs to lower it's prices to be competitive. Ferrari could ignor its' dealerships and see how it goes, or they could listen.

      RedHat is a fool to belive their competition is Sun, and as such they charge what they do. Their real focus should be on Windows servers, but their upper management has become greedy and stupid.

      Now the other issue is the HUGE price differences that have occured in the last three years.

      3 years ago. RedHat 7.1 was ~$60. You load it on as many machines as you wanted for no additional cost. You could also pay for support on a per server basis.

      1 year ago. RedHat ES 3.x for X86-64 was $2,500 minimum a year per server. If you did not renew your license, you were NOT allowed to run the server.

      Today - RedHat ES 3.x for X86-64 is $350 a year per server. Again, you must pay per server EVERY year.

      So using your example. Ferrari releases the F40 for say $30,000. Then next year releases basically the same car for say $300,000/year lease. Then the next year releases if for say $60,000/year lease. All this while their management seems hell bent on taking down Leblanc (2% market of high performance sports cars), while Porche owns the vast majority of the high performance sports car world, and they don't force people to lease. So to continue this example more... Lets say Porche isn't as fast, and can't brake quite as good.... but they are working on it, and have enormous resources, while Ferrari has about 1/50th the resources as Porche.

      NOTE: The car percentages are just examples, not real world :-) I personally love Ferrari.

      I for one would love to see Dell start pushing SuSe more, or ANY OTHER DISTRO.

      My last complaint is this.

      RedHat does not do the following:
      1. Code a majority of Apache.
      2. Code a majority of the Kernel
      3. Code a majority of KDE or GNOME
      4. Code a majority of TCP/IP stack
      5. Code a majority of FTP/DNS/SAMBA servers
      6. Code a majority of SSH
      7. Code a JVM for Linux.

      They just take what other people do, build a good installer, and make sure that everything works well together and make a good update program. Granted that is some significant work, but it doesn't compare at all to doing all that development in house. So why do they charge so much?

      The good news is that there is competition out there, and this will balance itself out. I believe it was SuSe alone that forced RedHat to lower it's X86-64 prices.

      I believe that RedHat should release a version of their product without support that you own, not lease for $350. That would get you one year of updates and can be loaded on as many machines as you want, however to get updates on those other machines would cost you $75/year per machine.
      Again you would OWN the product, not lease it.

  • by Facekhan ( 445017 ) on Tuesday December 07, 2004 @10:31PM (#11027716)
    The prices are a little bit on the high side, but you are buying support not the software for the most part and they are certainly not higher that Windows Server 2003 which they are setup to compete with.

    RHS 3 is a pretty solid server IMHO, after using it for a few months on a web server and finding it far superior and simpler to manage than the Solaris box the company has its other website on.
    • by Anonymous Coward
      A bit of Sun bashing, and voilá, instant karma.

    • Nothing beats my SPARC 10, but RHEL3 is very close and a lot cheaper.
    • Speaking of Redhat support how is it? I've used Redhat Enterprise Server before, but never had a reason to call their tech support line. Only reason I reccomended it to the client was that he wanted something that had support. Which of course he never used either(Just called me).
      • by bill_mcgonigle ( 4333 ) * on Wednesday December 08, 2004 @12:15AM (#11028683) Homepage Journal
        Speaking of Redhat support how is it? I've used Redhat Enterprise Server before, but never had a reason to call their tech support line. Only reason I reccomended it to the client was that he wanted something that had support. Which of course he never used either(Just called me).

        That describes my situation six months ago exactly. Then I had a problem with up2date.

        So I called RedHat for the first time in the decade I've been using it. I found out:
        • They won't help you if this is an upgrade install. They offer to help you if you reformat your drive and install fresh. (note: their installer leaves multiple redhat-release RPM's installed. rpm -q, rpm --erase to get up2date working)
        • If you have 3rd party RPM's installed that may be an unsupported configuration
        • They won't help you if they don't like your hardware. In this case I was redoing a RedHat 8 server with a functional firewire disk array. Had to install the kernel-unsupported package to get that working

        I challenged them that there was no indication on their website that RedHat Linux upgrades were unsupported (they always were in the past so it's not unreasonable to assume they still would be) and they conceded the point and offered to get a notice up within a week, but weren't any more helpful.

        So, what kind of support are you getting for that money? It's alot like Microsoft support. Completely useless so a waste of money by definition.

        It's too bad - I was 3 licenses into a 30+ server effort over multiple clients, and that's as far as I got. There's a huge base of installed RedHat Linux users they're completely ignoring. I want to help pay Alan Cox's salary, but they don't make it feasible for me.

        Instead of throwing good money after bad, I ditched it and put Fedora Core 2 on. Yeah, I'm out $300 but yum will set you free. Plus firewire works perfectly in the current kernel releases.
        • Amen (Score:4, Interesting)

          by BoomerSooner ( 308737 ) on Wednesday December 08, 2004 @12:35AM (#11028834) Homepage Journal
          When are people going to realize the best support you can have is hiring someone actually qualified to do the damn job in the first place. Just for fun I like to apply for jobs and get interviews to see how the market is doing in my area. I always get the "How important is it that you make what you currently do?" line. My favorite part is when other employees interview and are so proud of their projects that are minor at best.

          When you hire the best that is what you get. When you hire the cheapest that is what you get. Quality isn't free. I guess when all the software development jobs are in India/China we might start to understand there is more to being an excellent employee/partner than just understanding how to program. Or maybe not! Either way I'm on my way out of programming asap.
          • Re:Amen (Score:3, Insightful)

            by FictionPimp ( 712802 )
            My favorite part is when other employees interview and are so proud of their projects that are minor at best.

            Whats wrong with being proud of what you've done. If it was a challenge for you and you overcame it you should damn well be proud. You should of seen how proud I was when I compiled my first kernel successfully. I almost through a kegger. Now its the simpliest thing in the word. I got even more excited when I did my first LFS project. These are minor things any real linux geek should be able to do.

        • by killjoe ( 766577 ) on Wednesday December 08, 2004 @12:42AM (#11028896)
          Welcome to the enterprise my friend.

          The purpose of enterprise support is not to fix your problem it's to convince your CIO to buy the product. It's to make sure the "is supported" box is checked off.

          I have had the exact same or worse story from every majow vendor in the IT world. MS, Netapp, HP, Veritas, Dell and Apple. Call them up and all of a sudden you find out you paid for nothing. They all find an excuse not to help you. I even had a netapp guy say "don't call us anymore" despite the fact that our company had paid for top level support.

          My experience is that the only people who support you are small local vendors. They will camp out at your place if they have to. Enterprise vendors just take your money and laugh.
          • Actually I've had CISCO support reps in the Phillipines stay on the phone with me ALL NIGHT fixing our firewall problems. And these guys REALLY knew what they were doing.

            And the commercial support that I've gotten from DELL was great when it came to advice, and staying on the phone until my RAID was back in one piece, even though I was using an unsupported OS (FreeBSD).

            new web cartoon, now featuring Bitey, the pound cat: []

          • by RollingThunder ( 88952 ) on Wednesday December 08, 2004 @04:15AM (#11029980)
            I've seen HP fly out a new motherboard from Toronto, then the two they kept in the city were found problematic.

            I've seen Microsoft fly up people to help with Exchange servers.

            I've been on the phone with top level Sun techs within five minutes of the event.

            I do, however, work for a very big customer. I don't even pretend that anyone a tenth the size would get this support.
          • I even had a netapp guy say "don't call us anymore" despite the fact that our company had paid for top level support.

            I also had that happen, I snagged my vioce memo recorder and held it to the speaker and asked him again... "what did you say?"

            I then sent that tape to our VP of operations with a letter that the vendor refuses to work with us anymore despite what contracts we have with them.

            I had a phone call 4 weeks later from that tech saying how sorry he was and that from now on I need to call him dir
        • Couldn't agree more.

          I'm working on an embedded Linux project, so had to put together a Linux build host. We're basically a Windows XP house, so the in-house IT people don't know much about Linux. They gave me a copy of RHEL WS and left me to get on with it.

          This is the *worst* distro I've ever used (I've used Debian (preferred), SuSE, Slackware and Lin--whatever, over many years).

          HW support is appalling: my box is a twin CPU HP server with an ATI Radion 9800 (I think). Should be normal fodder for an 'Ente
    • by IANAAC ( 692242 ) on Tuesday December 07, 2004 @11:37PM (#11028332)
      The prices are a little bit on the high side, but you are buying support not the software for the most part and they are certainly not higher that Windows Server 2003 which they are setup to compete with.

      A better comparison would be with something like SUSE Enterprise server - their direct competition.

      The price difference, as well as the number of options available is an eye-opener.

      • by ajs ( 35943 ) <ajs AT ajs DOT com> on Wednesday December 08, 2004 @12:44AM (#11028906) Homepage Journal
        This example is great. You suggest SuSE Enterprise server for options and price... heh, well you do get options and price, I'll grant....

        On Novell's SuSE Enterprise 9 page [] they say that it will only cost you $35 for a single-CPU copy of SuSE Enterprise 9. Wow, nice deal, eh?

        Then they give you a link for complete pricing []. After you start to claw your eyes out, you'll find you're in a twisty maze of horrid excel files (no, really, worse than your average excel file by a LOT). Finally you get to pricing. Support is listed in the file,
        /DATA/PRICELISTS/Pricelists/VLA-CLA/Dec 04/USDec04vla_cla.xls
        on line 3488 (I can't make up stuff this silly, really), you will find the entry for "SUSE LINUX Server Support per Server". It's not clear which price is the one you pay, but it lists $900 and $1010.

        So, you can get a shrink-wrapped box of free software for $35... and support is $900.

        They do offer a "small business support" package for $3,800 and a 5-incidents pack for $1,900 as well (which might be more cost-effective).

        For little companies that just want to buy a shrink-wrap box, and are never going to call for support SuSE is fine. For the enterprise, Red Hat is price and service competitive in the extreme.
    • by lspd ( 566786 ) on Wednesday December 08, 2004 @12:05AM (#11028598) Homepage Journal
      The prices are a little bit on the high side, but you are buying support not the software for the most part and they are certainly not higher that Windows Server 2003 which they are setup to compete with.

      Windows Server 2003 prices are here. []

      The RedHat recommended version for a small business webserver is here. []

      Microsoft policy is that business products will be supported for a minimum of five years [] (10 for hotfix security support) after they are released.

      Windows Server 2003 Web Edition is $399. Per year that's $79.80 for 5 years or $39.90 for 10 years.

      RHES for x86 is $349 per year for updates, installation help, and support with a 2 day response time. Over 5 years you're paying $1745 total. Over 10 it's $3490. These figures also assume that RedHat does not raise the prices higher in the future and does not change the contract.
      • by Synn ( 6288 ) on Wednesday December 08, 2004 @12:42AM (#11028890)
        Windows Server 2003 Web Edition is $399. Per year that's $79.80 for 5 years or $39.90 for 10 years.

        Except that those prices don't include any support contracts. If you call Microsoft with a problem you'd better have a credit card ready.

        I can download Fedora Core for free and get free updates if I wanted to go the cheap route.
    • RHEL ES vs. W2K3 SBS (Score:5, Interesting)

      by Dink Paisy ( 823325 ) on Wednesday December 08, 2004 @12:14AM (#11028674) Homepage
      I think these are the two products we're talking about when Dell says that Red Hat Linux is too expensive. Comparing prices...

      RHEL ES has two versions, priced at $350 and $800, depending on the support level. W2K3 SBS (Small Business Server) is available at different prices from different vendors, but is typically around $500. All prices in US dollars. The prices are quite similar. If you need support for more than installation and basic configuration, Windows 2003 is actually cheaper.

      If small businesses find Windows easier to setup and maintain, then it could be worthwhile. I'm not able to personally confirm this one way or the other, but various people I know who have configured both Linux and Windows 2003 as servers claim that Windows is easier to configure and tune for performance.

      Perhaps Dell simply means that for the market they are selling into and the price they are charging, there is a better product available from Microsoft. It's hard to see how Red Hat could compete on price; they really aren't charging a huge amount. For businesses that can't afford a full time server administrator and don't have any Linux expertise, it is quite possible that Windows just plain is a better choice.

      Going off topic, Red Hat's website has the Ghandi quote that Slashdot loves: "First they ignore you, then they laugh at you, then they fight you, then you win." A year ago, Microsoft was fighting Red Hat. Now they are laughing at Red Hat. Linux still has a chance, but this battle definitely isn't going the way that Red Hat planned.

      I hate to say it, but with IBM preferring Novell and SLES, I think Red Hat has lost.

  • .edu price (Score:5, Informative)

    by i.r.id10t ( 595143 ) on Tuesday December 07, 2004 @10:31PM (#11027720)
    Yeah, the college I worked at balked at the prices too, until I told them about the $50 .edu price (workstation is $25) ... Couldn't find anything on their website, but a email to the sales department took care of it.
  • by Devil's BSD ( 562630 ) on Tuesday December 07, 2004 @10:31PM (#11027727) Homepage
    Couldn't/Shouldn't Dell look into other Linux server packages? After all, that is the nature of the free market. If Dell drags Red Hat and, say, Turbolinux, or god forbid... SCO... into the fray, that would make the bottom line for companies looking to switch to Linux even more appealing.
    • by njcoder ( 657816 ) on Tuesday December 07, 2004 @10:37PM (#11027783)
      " Couldn't/Shouldn't Dell look into other Linux server packages?"

      It's not that easy. Linux distributions vary. A lot of applications that people are buying for these servers are certified torun on RHEL and sometimes Suse's enterprise linux. Things like oracle may not run on debian.

    • Couldn't/Shouldn't you look in to RTFA or something?

      "And Dell has the marketing muscle to make its opinions clear. Indeed, Red Hat's pricing was instrumental in Dell's decision to sign its October pact to sell Novell's SuSE Linux. "
    • Dell is, and has always been, a very conservative company. Look how long they have stayed with Intel even though AMD has had a superior price/performance ratio for years now.

      With Novell having it's own plans for SUSE I don't think that would be an option. I don't see them switching to an out of country distro like Mandrake or Turbo. And after that your into "hacker" distros like Slack or Gentoo which is basically out of the question.
    • by 0racle ( 667029 ) on Tuesday December 07, 2004 @10:42PM (#11027828)
      "Oh, you don't carry Red Hat? Well we were kinda looking to get a Linux box. Thanks, we'll be talking to IBM."

      Sorry but Red Hat IS Linux to many businesses. Thats why Sun directs its challenges to Red Hat, thats why MS talks about Red Hat when they do the TCO arguments, Red Hat is the most visible company selling a Linux system. If you want to aim big, and Dell does, if your not going to carry Red Hat, there's no point in carrying Linux at all.
      • You are part right, Red Hat is at the front of business linux so it gets attention but make no mistake about it, if there was no red hat they'd attack your distro, or his distro. They learned from SCO if you attack linux you get the horns from the entire OSS community, but if you go after the successfull "microsoft of linux" evil red hat, well then you are safe to badmouth linux.
        • by 0racle ( 667029 ) on Tuesday December 07, 2004 @11:12PM (#11028076)
          No other distro is going after their business. You think Sun or MS cares that I run ArchLinux and Slackware? Or that the guy down the street runs Debian and maybe some other guy runs Mandrake? Suse is in a state of transition right now, NDS is too new, no one takes Lin-whatever-the-hell-they're called seriously and everything else falls into the realm of a hobby OS. None of those are the business that Sun or MS are targeting. If Red Hat was not in the position it is now, neither would be going after any distro since for them they would effectively not exist. Red Hat is the target not because they are moving Linux, but because they are successfully moving a product into areas that both Sun and MS want. If they were selling DR-DOS as well they would be the target. Red Hat the brand is the target, not the software.
      • by justins ( 80659 ) on Wednesday December 08, 2004 @12:45AM (#11028917) Homepage Journal
        "Oh, you don't carry Red Hat? Well we were kinda looking to get a Linux box. Thanks, we'll be talking to IBM."

        Which would be ironic, since IBM also pushes SuSE harder than Redhat. Though both companies will sell you either OS, apparently.

        If you want to aim big, and Dell does, if your not going to carry Red Hat, there's no point in carrying Linux at all.

        Why? If there's one company capable of managing stupid-customer expectations it's Dell.
    • Couldn't/Shouldn't Dell look into other Linux server packages? After all, that is the nature of the free market. If Dell drags Red Hat and, say, Turbolinux, or god forbid... SCO... into the fray, that would make the bottom line for companies looking to switch to Linux even more appealing.

      DELL recently came up with a deal with Novell to sell SuSE Enterprise 9 on there servers. For $280/yr Dell will provide support on certain models (28xx series if I remember correctly).

      See []

      • Just looked it up on their site at It's $174/Yr for support of SEL 9 for a single CPU server and $260/Yr for a dual CPU server. Cheaper than minimum $350/Yr for RHEL and alot cheaper than the $900/Yr Novell wants you to pay for support.

        For $175 per single-CPU server annual maintenance subscription and $269 for a dual CPU subscription, Dell and Novell offer Linux customers additional choice on Dell's award-winning PowerEdge 1850, 2800 and 2850 servers. SUSE LINUX Enterprise Server 9 is the first enterpris

    • They are ... (Score:3, Informative)

      by buchanmilne ( 258619 )
      ... since they started offering SuSE about 1 month ago.

      But of course, if you had RTFA, you would have known that ...
  • It'll Happen (Score:4, Insightful)

    by Refrozen ( 833543 ) <> on Tuesday December 07, 2004 @10:32PM (#11027738)
    I imagine it'll happen. I have a feeling RH gets most of their sales from Dell, it's the ole'Walmart syndrome, where they either lower their prices, and go out of business, or go out of business because they lose their main client.

    Damned big companies.
  • by Anonymous Coward on Tuesday December 07, 2004 @10:32PM (#11027744)
    here's one of them. It's a personal account of working inside of the "dell beast." Written by the site maintainer of it was written only a few days ago. Most of the thoughts reflect my sentiment and experience with dell..

    here it is []

    John Allen Mohammed
    • I've had the experience of being on the outside... if anything Dell should be forwarding some of the $$$ that we paid them to RH.

      In comparison to Compaq/HP or even white-box vendors Dell comes in at 1 out of 10. I've had service delayed by 3 weeks on multiple occasions due to poor logistics and have frequently had to mentally wrestle the support staff over the phone to deal with problems. Hardly a desirable quality when you're looking for uptime.

      I've never heard of Dell in a positive manner. Ever.
  • RedHat screwed (Score:3, Interesting)

    by duffbeer703 ( 177751 ) * on Tuesday December 07, 2004 @10:33PM (#11027748)
    Way too arrogant of a company for what they do... they are losing OEM support and customers who don't feel like being extorted.

    As faras IBM is concerned, Suse is the only linux. And Novell is willing to discount things very heavily.
    • Re:RedHat screwed (Score:5, Informative)

      by Curtman ( 556920 ) on Tuesday December 07, 2004 @10:46PM (#11027857)
      As faras IBM is concerned, Suse is the only linux.

      Someone better tell IBM that then []:

      • Red Hat Enterprise Linux now pre-loaded on xSeries!
        Deploying Red Hat Enterprise Linux on xSeries is now even easier. I November 2003, IBM introduced bundles of Red Hat Enterprise Linux with xSeries servers. Red Hat Enterprise Linux AS 2.1, Red Hat Enterprise Linux ES 2.1, or Red Hat Enterprise Linux WS 2.1 may be ordered when purchasing BladeCenter and xSeries servers. Offers are available with a "No Support option", which will allow the customer to purchase support from IBM Global Services. Also available are offers with 1 year of Red Hat support. Every copy of Red Hat Enterprise Linux includes a one year subscription to Red Hat Network. Now, customers can buy either Red Hat Enterprise Linux ES or WS 2.1 pre-loaded on x205, x225, x305, x335, and x345 servers in the US. For all other models, Red Hat Enterprise 2.1 Linux will be included with the server and installation will be performed by the customer. In 2Q04, Red Hat Enterprise Linux 3 will be available via similar offers.
    • Redhat arrogance (Score:2, Interesting)

      by Anonymous Coward
      The OpenSSH developers won't support Redhat users, because of their messing around [] with the distribution tarball and ongoing refusal to discuss the issue in public.
    • Way too arrogant of a company for what they do

      Oh, I dunno - seems like they contribute quite a lot of value to the Linux kernel, and Satellite server plus kickstart make real differences when managing a few hundred machines. I disagree with a lot of their distribution policies (price definitely being one of them), but I don't mind funding Linux through RedHat (though I feel you're on mark about customers feeling extorted - it's overpriced.)
  • Users and tech journalists have been pointing this out for the last couple of years. If RH drops their prices they'll look even MORE like M$. Okay, the analogy breaks down in the general sense but M$ did drop prices in other countries when they feared losing market share.
  • Bad (Score:3, Insightful)

    by tuxter ( 809927 ) on Tuesday December 07, 2004 @10:35PM (#11027762) Journal
    It still looks bad for ANY linux distro to have high pricing. If Linux is evet to get a decent foothold in any market, it has to appear to have both a low TCO and a low initial purchase price. Managers do not look at what it can do, just what it costs. The take up, and major market share has no bearing on stability or operability, we all know that already.
  • by El Cubano ( 631386 ) on Tuesday December 07, 2004 @10:37PM (#11027773)
    They could always add support for something like Debian, which is known for its outstanding stability in spite of its lack of big commercial backing. Dell could then offer graduated support options, including, no support. I'm sure lots of businesses that would jump at the opportunity to get a server with Linux preinstalled (that way they are sure all hardware is working and configured out of the box) even if they have no need of a full support package.
    • CentOS (Score:2, Informative)

      by eobanb ( 823187 )
      CentOS is basically just totally free and open version of RedHat Enterprise Linux, and it's really nice. Although there's no one to call if someone goes wrong, it basically offers everything feature-wise that RedHat does. check it out here [].
      • CentOS, WhiteBox Linux, Pink Tie Linux (I believe), and KRUD are the alternatives that come to mind...but they aren't *trying* to deliver what Red Hat is charging for, support!

        Well, except that KRUD is doing support also, but not for the basic cost of the distribution. That a MUCH extra cost option.

        If you're buying RHEL, you're paying for support, not for the programs. I don't know what Red Hat support is like when you do that, but that's what you're paying for. (Which is why the RHEL contract has a pe
  • by ilyanep ( 823855 ) on Tuesday December 07, 2004 @10:37PM (#11027782) Journal
    Isn't RedHat Server cheaper than Windows 2003 Server? And RHS is supposed to compete with Win2k3.

    RedHat ES -- $349.99
    RedHat WS -- $179.99
    Win2k3 -- At least $400 from what I can pick up.

    BTW, if Dell doesn't like RedHat, why don't they use something else? People vote with their dollars.
    • Dell's cheapest server is on special right now, for $309. This is without an OS.

      You are right that it is cheaper. I thought there was an annual fee for RHEL, which is where the cost really stabs.

      W2k3 Small Business: $499, Premium Edition $1299.
      RH: $349 for one year, $799 for three years.

      I think they should check out SuSe's enterprise Linux, and they still offer a standard branded distribution too. The sooner they get people away from thinking Red Hat == Linux, the better, in my opinion.
    • BTW, if Dell doesn't like RedHat, why don't they use something else? People vote with their dollars.

      Overhead of changing their support (ie training staff)? Loss of respect from previous buyers (If they bought Dells with Red Hat in the past, it'll be easiest to upgrade to Dells with Red Hat in the future). Whatever they've worked for with Red Hat would also be gone. No, you can only "vote with dollars" if you ignore all sense.

      On the small scale remember that if I buy Intel and later AMD is cheaper, n
    • Apples and Oranges (Score:5, Informative)

      by Craig Ringer ( 302899 ) on Wednesday December 08, 2004 @12:39AM (#11028867) Homepage Journal
      RHEL: Annual subscription, unlimited clients
      Win2k3: Outright license purchase, CAL cost per-client.

      You can't effectively compare the prices of the two without a context, such as the lifetime of the server and the number of clients that are expected to be connected to it.
  • If It's too expensive why is Red Hat doubling their sales every year/quarter, and alternitives like SuSE show little to flat growth?

    Yes, It's expensive for me or a 5 worker business, but It is still selling. Isn't it up to Red Hat as to what consumer base they want to sell to?
    • by Percy_Blakeney ( 542178 ) on Tuesday December 07, 2004 @11:30PM (#11028243) Homepage
      If It's too expensive why is Red Hat doubling their sales every year/quarter

      The real question is what their sales would be if they offered a low-end product for $50 per year or so. Dell is not saying that Red Hat is not making money, they're saying that Red Hat could be making more money.

      Yes, It's expensive for me or a 5 worker business

      I work for a mid-size corporation, and it is too expensive for us. Welcome to the world of tight budgets!

      Isn't it up to Red Hat as to what consumer base they want to sell to?

      Of course. Read Dell's comments -- they're not suing Red Hat, they're simply warning Red Hat that they need to lower their price. Just as Red Hat has the liberty to sell whatever the hell they want, Dell has the liberty to use a cheaper distribution. At least Dell was nice enough to warn Red Hat instead of just dropping them.

    • This thing to realize about software, unlike pretty much any other good you pay for, is that it's "all gross margin". I'm sure Dell groks this despite being a hardware company.

      Since your COGS (cost of goods sold) is practically zero (just a CD and a box - maybe a manual) you can price it wherever you want to maximize the product of units sold times ASP. In contrast, hardware is pretty much always priced only 100 to 200% over raw COGS, except at the very high end where volumes are small and development/mark
    • My guess is that Dell has decided it wants a larger Linux customer base, and their small business customers are balking at the Redhat price. Dell is merely saying that they could sell more computers if Redhat was cheaper. (Maybe Dell should shop around and offer more than one Linux option... I hear you can get it for free some places* ;)

      And Steve Ballmer wants a $100 PC so people can afford to spend $200 on Windows.

      And I want a pony.

      * - free linux doesn't come with the Redhat enterprise support, but pr
    • by justins ( 80659 ) on Wednesday December 08, 2004 @12:41AM (#11028886) Homepage Journal
      If It's too expensive why is Red Hat doubling their sales every year/quarter, and alternitives like SuSE show little to flat growth?

      Because you're pulling those figures out of your ass.
  • Red Hat Enterprise Linux AS, Red Hat Enterprise Linux ES, Red Hat Enterprise Linux WS or Red Hat Desktop? There's a pretty big range here. Assuming they're talking about ES ($350 on up) and WS ($180 on up) IMO it's a good deal since they include fairly decent support (something Dell has forgotten about a long time ago). The prices are still much less than Microsoft's and Novell's offerings.

    Ultimately pay the price or start supporting another distro. IMO it seems UserLinux could be a player in a few years

  • They should tell RH that they are going to start switching their customers to Windows! Then RH will drop their prices!

    Isn't that what companies do with Microsoft when MS prices are too high? ;)

  • Agree (Score:5, Insightful)

    by mjmartin_uk ( 776702 ) on Tuesday December 07, 2004 @10:47PM (#11027866)
    I completely agree with Dell's views on RHEL's overpricing. I bought a Dell PowerEdge server for a small business back in August but Red Hat's Enterprise Linux was overpriced and we felt uncomfortable buying a subscription at the rates we were offered from Dell. Instead I recommend we choose Suse's offereing which was a far more viable option for the company. I can see why Dell went for Novell a month or two back. Let's not beat about the bush though, it could be construed that Dell spoke to Novell so they are now in a better bargainig position with Red Hat.
  • If Dell were to contract with Red Hat for 5000 licenses to be resold to Dell customers, I'm sure Red Hat would be happy to offer them a better price.

    But otherwise their statement is just so much empty posturing, not unlike how Microsoft says that hardware should be free (as in free beer).

  • Maybe they just want RedHat to charge an easy per-unit price. Doesn't RedHat charge companies primarily for support subscriptions, based on the number of incidents? I know Microsoft charges up front by the number of processors that its operating system is running on, in addition to the support incidents.

    Dell likes to sell users the whole enchilada: hardware, software, and support, as one tightly integrated package, which works better with the MS model from a pricing perspective. If they were reselling the

  • Whitebox Linux (Score:5, Informative)

    by cluge ( 114877 ) on Tuesday December 07, 2004 @10:55PM (#11027932) Homepage
    The price is too high, that is why some of us have been using White Box Linux [] for some time. It's 100% binarily compatible with RH, and it works.

    From the above linked website "This product is derived from the Free/Open Source Software made available by Red Hat, Inc but IS NOT produced, maintained or supported by Red Hat. Specifically, this product is forked from the source code for Red Hat's _Red Hat Enterprise Linux 3_ product under the terms and conditions of it's EULA."

    So far - and 10's of servers later - no complaints, works like a charm. Since it works so well. Why pay? For their support? Lets be honest, we generally find the bugs before RH does, and our staff can handle anything - including figuring out the undocumented changes that RH makes to their own products (example: static routes anyone?).

    • Re:Whitebox Linux (Score:3, Informative)

      by justins ( 80659 )

      The price is too high, that is why some of us have been using White Box Linux for some time.

      Or CentOS. Or Taolinux. Or Scientific Linux/Fermi Linux. Or probably some others I'm not remembering...

      My favorite is Scientific Linux. That's primarily because it seems the least likely to be suddenly unsupported one day, as it is maintained by a national lab. (not that this is a big deal, obviously, with all RHEL clones being so closely compatible) They also have a nice "contrib" section and fast servers.


  • by kstumpf ( 218897 ) on Tuesday December 07, 2004 @10:55PM (#11027936)
    RHEL was definitely far out of our price range, especially since we have absolutely no use for the support that we would be paying for. We ended up going with CentOS on our fourteen Dell servers that run everything for [].

    CentOS is a community-supported build of the RHEL source RPMS. They closely follow RedHat errata and release updated packages shortly after the official RedHat packages appear. We've used it for over six months now and it's been great. It's perfectly stable, and it's easy to rollout updates via a local yum repository that rsyncs off the CentOS mirrors.

    Try CentOS or WhiteBox!!!

    CentOS []

    WhiteBox Linux []
  • It's called what the market will bear. Red Hat sets their prices based on their best guess about the value of their product in relation to how many people are willing to buy it at any given price point. If they're charging too much ... hey, this isn't Windows, people -- there's competition in the Linux marketplace, and someone else will step in to fill what Dell perceives to be an unfilled market for a "value" enterprise Linux.
  • I run a small hosting company (about 100 servers) and we're currently running alot of RedHat 9. We've been testing Fedora core 3, RH EL, Solaris 10, Suse 9.1, Gentoo, CentOS, you name it.
    So far Fedora is winning out, with maybe Solaris for some applications where we need to run commercial software (oracle 10g). RH EL is way too expensive, particularly in SMP versions, it's not just Windows 2K3 they're competing with and they need to address that somehow.
    • by jrcamp ( 150032 ) on Wednesday December 08, 2004 @12:14AM (#11028678)
      You're actually considering rolling out Fedora for server hosting? Are you crazy?
      1. it's not meant for server use
      2. comes with a bunch of extra cruft installed
      3. the GUI tools never have enough features so you resort to hand configuring anyway
      4. poor (read, small) package repository
      5. short release cycle
      6. short security fix lifespan
      7. not safe (according to developers) to update without rebooting into the installer/upgrader--have fun updating those 100 servers every year!

      Thse are all the reasons not to use it for a server.

      To my brother poster: Gentoo on the server? If you were my employee I'd have you fired. And no, I don't want to hear about building then distributing binary packages.

      The only truly free options for servers is Debian stable. Long release cycle, vast package repostiories, security backports so your servers don't break, seamless upgrades in place. Everything Fedora is not. Use it or at least something actually meant to be stable, be it Whitebox, SuSE, etc.

  • by Laptop Dancer ( 572075 ) on Tuesday December 07, 2004 @11:18PM (#11028121)
    This is a HUGE opportunity for Sun. They could drop Solaris 10 for x86 in there, and offer Dell two interesting pricing options: free and supported. The free option hits an impossibly low price point while getting Solaris 10 on the street (displacing Red Hat), and the supported option would allow Dell to white-label the license so that they could sell a single vendor corporate contract. Um, wait, Sun won't move on this in time, so never mind.
  • Dell Calls For Red Hat To Lower Prices
    Think about that headline for a second.. Linux has really hit the bigtime. A pure play OSS company with the power of Sun, IBM, DELL, HP? I knew there was a movement, but Red Hat wedging its way in amung the big boys is quite the accomplishment. Kudos you guys.
  • . . . by issuing a call for Dell to lower hardware prices.
  • by psykocrime ( 61037 ) <[mindcrime] [at] []> on Tuesday December 07, 2004 @11:26PM (#11028201) Homepage Journal
    ...about small and medium sized business. Or so it appears to me. I get the impression that they want to play with the big boys, who WILL pay the premium for RHEL 3.

    For other businesses, there are always the "RHEL rebuild" projects, like Centos, WhiteBox Linux, Tao, X/OS, etc. And at some point, if they haven't already, some enterprising company will step in and offered fee-based support for one of these distros (or will roll their own rebuild distro ), and take that SMB business that RH is passing up.

    For everybody else (well, everybody who is "Red Hat centric" ) there's Fedora.

    So it all works out, really. RH is making decent money, apparently, by focusing on big business. SMB can take advantage of the fact that RHEL is Free software and use a rebuild distro, and hobbyists and those who want to be on the cutting edge use Fedora. There's something for everybody.
  • same old story (Score:5, Insightful)

    by davejenkins ( 99111 ) <> on Tuesday December 07, 2004 @11:48PM (#11028422) Homepage
    disclaimer 1: i used to work for Red Hat
    disclaimer 2: I have done contract work for Dell

    Dell always will badger vendors to shave prices wherever/whenever/however possible. Every dollar they can save somewhere equals X% increase in marketshare or volume for them. Dell is a ruthless selling machine.

    Up until recently, Dell really didn't care so much about Linux for the SMB market, only in the way that their customers wanted it (and it gave them an option). I would imagine that:
    1. Dell has done the math, realized that SuSE isn't penetrating the way they had hoped
    2. without serious competition (which was supposed to exert price pressure on RH) Dell has resorted to publicly whining about RH prices
    3. This public whining is supposed to snowball and "force" RH into reducing prices.

    The problem is that the SMB market is actually more resource-intense in terms of support. As such, Red Hat has never really liked it (compared to Enterprise), but Dell's volume volume volume absoultely depends on it.

    If Dell agrees to shoulder more of the support burden, I would imagine they could get very good deals with RH.
  • by rimu guy ( 665008 ) * on Tuesday December 07, 2004 @11:58PM (#11028528) Homepage

    As has been pointed out, the fee RedHat charge is for their services. If you can forgo the services and the brand there are freely (beer/speech) available alternatives.

    Whitebox Enterprise Linux 3 [] has taken the RedHat Enterprise Linux 3 source RPMs, removed trademarks and RedHat artwork and produced their own binary distro of those source RPMs. The resulting server is RHEL3 RPM compatible (which is useful if you are using 3rd party repositories.

    WhiteBox Linux release erratta fixes following on from any that RH release. So the distro is kept up to date (using up2date or yum, or if you're like me, apt)

    There are other [] projects with RHEL3 based distros as well.

    Don't you just love the GPL?

    WBEL3 Based Linux VPSs []

  • by mnmn ( 145599 ) on Wednesday December 08, 2004 @12:23AM (#11028741) Homepage
    What can you do? Redhat is in demand, and they have to look at the pofit curve and extract the most money. Do you blame em?

    Everyone keeps hearing about this thing called Linux, too many companies are pushing it out there. Maybe your windows servers been crashing since NT 3.51, so you start looking. Redhat is the biggest Linux vendor with support. You want a big BIG company base behind your OS, and a software base, Redhat is it, with Suse coming in second regardless of price or quality of support or binaries or whatever.

    So you go with the top Linux vendor. With Sun, IBM pSeries slowly defeated, and HP's HPUX platforms, well, I dont know anything about them... and Apple too vertical a market for your taste with all server apps in the wild against it, you'd head for none other than Redhat, after Microsoft, in OS sales.

    For us, Redhat needs to be a rich successful company. Thats more important than the number of sales they make. Reason being their success attracts other vendors, and several competing vendors are much better than one vendor with the global supply of commercial Linux. Their success also puts them in a position to improve the Linux market itself, we've seen Redhat ads compete with Microsoft ads. Slackware couldnt do that. We've seen Domino, Oracle, and many other major server apps released in redhat packaging and supported as such. Debian couldnt do that.

    So let Redhat get rich. Please. Beyond a threshold, Dell will purchase it. Below the threshold, Dell will purchase the next best thing and improve competition. If people need 'Redhat' Linux, let them pay for it until something better comes along.
  • by CB-in-Tokyo ( 692617 ) on Wednesday December 08, 2004 @02:13AM (#11029458) Homepage
    I don't know about everyone else, but when I order servers, a $359 dollar price tag for an Enterprise OS doesn't even enter into my mind!

    Due to corporate policies, we are generally a Windows shop as far as the global infrastructure is concerned. If I want to setup a mail server with Windows, I am looking at purchasing Windows 2003 Enterprise version, Exchange 2003 Enterprise Version, Client access licenses for the servers, and possibly Terminal Server licenses as well. Figure the server hardware will cost around $10,000, and to get fully decked out with an Enterprise Level OS and Email system from MS will cost me around $5000. That is 50% the cost of the hardware. This doesn't even begin to address support costs.

    I have switched from Dell in the server room to HP, so I am not sure what the Dell server prices are like in terms of dollars, but I do know they tend to be cheaper (at least in Asia). I recently compared a similar hardware Dell quote and an HP quote for a Korean associate and the Dell quote was 40% cheaper. So, if we say a Dell server is around $6000 and the enterprise level OS that runs on it is $359, we see that the software is priced at roughly 6% of the hardware. Even the $799 version is only 13% of the hardware price, and this is assuming the hardware is 40% cheaper than the Microsoft comparison.

    Not exactly over priced in my opinion in. In fact 2 support calls to Microsoft cost this much. Once we get into the higher level offerings from Redhat then the ratio changes a little, but the point to remember here is that this includes support!

    RHEL AS Server is $2499/year and includes Web and phone based comprehensive support 24 x 7 1 hour response Unlimited incidents 1 year Red Hat Network

    1 hour response time costs! You have to have higher prices to even begin to offer this. For environments where you do not need 1 hour response (the best Dell offers is 4 hours -- in Japan ;) ) time from your vendor, you do not need to pay for it. With the Microsoft offering, I am paying large sums of money without any support included.

    I personally run Debian at home for my mail/web server (and Gentoo when I feel like getting frustrated) but if we were ever to switch to Linux in the server room, one of the biggest deciding factors would be the quality and availability of support. Red Hat's target is certainly not the geek home user who balks at a $359 price tag and doesn't require support. It is the Corporate Enterprise market where when the server is down and the company's business is impacted people are glad to have paid for support. In that market, their prices are excellent in my opinion. If they were charging peanuts, they would not be taken seriously by the people making the business decisions for a company. Businessmen tend to understand that you can't get something for nothing, especially service.

If it's not in the computer, it doesn't exist.