One view of Linux that's persisted over the years is that it's free. Even though that's not fully accurate, Linux has traditionally carried a relatively low price tag. But you've started putting pretty steep price tags on that software. Are you running into any pushback from customers?
Relative to free, everything is expensive up from free...if your question is whether we perceive our pricing as expensive -- which is relative to what? The fact that you're getting a 9i rack Oracle cluster, certified on a Linux OS, that runs on six or seven different architectures that will be serviced globally, 7 by 24 -- jeepers. Expensive as compared to what? As expensive as compared to being able to go to kernel.org and use that implementation to put on your 9i rack cluster? If a customer really wants to do that, great... My view is that we've segmented the product and priced it to meet a specific set of users. We look at the issue every 90 days, and I believe there is a tremendous amount of value in the subscription we market and sell relative to the economic advantage it provides to our customers.
IDC recently said that the cost of Linux deployment is higher than that for a proprietary system. What's your reaction?
It's hard for me to relate to blanket statements that say in this environment, this product costs more than the other.
Forget the environment. I'm asking about the research report about proprietary versus standard. Help us to understand that.
If that were the case, why would we have seen companies like AOL, Versign and Amazon adopt Linux. Or seven of the nine leading investment banks in the United States now migrating from proprietary Unix to Red Hat Linux. These are very smart people. They are seeing the benefit of choice. The tangible hard dollar savings are inconsistent with that report. Lastly, there are no two operating environments that are alike. So for you to compare CNET's ROI (return on investment) on your deployment on your technology to Red Hat's is reckless. A lot has to do with the deployment and management capabilities.
Microsoft would say the same thing.
I have customers.
They have customers too.
Great.
But their technology is not open and yet there seems to be room in the market for both--
And I say that's wonderful.
To protect your turf, do you think you and SuSE will start building proprietary hooks? Just like when Unix developed. At first Unix was open but then seemingly every vendor put its hooks in. How do you see this playing out?
I think it really boils down to the core economic model of how you build your business. And we are a pure play. We are an open-source company. And with that, we will continue to port our technology out under a GPL licence...It's been my experience that, once you build hooks and begin to change the complexion of who you are, then the brand promise erodes and hell, we don't look any different than the rest of these nuts that are down the street.
Still, there's going to be a great temptation to put their special sauce into something, won't there?
But then they would have to use an alternative licence than the GPL. Then you're back to not being able to leverage the full collaborative power of open source. What makes this so successful is this large breadth of developers in China, Bangalore and Boston advancing the libraries, the kernel and the capabilities. It's that community of use that makes that happen.
