Microsoft announced in November 2006 that it would distribute 70,000 Linux support certificates a year for five years, at the cost of $240m as part of an interoperability and patent deal with Novell.
Speaking at the Merrill Lynch internet, software and services conference, Red Hat’s CEO, Matthew Szulik, dismissed the impact that deal has had on Raleigh North Carolina-based Red Hat’s business.
I think that there has been a strong amount of external communication by Microsoft and Novell on this topic, he said. We certainly expect that there will be those cases where customers will consume those coupons. We’re certainly encouraging one or two customers to consume all of them, let’s get this over with.
Microsoft and Novell have certainly been vocal about the customers they have encouraged to adopt the vouchers, announcing that Deutsche Bank, Credit Suisse, AIG Technologies, and most recently Wal-Mart, have signed on the dotted line.
In January the company’s said that 35,000 new certificates for three-year priority support subscriptions to SUSE Linux Enterprise Server have been activated since November last year.
Microsoft has committed to pay Novell for the certificates regardless of whether customers buy them, but Szulik suggested Red Hat is happy to see customers take Microsoft’s money.
He also maintained that the company’s own customers were not swayed by offers of apparently free support. When you think about the amount of workload that’s being placed on these technologies… free doesn’t cut it, he said. We’re finding a more informed buyer; we’re finding a more strategic buyer.
Szulik also dismissed Oracle Corp’s attempt to under-cut it on Linux support on similar grounds, insisting that customers were unlikely to be convinced by cost savings that are a small percentage of their overall software spend.
You look at the total cost of the stack, he said. The purchase of an operating system and the support that comes with that is such a small percentage of the total cost, somebody who’s getting ready to spend $19,000 on a database… that would likely be the higher price for discounting and concession.
I don’t think that customers want to boast about saving $5 a server if on December 24, if you’re an online retailer, your systems fall over and collapse and you don’t have the competency to support that, he added.
In October 2006 Oracle announced plans to support the Red Hat Enterprise Linux code base under its Unbreakable Linux 2.0 program, charging at least half the price of equivalent Red Hat support packages.
The program has not proved popular, however. In December Oracle’s president Chuck Phillips said Unbreakable Linux was downloaded 9,000 times in the first 30 days. In comparison Red Hat’s non-commercial Fedora Core 6 had an average of 12,500 installations per day in its first month.
