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by Jeff Key.
Original Post: Penguin pushers pondering predicament
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First, before people jump down my throat: I'm the messenger, folks. I think Linux is great; competition is great. Everything is just dandy. I even like Macs and Java, Diet Coke and Diet Pepsi. (Blasphemy!)
I've read about Rick Carey of Merrill Lynch (where I had my internship) talk up Linux for years. Again, I think Linux is fantastic and a great solution in some situations, but the argument to use it because it's “free” has always puzzled me. It seems that at Mr. Carey is beginning to see the costs associated with this “free” OS. The article is full of great quotes that you can read in the article, but I feel compelled to highlight a number of them:
But Carey's other concern has to do with Linux vendors themselves, like Red Hat, which recently introduced a new licensing policy that will force customers to pay a per-CPU fee for the commercial version of its product, called Enterprise Linux. In the previous version, you could pay for one copy and then put it on as many machines as you wanted.
Red Hat won't let customers do that with Enterprise Linux. But Red Hat claims Enterprise Linux is still free--because customers are being charged for support, not for the software itself (ahem).
Brilliant!
Carey says one reason he embraced Linux was its lower cost. But if Linux becomes almost as expensive as Windows, why not go with Windows, and benefit from the work of thousands of Microsoft engineers and programmers? Carey talks about "the innovation premium" -- meaning the price you pay to get the latest and greatest.
"Most open source is imitation," Carey says. "Linux is an imitation of an operating system. If these [Linux] companies are going to create a price point that is significant enough that they are approaching the same pricing model as the innovation premium, why pay a premium for imitation when I can pay a premium and get innovation?"
People will argue until they're blue in the face that Microsoft doesn't innovate. I disagree, but that's just my opinion. (BTW, apparently Microsoft's “innovation“ push is starting to sink in. Personally, I've found it annoying. Every interview with a Microsoft exec is littered with the word “innovate“.)
Another danger is emerging. Although dozens of Linux distributions exist, switching from one to the other could become more difficult as companies like Red Hat and its rival, SuSE, which is owned by Novell, attempt to differentiate their Linux distributions by developing new features. Once applications are written to work with a certain set of features, moving them to a different Linux distribution could require a lot of difficult and expensive rewriting.
"That's what makes me cautious," Carey says. "There's a risk there. I have the right to switch, but it could be costly."
This shouldn't surprise anyone. What business strives to make the exact same product as their competitors? I would be very surprised if RedHat, et al. based their success on support revenue. They need to make a compelling argument to choose them over the competition, and better support just doesn't cut it.
Apparently some people don't want those Red Hat guys to become billionaires. Shocking.
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