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Ok everyone here has heard (or read) plenty of posts saying - how can Redhat make any money when people can just download the software for free? Well please correct me if I am wrong but I thought that Redhat was saying that they planned on making money off the Linux support and not by selling cd's. Didn't they cover that in the prospectus?

Anyway- what I'd like to hear discussed is what do people think about the possible competition that RH is going to encounter in the support area? If this is really where the bulk of their growth (and income) is going to come from then I would be curious to see how they are going to compete and make themselves attractive as a support source (or more precisely more attractive than others).

I beleive that Linux has some real potential of becoming a major player in the OS arena and as such we will see more and more big players get interested and start offering it as an alternative. (there are quite a few already) What is going to happen to Redhat's support income when companies like IBM, sgi, Compaq, HP, and maybe even Sun get interested and start offering support. These companies all have well established and well trained support centers that have been doing UNIX support for quite awhile now in a big way, and with LINUX being open source they have access to the source code for debuging of the drivers, apps, etc. etc. So ramping up their support staffs for Linux support should not be too big of a leap. (yeah, it couldn't be done overnight but if the money is there it WILL be done, a few of these companies support more than one UNIX already - SVR4 BSD AIX tru64...) Sure Redhat is the one that is putting out the cd but for the most part the OS is out there in the open for all to use, even the source code for the future kernel is released openly so it can't be said that Redhat would even have an advantage over others with ramp-up time to new kernel releases as far as support for new releases go. Also when companies and/or the public at large buys a box from say IBM or Compaq and they have trouble with the installation or a driver install who do they call? That's right they call the people they bought the box from, just like in the pc business when you have trouble with your new windows box you call Gateway or Dell because that is who you sent your check.

Also if these larger companies start to offer Linux boxes it would probably be in their best interest to ship their own distribution. It will give them more control over where Linux progresses to and the ability to introduce new hardware with support in Linux when it was released. So we might see IBMlinux HPlinux Sunlinux.... This again may cut off possible income from RH.

Anyway I think that there will be plenty of money to be made in supporting Linux. I'm just not so sure as to how or if Redhat is going to be able to get a nice big piece of that support services income pie. (as you have heard before: don't forget Redhat is NOT linux). Anyone have some ideas? Maybe they will be able to make some strong partnership agreements with these larger companies?

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>>What is going to
>> happen to Redhat's support income when companies >>like IBM, sgi, Compaq, HP,
>> and maybe even Sun get interested and start offering >>support.

Start?...Right now if you buy an IBM Netfinity server
you get 90 days of support to get the opsys installed
and running, and connected to a client on a network.
This is live phone support, and starts from the first
time you call into the support center, not from date of purchase of the machine. This already is better than out of the box Red Hat. You can also buy support packs that are cheaper than Red Hat's. Don't quote me on this but I think I heard RHAT was about $400 a call.
IBM is having a huge amount of training going on world wide right now in house and providing it through the normal international IBM training centers. And I have'nt even gone into the actual Services division, IGS, that is ramping up very quickly and providing support and solutions throughout the world.

I, too, have wondered how RHAT will compete against the various companies that will be clamoring to provide support. The trainers they use are contracted out. There is really no inherent gain you get because it is a "Red Hat" specific course. It's not like your getting trained by the developers or anything.
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I enjoyed reading your post.
I am a linux user, so I am a little biased.

First of all I run a dual boot system with win98 and red hat.

My outlook on the linux issue is that redhat is the major player. While there are other distributions of linux out there such as Caldera, Slackware, and debian one thing remains constant with them all. They all use the same kernal. Yes the source code is freely available to anyone with the time and energy to modify it for there own personal needs, however the kernal may not be modified and then redistributed until Linus Torvald has okeyd it and decided that the kernal is worth an up date.

So even if we do see things like IBMlinux, SGI linux (More on that in a minute), they will have no distinct advantage over redhat with the exception of independent software they wright for there flavors. One great thing about being appart of the open source community is that alot of the software for linux is freely available on the net. This is also a serious draw back to linux right now. There just isn't enough software out there for most people in business to justify the switch from windows to linux. I personally believe this will change, as there is about 100 times as much linux software available now as compared to a year or so ago when I started using it.

Also alot of big players are really starting to look atr linux with a serious eye.
I am a graduate student in medicinal chemistry, and we use alot of SGI's to mollecular modelling. Well at the American Chemical Society meeting in New Orleans this month I talked for a pretty good while with some of the people at SGI, and they are preparing to start using linux as a shippable operating system. Seems it is taking to much effort to keep IRIX (There flavor of Unix) up to date. There was debate at SGI for a while to make a full switch to windows NT. However they are leaning mure towards linux now according to ther people I talked to.

Why is red hat the major linux player? Good question.

I do no that most people buy the RedHat linux box set which includes a very nice book (I consider it to be the best linux referrence book out) Also it is a real pain in the #@$ to download linux. You have to also download all the extra programms that come with the box set. So they are making significant money by selling there box set and offering support.

At this time I do not own rhat, I see it as overated. I wish I would have had the money to buy when it went public. Now I am waiting for 75-80 before I buy for the long haul.

Sorry for the long post that really probably said nothing.
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I bought into Red Hat this week. I had a discussion with my brother-in-law who's had several books published about Unix, NT, Windows, and Linux. He's in Germany and thinks many big businesses are going to start utilizing Linux. He also hates Microsoft although he claims to not be one of "the religious crusaders" against Bill and his company. I'm figuring Red Hat has several things going for it. One, it is providing easy access to Linux and some software for it for lazy folks like me; two, it is first out of the gate, like INTERNET IN A BOX once was; three, linux itself seems to have a bright future. And actually, I guess a fourth would be the wide spread acrimony towards Microsoft. Just some thoughts,
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med68 asks
What is going to happen to Redhat's support income when companies like IBM, sgi, Compaq, HP, and maybe even Sun get interested and start offering support.

*chuckle* You missed the news back at the beginning of the year. Red Hat took a chuck of new Venture Capital last year and used it to build up an Enterprise Support group. Then they started to talk to all the big companies you mentioned. Back in the first couple of months of this year there were a series of announcements of support deals between Red Hat and IBM, HP, Compaq, Dell, et. al. (LinixCare also got some) The support for Linux (Red Hat's distributions) on those servers from IBM, HP, etc. is coming from Red Hat.
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