Linked by Thom Holwerda on Tue 20th Dec 2005 18:37 UTC, submitted by Robert Escue
IBM Unix isn't a flashy market. But what distinction there is has been going to Sun Microsystems lately, by making its Unix-based Solaris operating system available as open-source software. Last week, IBM moved to put its AIX Unix operating system back on everybody's radar by revealing plans to create a development center on its Austin, Texas, campus to speed up AIX development.
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RE[5]: One size fits all?
by Celerate on Wed 21st Dec 2005 01:01 UTC in reply to "RE[4]: One size fits all?"
Celerate
Member since:
2005-06-29

"Most businesses that use it do use it because it is free. Look at most Linux case studies of large businesses that are using it. What is the most common reason? Not technical surperiority. Not open source. But "Cause it saved money"."

Companies get some distributions for free, other's they have to buy boxes sets and they do actually fork over for that, but the real money flow is in commercial support. Companies that can afford it don't stop at just getting Linux, they also pay for support so they have someone to turn to when things go wrong, and someone to call on the carpet when things really go wrong. There is money flow and it is significant.

The businesses that don't pay for support are sometimes still willing to buy a copy of the distribution they want to use. The reason they don't pay for support is because they cannot afford it, in which case were they to use any other OS they wouldn't be paying much if anything for that either.

Saving money is different from getting something entirely for free. Companies can still make a profit from offering something(s) for less than the competitors, and if the competitors don't want to lower their prices then they can just sweaten the deal on their higher prices by offering something more.

Reply Parent Score: 1

RE[6]: One size fits all?
by Simba on Wed 21st Dec 2005 01:31 in reply to "RE[5]: One size fits all?"
Simba Member since:
2005-10-08

"ther's they have to buy boxes sets and they do actually fork over for that, but the real money flow is in commercial support."

Sure. and those businesses that to pay for commercial support are supporting all the ones that don't. Hence why Red Hat's lowest level of support contract is more expensive than Sun's higest level of support contract.

"The reason they don't pay for support is because they cannot afford it, in which case were they to use any other OS they wouldn't be paying much if anything for that either."

That's not true. A lot of them don't buy support simply because they don't think they will need it, even though they could easily afford it.

"Companies can still make a profit from offering something(s) for less than the competitors,"

They can. But as I aid, Red Hat doesn't. Red Hat's lowest level of support is more expensive than Sun's highest level of support.

The vast majority of Linux distros running on servers, are not paid for. If they were, then Red Hat should have a lot more market capitalization value than they do considering how popular Red Hat Linux is.

Reply Parent Score: 1

RE[7]: One size fits all?
by Celerate on Wed 21st Dec 2005 04:35 in reply to "RE[6]: One size fits all?"
Celerate Member since:
2005-06-29

"Sure. and those businesses that to pay for commercial support are supporting all the ones that don't."

It's obvious you're going to argue this all week just for fun, so this is my last answer and after that you'll be arguing with yourself.

Companies build business models around providing a product for free and then making money off the services that people then pay for to accompany the free product. In this case the free product is a Linux distribution and the service people pay for can be any combination of the following:
- Access to a special package repository
- Priority access to new software
- Service by phone and e-mail
- Early access to new versions

People and companies will often try a free product before paying anything, this introduces them to the product and gives them a good chance to find out that they like it. If they do like it they'll often pay for some subscriber extras if they can afford it, if not they'll often pay for a boxed set to reward the company for making a good product. The fact that the product is available freely for an indefinite period of time doesn't stop people from paying for it, if anything it encourages them to keep using the product and increases the already good chances that perspective customers will pay for it.

If people don't pay for the product other costomers don't pay extra to cover for that. Free versions are given away through low cost means, usually as a download which by being hosted on several third party mirrors and costs very little compared to income.

"That's not true. A lot of them don't buy support simply because they don't think they will need it, even though they could easily afford it. "

Saying "A lot of them" isn't true either. Sure some people can afford to pay for support but don't because they don't need it. Either way, as I've stated above the ones who don't pay don't cost the company much either, and they could easily become paying customers when presented with the bonuses of what a marginal amount of money can get them. Even if people only buy a boxed copy of the distribution with printed manuals, extra software on a CD, and nice looking profesionally made CDs that's still enough to support the company and please the customer.

"They can. But as I aid, Red Hat doesn't. Red Hat's lowest level of support is more expensive than Sun's highest level of support. "

Actually that proves what I've said, Sun is trying to make more money by selling for less than Red Hat, and assuming customers feel the product is worth the price they'll bite. If Red Hat offers more features, better support or some other bonus with their higher price then they can price higher and still have lots of customers. The point is that most people care more about what they are getting for the price than what the price itself is.

"The vast majority of Linux distros running on servers, are not paid for."

Actually the vast majority of comercially run Linux servers are on payed support contracts. I've spent a long time looking at different commercially run web hosting services, all the ones that offer Linux also have contracts with the distributiors that offer support contracts.

You're saying that looks like nothing more than a wild assumption, or at best hearsay.

"If they were, then Red Hat should have a lot more market capitalization value than they do considering how popular Red Hat Linux is."

Again this either a wild assumption or hearsay.

You think you know how much Red Hat is making off sold support contracts, as well as how many people use Red Hat Linux on servers? I highly doubt that.

Red Hat also isn't the only distribution providing Linux, they wouldn't get payed for people using Novell Linux, Novell would. The same goes for people using Linspire, if they want support they don't pay Red Hat, they pay Linspire.

Reply Parent Score: 1