Services. In the past few years, as Linux has developed into a more mainstream operating system, a new axiom has emerged — you can’t make much money selling the OS itself, but many companies can make money by selling their services around the OS.
Services. In the past few years, as Linux has developed into a more mainstream operating system, a new axiom has emerged — you can’t make much money selling the OS itself, but many companies can make money by selling their services around the OS.
About a year ago, Tim O’Reilly wrote what I believe to be an incredibly insightful piece on this subject (found online at http://www.oreillynet.com/pub/a/linux/2000/05/09/lessons.html). I think that it is now worthwhile to re-visit this issue and take a close look at how some of the more promising open source business models have been evolving.
The first example that leaps to mind is Red Hat. While Red Hat has derived a great deal of their revenue to date from traditional “service and support”contracts with large corporate customers, it’s clear that they are continuing to look for new models that will support their business. The most interesting of these new models is the Red Hat Network (RHN).
The RHN is based on a subscription model, where users of Red Hat Linux register themselves with RHN. The Red Hat Network will then provide users with constantly updated packages and bug fixes for all of the software that is installed on their systems.
Basic service is free for all users of Red Hat 6.2 or greater. However, many useful premium services are only available for a fee — on a subscription basis. So basically, Red Hat is helping their customers by managing their software for them…
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