OpenLogic attacks Red Hat with lower-cost alternative

CentOS support from a trusted open source vendor could give Red Hat customers a reason to replace RHEL or negotiate a better deal

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Earlier this week OpenLogic announced commercial support for CentOS, a Linux distribution derived from Red Hat Enterprise Linux (RHEL). The CentOS distribution is ostensibly RHEL source code with Red Hat's branding and artwork removed.

Some asked if OpenLogic was "stabbing Red Hat in the back." OpenLogic positioned the move, not unexpectedly, as healthy competition. OpenLogic's Kim Weins explained that OpenLogic customers have been asking OpenLogic to provide Linux support for some time now.

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"We do have a value-based approach for OSS support -- customers want OSS support, but want it cheaper," Weins said.

How, if at all, will OpenLogic's support for CentOS impact Red Hat's revenue?

Well, Red Hat has already proven itself in the face of Oracle offering a Linux distribution based on RHEL. Novell also offers low-cost RHEL support for up to three years during a migration from RHEL to Novell Suse Linux Enterprise Server. And yet, Red Hat's Linux revenue is growing in the 20 percent year-to-year range -- very respectable, especially in today's economic climate.

For some customers, the OpenLogic CentOS offering becomes a negotiation tactic with Red Hat. But customers already had the option of using Oracle Unbreakable Linux (OUL) during Red Hat negotiations. And, well, Red Hat still sports a 20-plus percent growth rate.

Then there are joint OpenLogic and Red Hat customers. Based solely on Red Hat's market share, I'd guesstimate that a large portion, upward of 70 percent, of joint OpenLogic and Red Hat customers are using RHEL today. These joint customers will begin to think seriously about their RHEL investments. Some will begin by separating their RHEL deployments into "mission critical" and "less than mission critical" categories. RHEL will remain the operating system of choice for the former, while CentOS could begin to displace RHEL in the latter.