Sunday, November 5

Barron’s Red Hat Coverage Is All Wrong

By joe 2 comments

The VAR Guy opened today’s edition of Barron’s and shook his head in disagreement. The financial paper says Red Hat’s revenue will erode amid fierce competition from Oracle and the new Microsoft-Novell partnership.

Sure, it’s no fun when the world’s two largest software companies declare war against you. But let’s not bury Red Hat yet. The VAR Guy says Red Hat has five key strengths that most critics are overlooking. They are:

1. Application support: Businesses don’t buy operating systems, they buy applications. And Red Hat’s application support easily outdistances the number of apps for Novell’s SuSE Linux. If Microsoft decides to port SQL Server, Exchange Server and other apps to SuSE Linux, Red Hat would be in deep trouble. But Microsoft writing server apps for Novell’s Linux is a long shot.

2. Installed base: The VAR Guy believes roughly 70 percent (or more) of North American Linux server deployments involve Red Hat Linux. By contrast, Novell has 15 percent or less of the North American Linux server market.

3. Marketing: Yes, marketing. The moment Oracle announced plans to undercut Red Hat’s service fees, Red Hat countered–aggressively–with a reality check for customers.

4. IBM: Big Blue won’t choose favorites. The company continues to support both Red Hat and Novell. But Big Blue will listen to customers, and most Linux customers are voting for Red Hat.

5. Customer Satisfaction: Red Hat has won CIO Insight’s Vendor Value Survey yet again. And here’s a key piece of data from the survey: If given a choice, 97 percent of Red Hat customers say they’d continue doing business with Red Hat rather than buy a rival product. In stark contrast, only 69 percent of Novell customers say the same thing.

Admittedly, Novell has made progress in the past year or two with SuSE Linux. And the Microsoft-Novell combo will surely force CIOs to evaluate their data center strategies. But that doesn’t mean CIOs are ready to halt new Red Hat deployments or turn to Oracle for Linux support.

Comments (2)

  1. […] improved to $18.2 million compared to $16.2 million in the corresponding quarter last year. Upside: Oracle’s move into the Linux market has had little — if any — impact on Red Hat. And the Microsoft-Novell alliance pushed many open source advocates into Red Hat’s camp. […]

    TechIQ » Archive » 10 Open Source Companies Set to Dominate 2008, December 17th, 2007 at 1:07 pm #
  2. […] by analysts at the moment, yet it’s not too clear who is funding these analysts. Var Guy responds to one them. The VAR Guy opened today’s edition of Barron’s and shook his head in […]

    Boycott Novell » Entering Paranoid Mode in the Face is Paranoia-imposing FUD, December 18th, 2007 at 7:51 pm #

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