How Red Hat killed its core product

[rolf]

—and became a billion-dollar business
Some juicy tidbits for the guru-mba's, maybe.

Once again, credit for my sources starts @dslreports.com

Red Hat CEO Jim Whitehurst

A decade ago, Linux developer Red Hat faced a decision that would make or break the company: whether to stop producing the very product that gave Red Hat its name. The company was built on Red Hat Linux, but when Paul Cormier—now the head of Red Hat's technologies and products group—joined the company as vice president of engineering in 2001, he knew Red Hat's devotion to open source alone couldn't create a business model capable of standing up to the Microsofts and Oracles of the world. He pushed for drastic action. To move from small player to big-time enterprise software competitor, Cormier argued that Red Hat had to ditch the freely downloadable Red Hat Linux. Instead, it should replace Red Hat Linux with a more robust enterprise software package that maintained the principles of free (as in freedom) software without actually being free (as in price) to customers. more...

[viking60]

If all Red Hat did was give away software and sell technical support, "we'd be a tiny little company that is marginally profitable," he said.

That is what Mandriva did!

RedHats secret is the confidence that businesses have in them. They sell security - they Guarantee that it works. And that guarantee means something. Making the Businesses all warm and cuddly because they hate surprises.
It is worth a lot to them so they are glad to pay.

[R_Head]

Did I said that before?

I have been saying people will pay for Linux if the costumer support is there.

If you look at it from the automotive perspective. If you buy a car and the factory does not makes parts for it but everybody is welcome to modify and make parts as need it the nobody will buy the car. It will be such a mess that people will dread the time when the car breaks. The Auto Industry thrives in Services and you can pick and choose what mechanic to go to. Also, you can get either the OEM or Aftermarket parts. Is your choice at that point. If you want to modify the design of the car, nobody will stop you with the exception the Factory Warranty will be voided.