I am hoping that someone can answer some questions that I have regarding how the Open Source business model works with companies such as Red Hat.

I was looking at their site and I saw that you can purchace RHEL AS Premium Edition for $2499. My understanding is that this is per year and per system (server). Is there anything that keeps me from loading this on any number of servers (not that I want to, I am just trying to understand how this works)? If I put it on multiple servers will only one be a able to get updates?

How does this cost compare with purchasing Windows? Does MS have the same setup (X dollars for one server per year for updates and unlimited support)?

When one purchases RHEL from Red Hat, is everything that they are getting released under the GPL? If so, I would assume that I could put it on as many machines as I want. Is there anything stopping one from doing so? Is that $2500/year JUST for the updates and the tech support?
If I buy one version of RHEL and put it on 20 servers, can I not get unlimited support from Red Hat at the paltry sum of $2500/year? That does not sound right but what would stop it?

If anyone can put RHEL on all of the devices that they want, it would seem to me that RH could be in a bad position when someone like Oracle comes along offering the same support for half of the price. Of course I have never dealt with Oracle support so it might even be a nonissue...

Thanks,
Todd

Mostly they sell support. In the case of RHEL, there are several clones out there that do provide the same software. Where Red Hat excels is in being an established corporation. Linux is a very fragmented community, and what works on one distro may not work on another. So, whenever folks from the proprietary world make something for Linux, RHEL is usually the linux they choose, and thus Red Hat can say that there are more programs certified to be RHEL-compatible. Suse would like to take Red Hat's place, but we'll see how that goes.

leupi: Answers to many of your questions can be found in the Redhat Subscription Agreement for your location.

It's all about "value added". Starting with free SW, you can add value in a number of ways:
--Service and Support
--Packaging and Distribution--eg a boxed set with manuals
--Training
--Selling computers with Linux installed

I prefer the Ubuntu approach---SW always free, support available separately

Ok, so here's the deal...I'll try to answer your questions.

When you purchase a Red Hat Enterprise Linux AS Premuim subscription for 1 server, you get support and updates for that system. There is nothing stopping you from installing the bits on another server, however per the End-User-License Agreement (and entitlement limitations) you are not able to obtain updates and support on any system that does not have an entitlement. I believe that all the packages are GPL. From a support standpoint, if you were trying to get support for more than one server, we would ask you to pruchase additional entitlements before providing support for more than one server. Of course, there are obvious things that you could say that would indicate that you have more than one server that we pick up on in support. The most obvious one is if you're setting up High Availability or Clustering, well, because you can't to that with one server

In general, people will always find ways to beat the system, but let's face it, if you see value it purchasing the subscription, then you'll purchase the subscription. If you want to spent your days trying to maintain and manage a server room of 25 servers with one subscription, then tip of the Fedora to you, that's a lot of work. One value that many people don't talk about is the way Red Hat Network makes things easy to manage. Once you learn how to use it effectively, you can easily manage a higher number of servers. There are additional add-ons for Red Hat Network that allow you to do management and provisioning.

But to generallize things, what I find most people do is for a project is that for a proof-of-concept, use a freely downloadable version of Linux like Fedora or pick your favorite flavor of the day. Of course, there are evaluation copies of Red Hat Enterprise Linux for a you by filing out a form. (Not sure where that is on the website.) Then, once a proof of concept works, they will look at other options. Of course, if the server is going in the data center and you want a fully patched system that is more stable, many choose Red Hat. Of course you can always go with Fedora and get your updates from a Yum repository, but I think it really depends on your requirements. I think it's important to note that Red Hat is not charging you for the bits, the subscription price is for the delivery of the software, updates of the software, and technical support of the software. These can be qualified as "services" as another poster pointed out.

To take it a step further, we are starting to see many companies go the open source route with applications. Let's talk about SugarCRM for instance. They have a tiered offering, Sugar Open Source, which is the freely downloadable version, then Sugar Professional (I think is what it's called) which is their fully supported version. So there is a a little bit of the same business model in there. They've got the free stuff which developers will typically use and business folks may use to test things out. Then when they move over to something they want supported, they go to the paid version.

I hope this helps.

Wow, that was great! And for the record, I really am just trying to figure out the business model, not trying to set up a rack of servers and only pay for one

I am very interested in how open source works in the business and you did clear up a lot. I hope that you don't mind if I come back to you with questions now and then.

Thanks again for all of the info,

Todd

No worries. I think the model is really awesome, especially when you finally "get" the subscription model applied to open source and see the elements coming through in recent years deemed service as a software (SaaS). Same model applied to a user-based subscription model and the hosting company maintains the software. Think 3 bubbles.

When you look at the old software model where you pay a buttload of money for an application then you pay 20-30% for support for the next 2-3 years....then you have to pay for an upgrade. Yikes! Your budget just went down the tubes. Compare the subcription model that Red Hat helped pioneer in the software industry and when it clicked for me, I'm like, who would buy the old way?