Digital Convergence Weblog: Oracle and Red Hat: capitalism in evolution?

October 27, 2006

Oracle and Red Hat: capitalism in evolution?

Ricardo Perez Garrido

A business model based on open source code means that you need to be good at giving your customers support and problem solving capacities at any time. Red Hat, after many years trying to get to that point, is in the right path to that quality of support that gives them the ability to compete with bigger companies. The combination of low cost development, low prices for the software, and high level maintenance for a fairly low price is a great business proposition for many companies.
That is probably what Larry Ellison though when Oracle decided to take Red Hat's code, give it a different name and offer an even higher level of support and maintenance, something in which they are good, really good, with many clients in the fortune 500 list.
The business model is only another sign of the potential that open source code offers for new business models. Is the movement ethical? Well, the code is supposed to be free, so if you are good enough to offer a better level of support than the original company selling that service, why not? But also, how does this change the rules in the open source world?

Posted on 27 October 2006 in Open Source / Linux

Comments

This will probably take a hit on RedHat, Mandrake, SuZe and the likes but will enrich the open source movement by throwing a ton of money to it.
Its clear this trend is gaining momentum and will become Microsoft's nightmare (even more so) in no time. With the launch of Vista, MS will try to sell (as they usually do) based on more service, reliability and accountability of it's products.
Moral issues aside, this is a great impulse to OS.

Posted by: Alvaro Prendes at November 10, 2006 06:25 PM

Comments

Post a comment