Novell has been positioning itself as the Avis of Linux, a distant but gaining Red Hat competitor that "tries harder." Like Oracle, Novell argues that it can give customers Red Hat value at a lower price.
There's just one problem with this marketing spin: the "low-cost alternative" to Red Hat isn't Novell. It's CentOS. And CentOS is free as in $0.00.
It's true that as related in its recent earnings call., and that this no-cost alternative to more expensive solutions like Red Hat is a real threat to Red Hat. This is no doubt why Red Hat has made "free-to-paid" a core element of its ongoing strategy,
But it's a much bigger threat to Novell and Oracle, both of whom are trying to position themselves as cheaper alternatives to Red Hat Enterprise Linux.
If a customer really wants Red Hat at a lower price, they're not going to move to an incompatible distribution that may or may not run their applications properly. They're going to jump to CentOS, which is basically a carbon copy of RHEL, minus the trademarks (and price tag).
Oracle, for its part, is clearly not in the Linux market. It's in the market to eradicate Red Hat, so as to claim top-to-bottom control of its software stack. But even as Oracle tries to squeeze Red Hat into oblivion, CentOS provides an excellent hedge against commercial competition from Oracle (and Novell), making its pitch ring hollow.
CentOS: Red Hat's biggest annoyance and greatest friend?
It's not dissimilar to as IDC has also suggested, is to succeed in its anti-piracy efforts., especially in emerging markets. Quite possibly the worst thing that Microsoft could do,
Were Microsoft to raise its pricing above $0.00 in such markets, suddenly Linux would look like a much better alternative.
Back to Novell and Oracle. It's not enough to try harder. Red Hat has created a dominant global brand that CIOs trust. It's not worth a few dollars here and there to disrupt that to shift to SUSE or Oracle Enterprise Linux.
Not when those CIOs can shave 100 percent of their RHEL subscription costs by moving to CentOS.
I know some CIOs who have, but they tend to be enterprises with lots of developers that are comfortable supporting themselves. Fortunately for Red Hat, few CIOs care to take that risk. Unfortunately for Novell and Oracle, those who do want to save all of their Linux subscription fees, not just some of them.