Red Hat bands with open-source allies

The Linux leader will sell partners' open-source software, sharing revenue and fueling competition with proprietary rivals.

SAN FRANCISCO--Red Hat, planning a new expansion beyond its core Linux operating system business, will launch a service later this year called the Red Hat Exchange to sell partners' open-source software.

The service, which the company announced Wednesday, marks a new stage both in Red Hat's competition with proprietary software companies such as Microsoft, IBM and Oracle, and in its alliances with open-source companies. The Red Hat Exchange is designed to help bring a much broader collection of open-source options to market, piggybacking on Red Hat's brand and customer connections.

Red Hat chose the approach even though it will increase competition with some of its business partners such as Oracle and IBM, said Paul Cormier, executive vice president of engineering, at an event here to launch Red Hat Enterprise Linux 5.

It's Red Hat finally exerting the kind of leadership it should have exerted years ago.
--Matt Asay
Marketing VP, Alfresco

"We can choose to stand in the way of these open-source technologies, or we can get on the bus and drive. We're going to choose the latter," Cormier said.

The Red Hat Exchange (RHX) is evidence of a more inclusive approach at Red Hat, said Matt Asay, vice president of marketing at Alfresco, an exchange partner and a competitor to EMC's proprietary Documentum document-management software.

"This is a big step in making Red Hat the hub of the open-source ecosystem, which I think is its rightful place," Asay said. "I think it's Red Hat finally exerting the kind of leadership it should have exerted years ago. (It) just a few months ago acted like it was Red Hat against the universe--open source or proprietary companies."

And MySQL, an open-source database supplier, gets to draft off Red Hat's clout, said Zack Urlocker, MySQL's executive vice president of products.

"RHX acts as a good housekeeping seal of approval. It shows that MySQL is certified and tested and works well with RHEL, which is by far the most important platform for us," Urlocker said. "And RHX gives us a broader reach and more direct penetration into the Red Hat installed base."

Other open-source software companies will be available through the exchange as well: Enterprise DB, JasperSoft, SugarCRM, Zenoss, Zimbra, Zmanda, Compiere, Groundwork Open Source and Centric CRM.

Under the Red Hat Exchange, customers will be able to buy support subscriptions for a number of open-source applications. Red Hat will market the software, provide support and distribute software updates through its Red Hat Network, said RHX Director Matt Mattox.

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The exchange partners compete directly with various proprietary software companies, but Red Hat has already shown a willingness to tangle with those rivals even when they're also business partners. The most prominent case is Oracle, which sells Java server software that competes directly with the JBoss products Red Hat acquired last year. Later in 2006, Oracle struck back with its Unbreakable Linux product, through which it's trying to distribute a clone of Red Hat Linux while undercutting Red Hat's support prices.

Red Hat partners Oracle and IBM didn't respond to requests for comment.

Mike Evans, Red Hat's vice president of partner development, said the Raleigh, N.C.-based company will aggressively promote the exchange. "It's going to be big," he said.

Red Hat wouldn't say when this year the exchange will go live, but it's in limited release with some customers now. One possible launch date is the Red Hat Summit that begins May 9 in San Diego.

Red Hat will get a percentage of revenue from the partnerships, Evans added. The new software won't cost more than buying Red Hat Linux and the other packages separately, and they may cost a little less together, Mattox said.

Asay was happy with the revenue split. "They are being fair. They're doing most of the marketing, providing the infrastructure to take payments and process payments, and providing first- and second-line support," he said.

The company will use customer feedback mechanisms to rate the open-source options, similar to Amazon.com rankings, Evans said. Red Hat also will offer trial versions of all the products, Mattox added.