The company will add a new subscription service under which Red Hat will send software fixes and upgrades to customers paying $9.95 a month per computer, said Paul McNamara, Red Hat's vice president of products and platforms. In the future, Red Hat will expand the service to include more expensive options that can monitor the performance of customers' computers and diagnose problems before they become severe, he said.
Linux, a clone of the Unix operating system and a competitor with Windows, is a free download. Red Hat, though not profitable, makes money selling Linux software packages along with installation books, technical support and customization services.
The subscription service, which Red Hat is offering free for 60 days to hook as many users as possible, can be configured just to deliver software updates or to actually install the update, McNamara said.
Red Hat and its arch rival, Microsoft, may not agree on much, but they're both betting on the appeal of subscription services. Red Hat's new service resembles Microsoft Windows' update feature, and Microsoft chief financial officer John Connors said subscription services will become increasingly important for Microsoft.
"We see the model of software distribution moving online over the next several years," Connors said at a Banc of America Securities conference in San Francisco this week. In addition, Microsoft also hopes its .Net initiative will encourage people to rent software hosted on remote servers instead of buy it outright.
"Subscriptions allow them to establish a continuing revenue base with their customers," said Summit Strategies analyst Dwight Davis. "If they can get people used to having upgrades magically appear, that's a much more compelling business model for Microsoft, in terms of the amount of user contact and the amount of marketing they don't have to do."
The service part of the new Red Hat Network also will extend to Red Hat's new embedded operating system push for non-PC computing devices. As previously reported, subscription services will be a part of Red Hat's embedded OS strategy, with the company charging recurring fees for software updates and service.
The subscription plan is one of a host of embedded announcements Red Hat plans to make next week at the Embedded Systems Conference in San Jose, Calif. A host of other embedded Linux companies, including Lineo, have their own announcements in the pipeline, and Amirix is working on creating an embedded OS based on the Debian version of Linux.
Also on the embedded front, Red Hat will announce next week that it will use its Ecos operating system for the heart of part of its embedded effort. Ecos will be used in devices guaranteed to respond to commands within a specific span of time, known in the industry as "real time."
"Ecos will become the real-time component of Red Hat Linux," McNamara said. Ecos behaves like Linux when programmers write software that conforms to a Red Hat standard called Elix.
In addition, Red Hat will release software called "Redboot" that allows embedded Linux devices to switch on quickly, McNamara said.
Subscription revenue, the new version 7.0 of Red Hat Linux and the embedded push will be important advances for the company, the leading seller of the Unix-like operating system. Analyst concerns about Red Hat's revenues sent the company's stock down 16 percent last week, and the share price has continued to sink.
The new version of Red Hat's Linux also will come with better support for Universal Serial Bus (USB), which is used to connect keyboards, digital cameras, scanners and a host of other hardware to computers.
The improved USB support in Linux is one of the major features coming with an upcoming upgrade to version 2.4 of the heart, or kernel, of Linux. Though the existing 2.2 kernel has modest USB support, programmers have "backported" the new 2.4 features to 2.2.
McNamara reiterated the position that it's better for the new kernel to work reliably than for it to arrive soon, but he acknowledged he'd love to be able to offer its improvements in a product. "As a marketing guy, I'd love to get that functionality onto the marketplace," he said. In particular, he touted improved multiprocessor support, including the ability to take advantage of computers with as many as eight CPUs.
"Our best estimate is it'll be production-ready by the end of this year, maybe early into next year," McNamara said, adding that the company likes to let the new version settle a bit before releasing it in a Red Hat product.
Other new features of version 7.0 include support for OpenSSL for Web servers that need to set up secure, encrypted communications; increased security for home users with high-speed connections to the Internet; better 3-D graphics support; and new programming tools.
The new version also includes "Tux," the kernel-level software that dramatically improves the performance of the Apache Web server software used to run Web sites.
The standard edition, with 60 days of online support, costs $29.95. Deluxe, with 90 days of online support and 30 days of phone support, costs $79.95. The professional edition, with 90 days of online support, 30 days of phone support and 30 days of support of Apache support, costs $179.95.
Red Hat also offers some customers other support services for a fee, including round-the-clock support for its biggest customers.