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Open source to follow JBoss to the cloud?

Red Hat has been moving some of its services to the cloud, the latest being JBoss Application Server offered on's EC2. Is this a viable open-source business model?

Following on its successful launch of Red Hat Enterprise Linux as an Amazon Elastic Compute Cloud service, Red Hat is now offering the JBoss Application Server on EC2.

It's yet another example of open source truly becoming a Web-enabled service, rather than a mass of packaged bits and bytes. And it comes at a reasonable price:

Red Hat is charging a fixed subscription rate of $119 per month for JBoss Enterprise Application Platform, or a variable fee, starting at $1.21 per instance, per hour, with fees depending on the size, bandwidth, and storage of the services purchased...Customers can either license JBoss on EC2 from Amazon and receive a virtual image of the software, or make their own subscription of JBoss available on Amazon's compute cloud.

The more Red Hat and others can deliver their software as Web services, the less trouble there will be with getting a fair return on R&D investment in commercial open source. It makes a development service into a Web service, which looks an awful lot like a product that people are used to buying. Maybe an answer to Savio's fair critique?