Red Hat to sell open-source buddies' wares

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 marks a new stage both in Red Hat's competition with proprietary software companies, such as IBM, Microsoft 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 IBM and Oracle, said Paul Cormier, executive vice president of engineering, at an event in San Francisco to launch Red Hat Enterprise Linux 5.

He said: "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."

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.

Asay said: "This is a big step in making Red Hat the hub of the open source ecosystem, which I think is its rightful place. 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."

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.

Open source software companies available through the exchange include: Centric CRM, Compiere, Enterprise DB, Groundwork Open Source, JasperSoft, MySQL, SugarCRM, Zenoss, Zimbra and Zmanda.

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 on 9 May 9 in San Diego.

Red Hat will get a percentage of revenue from the partnerships. 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, said Mike Evans, Red Hat's vice president of partner development. Red Hat will also offer trial versions of all the products, Mattox added.

The Red Hat Exchange announcement accompanied the debut of Red Hat Enterprise Linux 5. That product will come in two versions: the basic Rhel 5 and the higher-end Rhel 5 Advanced Platform.

Rhel 5 costs $349 per year for a server with up to two processor sockets and basic support, which includes 30 days of phone support during business hours and a year of web-based support. A standard subscription costs $799 per year and includes a year of phone support during business hours. Premium support costs $1,299 per year.

Red Hat charges a big notch more for the Advanced Platform version - $1,499 per year for standard support and $2,499 for premium.

The prices, which match those of the earlier Rhel ES and AS versions, may sound steep for open source software that can be obtained for free. But Red Hat prefers to draw the comparison with the fees customers might have to pay for commercial software.

Cormier said: "The value that used to come from four or five vendors now comes in one open source platform, saving tens of thousands of dollars for each server."

Stephen Shankland writes for CNET News.com