Red Hat is under siege.
When Oracle launched a direct attack on Red Hat's business model last October, Red Hat's share price sank by 24 per cent. The database company announced it was going to be redistributing Red Hat Enterprise Linux, the OS that commands a 61 per cent share of the Linux market -- and providing support for it -- for half the price that RH charges. And this week it added management tools to its Linux support service.
Now, it's not alone: Sun has thrown Solaris into the mix.
Aiming to undercut Red Hat with a support package that makes open source Solaris half as expensive to run as Red Hat's Linux, Jim Craig, Sun's UK software marketing manager, pitched open sourced Solaris as a contender.
"It offers the same benefits as the competition as it's free to download and use, and it runs on commodity hardware," he said.
Craig added that Solaris has the technical features, including containers and security, for developers to build applications. "It's suited to use by a team of two developers to systems supporting thousands of users," he said. We also have hundreds of applications, he said.
Previously, open source customers went to Linux, reckoned Craig, saying that they now believe Linux didn't do what they expected in terms of reliability, security, cheap deployment and management..
"The goalposts have moved," he said.
All this has happened, reckoned Craig, as a result of Solaris being open source and therefore freely available on multiple platforms. Up to two-thirds of Solaris deployments are on non-Sun hardware, he said.
"IBM and HP users see us as an alternative to their Unixes. We don't know how many then migrate to the Sun hardware platform, but when the hardware refresh comes up, they talk to us about buying Sun hardware." Craig reckoned that he "didn’t have access to the figures" that would explain how many of those actually converted to Sun hardware.
He said that Sun's ability to offer a complete package was part of the reason for its alleged success. "We have a software and service stack, we have middleware -- that's where SeeBeyond comes in -- plus the Sun Ray virtual display.
"Historically, we would work with an ISV to get Solaris up and running, where we now offer the ability to extend our offerings.
"Yes, Red Hat is a benchmark. It wasn't easy to compare us with Red Hat before but now, with subscription pricing, comparison is much easier."
Craig said that an additional driver for Solaris' increasing acceptance was the availability of unique, deep analysis tools such as DTrace.
Some support has come from analysts to bolster Craig's claims for the technical virtuosity of the product.
New business model
And clearly the success of Red Hat's business model, which converts open source software into a source of cash by providing service and support contracts is a lesson that was not lost on Oracle -- and is now one that Sun is emulating.
"It's obvious that Sun is gunning for Red Hat," said Jonathan Eunice, founder of the technology research firm Illuminata. Sun's Solaris annual support contracts range from US$240 to $1,180 for one- or two-socket x86 servers, depending on whether the buyer chooses the basic or premium plan. The basic plan costs about 40 per cent less and the premium plan about 50 per cent less than comparable Red Hat plans, according to Sun spokesman Bob Wientzen.
Yet, as many industry observers have pointed out, in going down the industry standards route -- not least the big x86 question -- it's harder for Sun to differentiate itself.
Craig sees no problem.
"We have technical differentiation because we go for industry standards and open source -- so there's no reason not to use Sun," said Craig. "We can run on more platforms than Red Hat Linux. And we've managed the balance between technical innovation and industry standards. It's to do with the way that we put the pieces together."
That said, Craig confirmed that Sun would continue developing its proprietary SPARC processor architecture.
But isn't Sun turning itself into a transparent copy of Red Hat? "Our business model is different from Red Hat or because we've changed the way we offer software to the market," said Craig. "We are all open source now, including Java. It's all about getting paid when the customer gets value from us, rather than charging upfront.
Armes clarified: "We use RAS, predictive self healing, we allow you to plan outages and hardware replacements, and DTrace allows you to update a running system, so it's easier to diagnose. We have good live customer examples."
But should IT managers consider Sun as a reliable supplier, given its poor financial position? Craig rebutted suggestions that Sun's wretched profitability record -- it hasn't made a profit for 12 straight quarters -- spells doom for the company in the long run. "We plan by the end of fiscal '07 to return to profitability," he said. "Financial analysts say that Sun gets the thumbs up for technology and strategy, and there's been a major restructuring. We're growing in systems software, storage, and services. We're going in right direction."
For the future, European Solaris engineering director Chris Armes foresaw competition not just with Red Hat but with Oracle too.
"As our software portfolio expands it'll be about co-opetition," he said. "But yes, we will be competing with Oracle Fusion and the middleware stack."
So if you believe Sun, the future is rosy and its OS is being taken up by multiple types of customer. What's more, it plans actually to make a profit.
The question still remains whether non-Sun houses will be interested in switching OSes -- especially since many argue that, with the advent of the virtualisation hypervisor, the days of the OS in the data centre are numbered. That said, moving towards becoming a support and services company has traditionally done others, including IBM, little harm.
Could it be that Red Hat will, after all, be the victim in all this? Assuming of course that someone doesn't buy it first...