"The downturn is good foropen source software," says Red Hat
chief executive Jim Whitehurst.
Red Hat, whichmakes money selling services rather than
software, says itis experiencing higher demand for Linux in the
downturn. Its revenue last year was $500m and it is growing 30%
year-on-year.
"We have an embarrassment of opportunities. In a difficult
economy our message sells well," says Whitehurst.
Since open source companies do not rely on revenue from customer
software upgrades, Whitehurst says users are not forced into
upgrading or buying extra functiuonality they do not require.
"With the Red Hat business model, when we add new features it is
just code update under subscription, so it is not a revenue stream
for us. This means that the customer gets the functionality its
business needs as part of the normal subscription cost."
Whitehurst claims that users who have migrated from proprietary
software to open source have experienced dramatic cost savings,
while improving the performance of their IT systems.
Why open source is cheaper than commercial software:
• No licence fee for the software. You only pay for IT support
and services.
• There is less of a need to upgrade because the supplier makes
money on services, not software.
• Open source software is based on industry standards, which may
provide ways to lower costs.
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