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Thank you, robin. This is quite a reasonable response to what's going on.
This would make a good editorial/story ... it takes all of the issues that
have been bandied about in the Linux press over the last few months, and
makes a good case study of what's both right and wrong with Linux in
Business.
My $.02...
Russell
On Sunday 16 June 2002 09:48 am, you wrote:
> >He said "sure, but we won't pay you anything...we don't use a channel."
>
> Red Hat has been notoriously horrible about working with VARs and ISVs.
> Linux-oriented companies in general have been this way, and I believe
> this has been one of the biggest holdbacks for Linux adoption by small
> and medium-sized businesses -- and smaller school districts and
> government agencies that don't have inhouse systems staff.
>
> The way a lot of IT contracts go out is a business owner or a committee
> draws up a list of needed functions, then sends it out to bid and
> expects contractors to come back with a bid for the whole package,
> including hardware and software plus a contract for maintenance and
> upgrades over the next three to five years.
>
> Microsoft and most of the commercial Unix people give nice discounts off
> of list so the local (and a few regional or national) systems vendors
> and service organizations that do this sort of thing have a profit
> margin, just like a car repair garage gets parts for less than the NAPA
> store will sell them to you, then sells them to you at "list price" as
> part of your repair bill.
>
> IMO, VA Linux's refusal to work with systems vendors and packagers was a
> big reason the company lost so much money in the hardware business, and
> why VA's hardware business almost went away entirely when the small
> crowd of cot-com direct purchasers, mostly based in/near Silly Valley,
> that had been VA's loyal "direct" purchasers, stopped buying. Sure, it
> sounded good to say, "We only sell direct," and that may have kept
> margins up, but in the end it was a not-smart decision, because a
> systems vendor that could provide a mix of Linux-running servers from
> Compaq and desktops running Windows from Dell or a clone shop as a
> *complete turnkey system* including software and service was going to
> get a lot of sales no company with a limited product line could touch.
>
> Note that most of IBM's Linux initiative depends on "IBM Global
> Partners," mostly small businesses (like Dave's), that customize and
> modify (and mark up) IBM hardware and software products and handle
> front-line installation, training and service locally. IBM was a
> notoriously "direct sale or go away" company for many years. This change
> to a channel-type business is as radical in its own way -- for IBM -- as
> the company's Linux initiative, and the two go hand in hand; Linux can
> be modified by IBM partners/vendors in ways no proprietary operating
> system can, and the same goes for IBMs WebSphere and other
> channel-oriented software. The local systems vendor -- the Dave, as it
> were -- knows local business conditions and local needs better than IBM
> ever will, and he can provide a level of personal service IBM cannot,
> while IBM can provide a level of technical problem-solving muscle the
> Daves can't touch. (I was at -- and wrote about -- the press conference
> where IBM announced all this.)
>
> Jack Bryar and Steven J. Vaughn-Nichols have both written about the lack
> of Linux companies' respect for ISVs and systems packagers repeatedly on
> NewsForge, and those articles may have gone right by the average Linux
> user, but I assure you the business types read them carefully, printed
> them out, and discussed them at length.
>
> Red Hat is fairly good to hardware OEMs, but not great.
>
> This whole United Linux schtick is an attempt to go after the "channel"
> business, with some other minor doodads tossed on top of it. This is why
> Intel and so many others support it, and why SuSE is being nice the Dave.
>
> This is also where "per seat" licensing comes in. It's not about selling
> X number of CDs and little instruction books in boxes, but about support
> costs. If a Dave sells 10 workstations running Hip-Hop Linux to the
> Tampa United Rap Delights, and charges $80 for the copy of Hip-Hop used
> in each one, and he gets $30 out of each $80 seat license and Hip-Hop
> gets $50, there is some reserve money there to cover support calls from
> TURD to Dave, who can heandle the simple stuff ("I'll SSH in and change
> your password, no problem") and more involved calls from Dave to Hip-Hop
> ("Whenever my client runs MoronMixer and BreastBlaster at the same time,
> their system hangs. Help!").
>
> Red HomieHat don't play this game. Red Homie wants to have big direct
> support contracts with America On Rap and sell hardware makers OEM
> copies of of Red Hat, one per machine distributed with it, and that's
> all. That's the course Red Homie has chosen. Others, including IBM and
> SuSE, have chosen to go the "channel" route.
>
> There's room for both approaches in the world. Microsoft (a small but
> feisty software company in Washington State) makes great use of the
> ISV/VAR channel, but also sells direct support and works with OEMs like
> mad. So don't accuse Red Hat of being like Micrsoft here, because it's
> obvious they haven't learned enough watching Microsoft to figure out how
> important "the channel" can be to their business if they treat it with
> respect.
>
> - Robin
- --
Linux -- the OS for the Renaissance Man
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