As Red Hat CTO Michael Tiemann is quick to point out, the company has substantial support among the enterprise application vendor heavy lifters. Like SuSE, Red Hat has quite a few success stories, but probably has done better in the United States than SuSE, a German enterprise. Both revenue and profit margins have grown consistently over the past several years (see "Red Hat Financials," left) and analysts have noticed. Red Hat has consistently received a majority of "buy" recommendations from Wall Street.
Beyond the key application vendors, Red Hat can boast an impressive list of customers. BEA's Web site touts Red Hat's "Enterprise Proven Linux," complete with a Red Hat logo. And Amazon.com, the poster child for enterprise-class applications on Linux, runs Oracle on Red Hat servers. Other large customers include Google and the U.S. Army.
When we asked Tiemann how he's getting in the door of IT departments, he answered, "They're calling me up." Customers are coming to Red Hat asking about Microsoft alternatives. Tiemann says he believes the open nature of Linux leads to competition among IT suppliers--an idea he says is attractive to customers.
To remain accountable to its customers in the long term--the goal of every commercial open-source vendor--the company has dropped support for the free Red Hat Linux. From now on, Red Hat will support only RHEL (Red Hat Enterprise Linux). The operating system comes with one year of free support and what amounts to a compilation copyright that prevents users from duplicating the ISO (the exact image of the Linux distribution CD-ROM).
Still, any open-source vendor has to keep close ties to the community. To do so, Red Hat simultaneously launched the Fedora Project as a community service. Fedora is essentially Red Hat's experimental Linux that comes without commercial support. This is a good thing, as it lets Red Hat more clearly delineate which activities are profit-making and which are community and/or marketing activities. Fedora isn't likely to cannibalize Red Hat's commercial sales; commercial customers need support and Fedora has none (for more on Red Hat's Fedora, see "Red Hat Linux Morphs Into Fedora Core," in our review of RHEL 3.0).
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