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Linux's commercial destiny in doubt

Tim Landgrave Tech Republic

Published: 25 Sep 2003 12:35 BST

What's a Linux hosting company to do?
Linux advocates will say that Red Hat’s move is insignificant because hosting companies can simply shift to other distributions. While this is technically true, companies will still have to pay for the difference in the quality of support they receive from other companies vs. what they receive from Red Hat. Either way, their costs go up to some degree. Moreover, potential price increases from Linux hosting companies to cover the additional licensing and support costs will make the costs of hosting and supporting Linux closer to the costs of using Microsoft’s Windows Server 2003 operating system. Hosting companies that have favoured Linux for its "free ride" are in for a huge pricing shock over the next 12 months while other companies seek to create profitable ventures from what has been a predominantly "free" operating system.

Why Red Hat matters
Many Linux advocates who are appalled by Red Hat's "money grab" have been very vocal about their new distaste for the company. Some even go so far as to suggest that Red Hat has outlived its usefulness. But they fail to understand the importance of a healthy company like Red Hat for the entire Linux industry. Without strong, independent Linux distributors, the hardware companies that have taken over Linux stewardship have no reason not to begin creating versions of Linux that take advantage of their specific hardware features and configurations. Releasing this code back into the public domain as required by the GPL has little effect on them, because users would have to be able to duplicate the hardware features to take advantage of their enhancements. In the end, the fate of Linux begins to look a lot like that of its older brother Unix. The resulting fragmentation would leave companies with no choice but to purchase all of their hardware and software from a single source -- a specific hardware provider.

The company that is most likely to win in this scenario is IBM. With IBM and Red Hat the most likely losers if SCO succeeds in its current lawsuit, IBM could choose to "own" Linux now in one of two ways. First, it could buy SCO outright and exert its claim on Red Hat, owning both the Linux IP and its largest distributor. Second, it can wait until Red Hat goes bankrupt either because its pricing drives customers away or because the cost of defending against the SCO lawsuit drives it out of business. Either way, hosting companies, corporations, and IBM's competitors have to begin evaluating their options while the largest independent Linux distributor -- and in fact the entire Linux distribution model -- finds out whether there’s a place in the value chain as Linux usage continues to grow.