Red Hat changes subscription model

As you may know, Red Hat made some significant changes to their subscription model last November.  I hope to clear up some of the questions and concerns I have heard from customers.  If this is completely new information to you, please contact me and I’d be happy to fill you in.  We’ve also created a webpage and a FAQ download with more information.

Since CITYTECH is a Red Hat Advanced Business Partner, I speak with many Red Hat customers daily and have heard their thoughts on the subscription changes.  Through putting together proposals and comparing both the old and new models, I have found that these changes (like all change) are not consistently positive or negative in their reception.

On one hand, many of my JBoss customers will see their price decrease.  This is mostly in cases where they previously purchased the Red Hat Application Developer subscription along with a JBoss subscription for production.  With the new model, the JBoss subscription now includes developer support, so it doesn’t need to be purchased separately.  Some customers can now purchase JBoss bundled with JBoss Operations Network (JON) at the same price (or lower) than what they previously paid for JBoss and developer support.  Basically, their costs stay the same AND they get the JON management tools for free.  It’s a pretty nice deal.

In the other camp, some RHEL customers feel frustrated.  Depending on their server configurations and technical support needs, pricing will increase, decrease or stay the same.  Without an in-depth discussion about their environment, it’s difficult to predict their pricing with the new model.  Fortunately, Red Hat is giving customers at least a year to understand the changes and to budget appropriately.  All existing subscriptions can be renewed at the old model pricing for this first year.  Sometime this year, I highly recommend that all end users contact me to get a budgetary quote for 2012 renewals.

It seems that the most affected RHEL customers are likely to be either large or small companies.  End-users with many multi-socket servers, running multiple guests have the potential to see their RHEL subscription costs increase.  These customers previously purchased RHEL Advanced Platform (AP), which was valid for unlimited socket servers running unlimited guests, in addition to providing advanced features such as Cluster Suite and Global File System.  In the current model, there is only one type of RHEL that is sold by socket-pair (up to two, four or eight sockets), plus the number of guests (one, four or unlimited guests).  To get the advanced features previously part of RHEL AP, end-users can choose the add-ons separately.

Some smaller-sized companies do not understand the need for this change and are frustrated with the new pricing.  In many cases, these customers have purchased multiple RHEL Basic subscriptions to minimize their costs while reducing some of their risk through the availability of web-based technical support.  Since RHEL Basic has been replaced by RHEL Self-Support, they no longer have the ability to contact Red Hat for support.

However, I have found that most of my customers are unaffected by this particular change.  They purchase RHEL subscriptions not for technical support (they typically don’t end up using it anyway), but for the value Red Hat brings to the Open Source Linux software, including the Red Hat Network knowledgebase.  These customers trust the Red Hat certification and the peace of mind that affords, using the subscription mostly for patches and updates.

In contrast, some feel upset and worry that Red Hat does not care about small customers. They are now unsure about the value in purchasing a RHEL subscription when there are “free” alternatives to Linux.  To this concern, I like to remind these customers that a Red Hat subscription includes more than just support – RHEL is an enterprise-level operating system, not just untested, free software.  In addition, I do not believe the competing solutions offer anything less than costly phone support options.  With all Red Hat subscriptions, you receive:

• The ability to deploy solutions with the confidence that your software applications and hardware are fully certified.
• Access to continual enhancements from Red Hat through regular updates that provide additional features and new hardware support.
• Access to the latest bug fixes and security errata.
• Flexibility to deploy any Enterprise Linux release, including future upgrades.
• Access to Red Hat Network’s automated software delivery and update capability.

(http://www.redhat.com/rhel/benefits/)

I say with confidence that Red Hat did not discontinue RHEL Basic because they want to end their relationship with small companies. They listened to feedback and found that most customers with the Basic subscriptions were using them for patching and updating non-production servers, and rarely required technical support.  With the previous two-day SLAs, Red Hat also found that these customers were able to quickly find the answers for themselves, just by accessing this knowledgebase.

By only offering Standard or Premium options, Red Hat is now able to provide even better support to those who need it.  As always, we recommend that if there is the slightest possibility that you may need technical support, that you purchase a Standard (Business Hours) or Premium (24×7) subscription.  While this does increase costs, the extra $400 you spend annually is a small price to pay for the security of having Red Hat’s world-class support available when you need it.  In today’s tough economy, we understand that any increase can be difficult, but down-time can be much, much more costly.

It’s certainly human nature to approach change with apprehension, but Red Hat’s new subscription model does work out well for most customers.  Red Hat’s solutions are poised to take care of your organization as it grows, supporting the future expansion of multi-core processing and virtualization.  There may be an adjustment period, but the only way to gauge the benefits and price adjustments for your organization is to talk with us about your environment and support requirements.

Please do not hesitate to contact me at mgeoffrion@citytechinc.com to discuss your Red Hat and JBoss subscription needs.  I’d be happy to answer any questions, as well as provide a proposal for this year or next.