Red Hat profile: 67% Linux market share, open source is a tough business

Check out Gartner’s January 2016 profile of Red Hat, very comprehensive. The company is still fueled by its market-leading position is Linux:

Red Hat is the clear Linux market leader, with a 67% share, and it has established a strong market presence in application infrastructure… RHEL subscriptions still drive about 75% of Red Hat revenue

I was looking for that market share number when writing up HPE/HPE Software/Micro Focus’s competitive chances with SUSE. They’re still worth a shot, of course, but the giant is clearly RHEL. Plus:

There’s strong customer loyalty, based on the “it works” product strategy3

Account loyalty is achieved through confidence in mission-critical capability, dependable support and belief in continuing leading-edge R&D. SUSE and Oracle are the main Mode 1 competitors, whereas Ubuntu (primarily for cloud and Web scale) and CentOS (a Red-Hat-controlled, community edition of RHEL) are rivals better suited to Mode 2.”

And, on the future threat (for mainstream buyers) of containers:

Red Hat’s concern is the user perception that containers abstract away the OS. Red Hat will amplify the message that RHEL 7 is threaded with Docker to deliver seamless micro services. Red Hat is leveraging its vast knowledge base into an analytics advisory service named Red Hat Access Insights, to aid IT organizations on situational use. The deployment profiles can be registered, and Red Hat will correlate patterns of dysfunction and potential fault conditions with heuristics, create callback alerts proactively by the intelligence of impending fault and crash data. This will be offered as an optional subscription service, which would be a huge OS differentiation as infrastructures move increasingly to Web scale, microservices, Mode 2 processes and large scalable configurations, such as SAP Hana and in-memory platforms.

With respect to open source as a business model, I like to track their finances:

img_0215

They’ve grown a lot of late – $1.3bn by Feb 2013 to $2bn by Feb 2016. Still, as 20+ year old tech company, it’s taken a long time to get there. This establishes two things for me: (1.) it’s really hard to be a pure open source company, and’ (2.) once you do, you’re revenue is going to be pretty low compared to others…for all that effort.

Source: Gartner, 06 January 2016, ID G00293683

One thought on “Red Hat profile: 67% Linux market share, open source is a tough business

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s