Red Hat Enters Linux for Mainframe Market
Red Hat enters Linux for mainframe market
Prior to 2004, SUSE dominated the Linux for mainframe market, holding nearly 100 percent market share-primarily because SUSE was first to market with Linux for the mainframe and it had developed good rapport with IBM mainframe customers.
In 2004, Red Hat began paying some attention to Linux for System z servers, recording its first Red Hat Enterprise Linux for Mainframe sale. Red Hat's subscription revenue for Red Hat Enterprise Linux for Mainframe was less than $1 million in 2004. Also in 2004, Novell completed its acquisition of SUSE.
In 2006, Novell still had the Linux for mainframes market pretty much to itself, touting an 85 percent or higher market share. Red Hat was still focusing on the distributed Linux market and not paying much attention to Linux for the mainframe. After all, it was a less than a $20 million-per-year market for Linux subscriptions and the selling cycle was long. Novell also had an advantage over Red Hat because it got its mainframe hardware and software features into releases of SUSE Linux Enterprise Server for System z a few months before they appear in Red Hat Enterprise Linux for Mainframe.
In 2007, Red Hat began to take increased interest in Linux for the mainframe when it realized that there is drag-along revenue associated with each deployed Linux operating system on a mainframe. For every dollar spent for a Linux distribution, customers are spending two or more dollars for layered services, middleware, consulting, etc. In 2008, Red Hat's mainframe Linux market share jumped to 20 percent to 25 percent, with Novell's SUSE Linux Enterprise Server for System z holding 75 percent to 80 percent market share. The competition between Novell and Red Hat for the Linux for mainframe market was underway.
Red Hat has created a Fedora for System z project to help capture market share from Novell, while Novell continues to work closely with IBM customers, developing tools such as the SUSE Linux Enterprise Server Starter System for System z that make it very easy for customers to try out Linux on the mainframe without spending little, if any, money.