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Red Hat's Answer to Novell Market Start

Red Hat Exchange (RHX) was a part of the hoopla surrounding Red Hat's release of its next-generation Linux platform.

The Exchange, which is expected to formally be launched on May 10 at the Red Hat Summit, is an effort to make it easier for end users to get a myriad of third-party vendors' applications directly from Red Hat. It also marks Red Hat's entry into a channel development space that Novell is already in with its Market Start program. Which approach is better all depends on whom you ask.

"They're doing something we've already done and they're doing it slightly differently," Justin Steinman, Novell's director of product marketing for Linux, told internetnews.com about RHX. "I'd actually submit they are doing it in a channel unfriendly way."

The Novell Market Start program introduces independent software vendors (ISVs) to Novell's network of channel resellers and solution providers. There is no cost for vendors to join and the only thing that Novell asks is that the ISVs certify their solutions on Novell SUSE Linux.

According to Steinman, Novell benefits because it gets more solutions on SUSE Linux. The ISVs win because they get access to Novell's channel. And the channel wins because it gets more products to sell.

"What Red Hat is doing is they are cutting the reseller and the solution provider out of the equation," Steinman said. "They are asking the end customer to come directly to Red Hat Exchange, which to me leaves the solution provider out of the equation."

Though Novell is obviously not enamored with Red Hat's entry in the third-party solution space, some of Novell's Market Start participants are somewhat more enthusiastic.

Tony Barbagallo, vice president of product management and marketing at open source systems monitoring vendor GroundWork, explained that his firm was one of the first to join the Novell Market Start program.

"We got introduced to a couple of channel partners that we've since forged relationships with, so the program has given us visibility," Barbagallo told internetnews.com. "But that program is drastically different than Red Hat's Exchange."

The key differentiator between Novell's Market Start and Red Hat Exchange (RHX), according to Barbagallo, is that RHX is an online marketplace.

"To us it looks like Red Hat is a channel partner; we are going to get listed in their exchange and customers can then just come and by product from there," Barbagallo said.

GroundWork also has a partnership with open source stack vendor SpikeSource, which Barbagallo noted he does find value in. SpikeSource, also part of Novell's Market Start program, does not look upon RHX negatively, either.

"We applaud Red Hat for taking the leadership to help drive open source applications and middleware to the market," Paul Salazar, director of corporate marketing at Spikesource, told internetnews.com. "Furthermore, we believe that RHX will be complementary to SpikeSource's efforts to bring business-ready open source solutions to market."

Still RHX is doing something that neither Novell nor Spikesource has done, at least according to GroundWork's Barbagallo.

"Looking at Red Hat and Red Hat Exchange and having that whole e-commerce thing is just something that would take us as a small company an enormous amount of effort to build out on our own," Barbagallo said.

There is also an expected payoff for GroundWork from the RHX effort. Barbagallo explained that, with RHX, it's basically no different than GroundWork's reseller program.

"If you sign up as a VAR you get training and margin points off of list price and then you resell the product," Barbagallo said. "We're looking at RHX as a key channel opportunity for us and that absolutely comes with an understood revenue share."

Open source collaboration vendor Zimbra is another company that is set to be part of RHX. John Robb, vice president of marketing and product management at Zimbra, told internetnews.com that one of the advantages of being an open source company is that it is easier to find channel partners to help you get to market.

"We don't need to have our own direct sales force in every part of the world; we need our partners whether it is a local systems integrator or big players like Red Hat," Robb said. "We need them to help spread the news and make it easier for people to find and learn about Zimbra."

Robb said the RHX model gives Zimbra efficiency by providing the ability to procure the solution from Red Hat directly.

In the end whether Red Hat's Exchange is more or less friendly than Novell's Market Start is not something that has an obvious answer.

"Novell's model is a different channel-friendly model, whereas Red Hat is putting them on an online exchange," Novell's Steinman argued. "It's kind of an interesting question for the marketplace to see which model will succeed."