Workloads running in the public cloud demand a variety of small, medium and large core counts and memory to meet application needs; in response to this need, cloud providers continue to introduce a wide range of scalable instance sizes. Consumption in the cloud is more dynamic than ever, and Red Hat partners and their customers have expressed a need to have more flexible options to scale up, scale down and streamline the procurement of Red Hat Enterprise Linux (RHEL) to make it more consistent with the customers’ consumption patterns in the cloud. To meet these needs, Red Hat will be introducing more flexible RHEL offerings pricing to cloud partners. This will better align with the value that RHEL delivers to enterprise workloads running in the public cloud.

RHEL’s current pricing model to cloud partners was implemented over a decade ago and is unable to meet the current requirements of customers and partners. At the time, public cloud adoption was just beginning to accelerate and the RHEL cloud partner pricing model was based on a sizing category of the cloud instance the customer initiated. Since the number of cloud instance sizes offered by various cloud providers was relatively small in the early years, Red Hat kept RHEL pricing to cloud partners as straightforward as possible. This resulted in a two-tiered pricing model ("small" and "large").

The range of smaller and larger instances continues to grow rapidly and the two-tiered RHEL pricing model to cloud partners no longer meets the needs of the market. As these cloud offerings have evolved, RHEL has also changed over this same time period. New features and functionality, such as Red Hat InsightsRed Hat Satellite, Gold Images for Red Hat Cloud Access (BYOS), and Podman have been added - without a change in the current cloud partner pricing model. As a consequence, Red Hat is modernizing and rebalancing this outmoded RHEL pricing to cloud partners, which will better meet partner and customer needs in the public cloud.

Red Hat is making this update in order to:

  • Better align with the ever-growing size of public cloud instances, pricing models and buying mechanics, with a more consistent approach.
  • Streamline cloud procurement processes and remove friction as customers grow and scale their cloud footprint.
  • Provide consistent RHEL units of measure and pricing across on-premises and public cloud, for customer transparency.

The new RHEL pricing to cloud partners will scale by vCPU count, which is consistent with the most common model for cloud virtual machines (VMs) and software. In general, we anticipate that the new RHEL pricing to cloud partners will be lower than the current pricing for small VM/instance sizes; at parity for some small and medium VM/instance sizes; and potentially higher than the current pricing for large and very large VM/instance sizes.

This updated RHEL pricing to cloud partners will be effective April 1, 2024 and will apply globally to all cloud service providers in our Red Hat Certified Cloud and Service Provider (CCSP) program, including hyperscalers (AWS, Azure, Google Cloud). A complete list of these partners is available here

About the author

Gunnar Hellekson is vice president and general manager for the Red Hat® Enterprise Linux® business. Before that, he was chief strategist for Red Hat’s U.S. Public Sector group. He is a founder of Open Source for America, one of Federal Computer Week’s Fed 100 for 2010, and was voted one of the FedScoop 50 for industry leadership. Hellekson was a founder of the Military Open Source working group, a member of the SIIA Software Division Board, the Board of Directors for the Public Sector Innovation Group, the Open Technology Fund Advisory Council, New America’s California Civic Innovation Project Advisory Council, and the CivicCommons Board of Advisors.
Prior to Red Hat, Hellekson worked as a developer, systems administrator, and IT director for a number of internet businesses. He has also been a business and IT consultant to not-for-profit organizations in New York City. During that time, he spearheaded the reform of safety regulations for New York State’s electrical utilities through the Jodie Lane Project.

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