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We called Red Hat on Monday to address speculation that its RHX (Red Hat Exchange) program was about to go tits-up. Red Hat responded to the concerns today with a blog post.

Tits-up? Puhlease! - goes the blog post. The Red Hat Exchange is alive and well, only in a modified form. Gone are Red Hat's hopes and dreams of attaching, selling and supporting third-party applications for RHEL from one place. Now we've got a less fully frontal, more muted try and buy type shop.

"The mission of RHX from the start has been to create a rising tide for the broader open source ecosystem," writes RHX director Matt Mattox. "We launched RHX at the May 2007 Summit by offering pre-integrated solution stacks with single-stop web support. RHN powered the delivery of bits. Our goal was to unlock demand in the vast small business market by pricing the solutions competitively and by making installation and support easier. You could even buy RHX solutions online!

"Despite our research and planning, v1.0 of RHX was not the home run we anticipated. It turned out that enterprise customers, not small businesses, were most interested in RHX. In order to serve enterprises properly, we had to change almost every aspect of the offering. By September, we de-emphasized the e-commerce option, introduced high touch sales, 24×7 support, and custom stacks. We also built virtual appliances to make the trial process a little less painful. Within 90 days of these changes, we had a healthy sales pipeline."

Give Mattox credit for admitting to some mistakes. If RHX were a program at Microsoft or Sun, we'd be told how awesomely flawless it was.

Our sources, however, indicate that the healthy sales pipeline is really quite anemic and that the project has been scaled back - big time - to the point where it's just barely hanging on.

RHX has been around for about a year. Red Hat saw it as a vehicle for making the company a broker of business software. Partners such as MySQL, SugarCRM, Hyperic and Alfresco could offer their code on the RHX site with Red Hat picking up support for its own OS and the applications. One hope shared by all the vendors was that this would make life easier on smaller customers trying to get going with open source. Meanwhile, Red Hat could gain more leverage over the Linux server and software market.

But, as we've reported, RHX got off to a rocky start with lackluster interest from "the community" and some licensing blunders.

As we understand it, new Red Hat chief Jim Whitehurst took a look at RHX and wasn't all that impressed. So, the company has moved to reduce costs around the project.

Mattox cops to some of those changes via corporatespeak.

"In January, the company reorganized the business that housed RHX. By February, the engineers that brought RHX to market (developed the website, built the solution stacks, created the virtual appliances, etc.) joined Red Hat’s core engineering team and began working on high priority projects related to virtualization," he writes.

So, the RHX staff was thinned considerably.

Now, we're being told by RHX partners that there's so little to the program that it's basically just a web site with links to software makers. And Red Hat doesn't even promote the web site from its homepage.

"The intent behind RHX was good, but the execution was not," one RHX watcher told us.

Red Hat wanted to make life easier on its partners and customers through a one-size-fits-all approach, but that doesn't work when all of these software companies price their code differently and have different business models.

In order to fix RHX, Red Hat would need to do a better job of pitching itself as a type of neutral House of Linux, and that's a tough sell.

With Mattox relying on arguments such as "when in doubt, remember the power of open source" and "enthusiasm is an asset," we question how long the web site will even survive. ®

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