In my experience as both a candidate and a hiring manager, certificates are only valuable for getting past a headhunter or HR person to the tech manager who can really assess your skills.
Certifications have changed over the years. I got a CNE in 1993 and maintained it up until about 2001. (As far as I know, it's still valid.) In fact, I wrote a simple script to emulate df for Netware that ran on their implementation of Perl, back in the day. And, I got a CompTIA Linux+ in 2003. So far, neither have proved universally valuable. My CNE got me interviews a couple of times and occasionally draws interest from a recruiter looking to fill a government job. The Linux+ gives me something to laugh about with other system administrators.
Both get me past low-level search people and passed on to someone with more technical savvy and experience.
But, the age of certifications guaranteeing a certain salary or a certain bonus are long gone.
Novell now requires some hands-on via simulators in their tests and they have some Linux certifications now, too. As others have mentioned, Cisco has better certification tests now, too, requiring a fair amount of hands-on knowledge. No idea what Microsoft is requiring these days. And, of course, you already point out the highlights of the RHCE.
All of them, even the ones with simulations, have cram-tests that include the simulators or something close.
But, no matter how good a certification is, nothing beats real-world experience and solving actual problems.
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