Red Hat In The Black

Winning the race by Anonymous Coward · 2001-06-19 21:57 · Score: 1

This, of course, means that they are WAY ahead of every other internet startup. Not that I use Redhat, but I'd root for them at least until Slackware goes IPO (not bloody likely)

Re:Red Hat remains in red: Posts $27.6M net loss by Anonymous Coward · 2001-06-19 22:29 · Score: 1

Copyright (C) 2001 The Canadian Press (CP), All rights reserved

Yup, and look at how well you followed that.

Bull by Anonymous Coward · 2001-06-19 22:36 · Score: 1

Read the numbers--they had an operating loss of $3.8M and interest income of $4.4M, which is how they got a profit of $600K. Compared to the same quarter last year, their revenue was up about $4M, and their costs declined by about $2M. That's definitely movement in the right direction, as opposed to the bizarre numbers coming out of Caldera.

RH is still bleeding, just at a slightly lower rate than last year. When they post a true operating profit it will be time to celebrate.

Re:Says more about RedHat than Linux by Anonymous Coward · 2001-06-19 22:39 · Score: 1

Sometimes linux is a POS, all right. 8-)

It's not thanks to me... by Anonymous Coward · 2001-06-20 00:34 · Score: 1

So far I have burned and installed no fewer than FIFTEEN Red Hat systems, many of them at work. This was from downloading the ISO images and burning them. I didn't pay a penny.

I can't decide if I should feel guilty or not. On the one hand, I'm getting all sorts of people interested in Linux, but on the other hand it's not helping Red Hat pay one cent of wages or rent.

On the third hand, they're really just mostly packaging the work of a cast of thousands, but on the fourth hand doing that on that scale costs real money.

Help! What do I do?

Please Buy at least one CD by Anonymous Coward · 2001-06-20 00:37 · Score: 1

Help them! Buy at least one CD, and then make your copies. It is like public radio here in the US. You can listen for free, but it is nice to support them by becoming a member.

Re:Difference between "adjusted" and "reported"? by Anonymous Coward · 2001-06-19 22:09 · Score: 2

The reported net loss includes one time expenses such as purchases of companies. Thus you can't say they're worse off.

congradulations? by Anonymous Coward · 2001-06-19 22:15 · Score: 2

try congraTulations.....

Re:Red Hat remains in red: Posts $27.6M net loss by Anonymous Coward · 2001-06-19 22:56 · Score: 2

How can you know so much about finance, yet so little about the damned english language?

Red Hat remains in red: Posts $27.6M net loss by Anonymous Coward · 2001-06-19 22:04 · Score: 4

Red Hat remains in red: Linux software maker posts $27.6M quarterly net loss

RESEARCH TRIANGLE PARK, N.C., Jun 19, 2001 (The Canadian Press via COMTEX) -- Linux software packager Red Hat Inc. said Tuesday it broke even on an operating basis in the quarter ended May 31, meeting Wall Street estimates.

Red Hat reported adjusted net income of $600,000 US, or break even per share, in the first three months of its financial year. That compared with an adjusted net loss of $3.7 million, or two cents per share, a year earlier.

Before adjustments, the net loss was $27.6 million, or 16 cents a share, compared with a net loss of $17.4 million, or 11 cents a share, in the first quarter of the previous year.

Red Hat reported revenue of $25.6 million, down five per cent from the previous quarter but up 18 per cent from the year-earlier period.

Red Hat, which has yet to report a profit since it went public, markets a CD-ROM version of the open-source Linux operating system and provides customers with technical support.

The online source for news sports entertainment finance and business news in Canada

Copyright (C) 2001 The Canadian Press (CP), All rights reserved

Re:Red Hat remains in red: Posts $27.6M net loss by dewke · 2001-06-19 23:58 · Score: 1

Why does it matter whether its a true profit or not? The fact is that Red Hat is actually suceeding is a good thing IMO. With the death of so many dotcom companies one tech company that is not going out of business should be somthing that any reader of slashdot would be happy about, linux user or not.

dewke

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Oderint dum metuant
Re:Red Hat remains in red: Posts $27.6M net loss by ProfDumb · 2001-06-19 22:32 · Score: 5

Red Hat remains in red: Posts $27.6M net loss

If you go look at the actual figures, you will see that most of that loss is "depreciated goodwill" -- when Red Hat acquires a company they put "goodwill" on their books as an asset and then depreciate it according to very arbitrary accounting rules. In reality, Red Hat did not buy depreciating physical assets, but rather the skills and reputations, which are not depreciating.

On the other hand, the loss also contains several million in stock options, which really are an expense to the company. The "cash flow" number in headline ignores stock options. Therefore, Red Hat really is losing money, but nothing like $27 million.
Re:Red Hat remains in red: Posts $27.6M net loss by selectspec · 2001-06-19 23:21 · Score: 2

magic?

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Someone you trust is one of us.
Re:Red Hat remains in red: Posts $27.6M net loss by selectspec · 2001-06-19 22:26 · Score: 5

Red hat is in the black actually. They had a posative cash flow this year. In otherwords more cash came in than went out. The net loss is attributable to the ammortization of aquistions from prior years. Ammoritzations are not attributable to cash flows only to balance sheets and income statements. When one asks whether a company is in the red or the black, it is implicit that they are refering to cash flows and/or the operating budget (which like cash flows doesn't include ammortizations).

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Someone you trust is one of us.
Re:Red Hat remains in red: Posts $27.6M net loss by duplicate-nickname · 2001-06-19 23:05 · Score: 1

You are correct, there is no way RedHat is earning a profit, but they probably aren't losing $27 million either. One must consider both the GAAP and Pro Forma earnings....and with only $600k in pro forma earnings, it is safe to say RHAT is still in the red.
BTW, one would be a fool to make investing decisions solely on pro forma earnings reports!

ÕÕ

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Re:Red Hat remains in red: Posts $27.6M net loss by dughat · 2001-06-19 23:51 · Score: 1

Stock options don't actually cost the company money, as I understand it. If I'm an employee, and I'm given a stock option at $10, and exercise and sell it at $100, the company is supposed to report a $90 loss. But did they really lose $90? They really lost 1 share of stock that I exercised. Could they have sold that share? Not really, not without a secondary offering or lots of paperwork or something. Which they could still do anyway, with another share of stock (since they can just make more if they want, sometimes pending approval of the shareholders). It really only resulted in a dilution of the outstanding stock.
Re:Red Hat remains in red: Posts $27.6M net loss by milo_Gwalthny · 2001-06-20 00:58 · Score: 2

Actually, the problem is that they do not post *any* loss on their reported income statement. (They do have some tax loss, but unless you're the IRS, you do not get to see the tax books.) And, although doing a secondary is a pain in the ass, the amount raised is usually more than 90% of the market value. You are correct that stock options do not cost the company money, rather they cost the shareholders money.
As an aside, I have an investor friend who no longer looks at reported profit, he only looks at taxes paid and then grosses up to income. He thinks it is easier to fool the auditors than to fool the IRS.

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Milo
Re:Red Hat remains in red: Posts $27.6M net loss by TGK · 2001-06-19 23:06 · Score: 5

Goodwill dosn't quite work like that but ok. Say company X buys company Y for $5.0x10^9. Now, if we sit down and count all of company Y's assets and they come up to be, say, $3.6x10^9 the remainder is something called "goodwill." These are intangable assets. Things like, perhaps, market share, location, reputation. In short, things that no company can go out and buy, and thus do not have a dollar value of their own. Now the thing is, goodwill, must, under GAAP (Generaly Accecpted Accounting Principles) be ammortized off over a period not to exceed 40 years. Because it's always nice to have assets sticking around most companies use 40 years as their ammortization period.

So yes, ammortization of old expenses, especialy those having to do with the depreciation of goodwill is going to play a huge roll in this.

When we say a company is "in the red" or "in the black" the meaning differs depending on the period we are talking about. If we're refering to a year in general, the statement usualy refers to the income statement and or the statement of cash flows. The key portion of this is to ballance Revenue against COGS (cost of good sold). For Red Hat, COGS will include R&D work and will thus be very high. Revenue from goods sold will of course be close to zero due to the nature of open source. This leaves Red Hat makign it's money from Tech support and subscription servies as was so aptly pointed out above. Here's the other key, R&D expenses can be ammortized as well by a sufficiently creative accountant. Afterall, if this R&D is going to benefit the company over the next 10 years, then the expensce of that research can be spread out over those 10 years.

What this amounts to is this. We rather need a good solid stock holders report from RHAT to pour over until we can get some answers. Never trust what a company claims to the media, trust what it is required by law to report to the IRS. (And not even that in some cases)

This has been another useless post from....

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No trees were killed in the creation of this post. However, many electrons were inconvenienced.
Re:Red Hat remains in red: Posts $27.6M net loss by dhamsaic · 2001-06-20 06:30 · Score: 2

Example:
Last year, I had $1,000. I spent $500 of it and made returns of $300, meaning that at the beginning of this year, I have $800, and that last year, I had negative cash flow. With my $800, I spend $100 and earn $150, meaning I have positive cash flow, but only $950, or less than what I had last year.
I'm guessing this is what happened to Red Hat.

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Every once in a while I like to masturbate a new word into my vocabulary, even if I don't know what it means.
Re:Red Hat remains in red: Posts $27.6M net loss by dhamsaic · 2001-06-20 06:32 · Score: 2

adjust that to "I spend $100 and earn $250" OR "but only $850" to make it correct. I originally meant to have it say "I spend $100 and earn $250" but I made a typo.

Slow down cowboy!

Slashdot requires you to wait 2 minutes between each submission of /comments.pl in order to allow everyone to have a fair chance to post.

It's been 1 minute since your last submission!

Ugh.

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Every once in a while I like to masturbate a new word into my vocabulary, even if I don't know what it means.
Re:Red Hat remains in red: Posts $27.6M net loss by Tech187 · 2001-06-19 23:42 · Score: 1

Needless to say that announcements like this serve to smoke out the ignorant. Doubtless there are clueful people out there waiting for the jubilant fools to sink their cash into RHAT, based on these hype figures.

"So ya think Red Hat is over the hurdle? Here, buy some more shares from me."

Woohoo! by Wakko+Warner · 2001-06-19 21:56 · Score: 5

Now maybe we'll get Direct Deposit again! I'm tired of trying to cash these "stock options" things in at the foodstamp redemption center...

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Re:Cygnus Solutions by rodgerd · 2001-06-20 05:38 · Score: 2

Of course, using your IPO wealth to ensure profitability by purchasing companies that (a) make money and (b) are a good fit is a sign of good management. As opposed to some companies who spent their IPO wealth on collections of crack monkies.

Re:Buy? by rodgerd · 2001-06-20 05:47 · Score: 2

You could try this one which provides some interesting material. One thing about professional advice: it's been shown time and time again that professional fund managers, advisors, brokers and the like are collectively underperformers. You can almost always get better returns off index linked funds, or, for that matter, monkys with a dartboard.

Re:Difference between "adjusted" and "reported"? by Have+Blue · 2001-06-19 23:56 · Score: 1

That book rules.

If so the consultants should certify in other OSes by emil · 2001-06-19 22:58 · Score: 2

Assuming that they don't have any retention problems, they should keep a small core of people who are certified in Solaris, HP-UX, AIX, and/or Tru64 ostensibly for "integration issues."

I also hope that they have Oracle and DB2 people on staff now, especially since DB2 certification is free until September (and DB2 has put the first Linux score on the TPC site).

But then again, if they have lousy managers of the type that drove away Raster, then don't even bother with this.

There was a point where I'd disagree... by emil · 2001-06-20 01:57 · Score: 2

...and argue that a large percentage of technically-minded people are "wackjobs."

However, as I age and my career becomes more solid, I see less and less "wackjobs," and I tend to act like less of one myself (boy do I have a long way to go!).

Still, a great manager can handle a "wackjob."

Re:Buy? by Don+Negro · 2001-06-20 02:18 · Score: 3

Watch carefully. In real dollar terms it can't go much lower, but this close to zero even a small downtick can wipe out a lot of equity.

If your intent is to buy Redhat, buy it after it has begun to trend up, and after it has a down day. And decide beforehand exactly how much you are willing to lose and place a stop order for that amount at the time of purchase. If you are right and Redhat continues up, move your stop order up along with it, to protect your investment. It's too low to the ground to not to be super cautious.

And for the love of God, please don't interpret this as investment advice. It's not investment advice, it's merely a suggestion of things to think about and study before you make any investment decisions.

Don Negro

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Don Negro
Perl 6 will give you the big knob. -- Larry Wall

Re:hopefully this will help the stock price by ptomblin · 2001-06-19 22:56 · Score: 2

Hah! I sold my RedHat stock at $125. Unfortunately I used the profit to buy Corel stock, so that proved I was just lucky with RedHat.

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Cygnus Solutions by Per+Abrahamsen · 2001-06-19 23:40 · Score: 5

I wonder how much come from the "old" Red Hat, and how much come from the always profitable Cygnus Solutions. Buying profitable companies is one way to become profitable.

Of the wins listed, about half would be typical Cygnus Solutions contracts (GNUPro), and half would be typical Red Hat contracts (Linux). A few could be either or neither, maybe made possible by the merger.

Says more about RedHat than Linux by Jon+Peterson · 2001-06-19 21:59 · Score: 2

Can't help thinking that RH is really benefitting from their system integration and consultancy skills. If they did the same stuff for Solaris and other nixes, they'd probably be making alot more money!

Still, things like this have to be good news for Linux:

"Contract signed with BP Oil for support renewal for POS rollout to 2,500 petrol stations across Europe. "

Assuming that the POS systems actually _are_ Linux....

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Re:Says more about RedHat than Linux by jmauro · 2001-06-19 22:36 · Score: 2

It could always be eCos that they picked up from cygnus.
Re:Says more about RedHat than Linux by connorbd · 2001-06-20 00:21 · Score: 2

Consultancy is exactly what they're trying to do. If they can continue to turn a profit, they will be the first to validate the predictions about viable open source business plans: give away razors, give away razor blades, sell styptic pencils :-)

/Brian

Re:Difference between "adjusted" and "reported"? by tzanger · 2001-06-20 01:42 · Score: 2

Fear: When you see B8 00 4C CD 21 and know what it means

The other guy who responded isn't old enough to know. :-) AX=0x4c00 is the old MS-DOS handler for program termination. AH=0x4c is the code and AL=0x00 is the return value. int 21h is the MS-DOS command vector.

It took me a couple minutes (gee that looks familliar!) but I did finally remember. Thanks for the trip down memory lane. :-)

SEC investigating Pro Forma reporting... by sheldon · 2001-06-21 01:38 · Score: 2

Nobody will probably see this, but:

http://news.cnet.com/news/0-1007-200-6333426.htm l? tag=mn_hd

Cnet is saying the SEC is going to start investigating the type of reporting that RedHat just did. i.e. basically claiming they made a profit by ignoring the dollars spent out on mergers, etc.

Vapor by NoWhereMan · 2001-06-20 03:01 · Score: 1

Looks like all those warnings have proven true. They obviously have cut back like the rest of the Linux vendors. Looks like they can only afford an email account now ;-)

Re:This is an adequate response to the M$ FUD by johnnyb · 2001-06-19 23:27 · Score: 2

Of course, I am one who believes that making money should be difficult. i.e. - we should have to _work_ for a living. So the fact that money didn't just flow in a pipeline to free software companies actually encouraged me, because it showed that free software companies actually have to continually provide increasing value to their customers, instead of just forcing them to pay money.

It's obvious when money just flows out of someone's ears without hard work that something is amiss.

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Engineering and the Ultimate

Re:Not to piss on this circle-jerk... by elam · 2001-06-20 01:59 · Score: 1

Well...realizing that it would be SILLY to compare RHATs current reported earnings w/ those of MSFT...the earliest thing I could find on MSFT is their prospectus from 1986 when they were preparing for IPO.
Peace.
~ELH~

Slightly wrong... by larien · 2001-06-19 22:03 · Score: 5

They reported a net profit, which is different from a positive cash flow. A company can have a positive cash flow (eg, just after a rights issue) but still be making a loss and it can have a negative cash flow (eg, large capital purchases which don't fully affect profit in the year of purchase) and still make a profit.

A full look at the finances would reveal if they do have a positive cash flow, but the two don't go hand-in-hand.
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Cygnus by Ed+Avis · 2001-06-19 22:30 · Score: 3

Did you notice how many of the deals they trumpeted in the press release are actually from the Cygnus side of the business? I wonder whether the Linux half of things is profitable.

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-- Ed Avis ed@membled.com

Re:My floor is cold... by mandolin · 2001-06-20 07:41 · Score: 2

are they just supercooling their red hat boxen down there?

They don't run linux in hell. They run DOS 4. (plus a little AIX for their e-business solutions)

buck

Off-topic: Your sig by ghjm · 2001-06-20 01:39 · Score: 1

Uhhh... Load a register (presumably AX) with 004C and call int 21? But I don't remember what function 4C does...would looking it up be cheating? I assume that the 00 is necessary, otherwise you'd just have loaded AL. What takes a single one-byte parameter? Hmm...Program terminate with result code? Is that it?

-Graham

Re:RedHat, GPL, and Gates by Delphis · 2001-06-20 01:09 · Score: 1

All this means is that there is a subtle bug in his logic.

A subtle bug in Bill Gates' logic? .. Well, that's just DOS and Windows all through isn't it?

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Delphis

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Delphis

Re:Not to piss on this circle-jerk... by Fyndo · 2001-06-19 23:20 · Score: 1

Huge, I'm sure. But then they're a much older and established company. The relevant comparison might be to MS at this stage in it's development....

Re:Time.... by woggo · 2001-06-19 23:34 · Score: 3

Imagine someone at a computer security firm telling the boss that he/she wants to become a "Black Hat" user.

Well, the OpenBSD zealots would have you believe that the reaction wouldn't be any worse than if someone at a security firm told her boss that she wanted to be a "Red Hat" user. *rimshot*

(Disclaimer: I use and like Red Hat)

Re:"comunists" making money ? by Zico · 2001-06-20 12:37 · Score: 1

The revenue that RedHat's getting is coming mainly through service contracts, not from people buying their shrinkwrap boxes. If you're a big business who wants to go the Linux route, are you going to trust a company that in all honesty is still losing money? What happens to your support if they go tits up? Nah, you're gonna trust someone like Big Blue. It's not about anybody being revolutionary, it's about stability.

Cheers,

Re:"comunists" making money ? by Zico · 2001-06-20 01:06 · Score: 3

Yo! How 'bout waiting until RedHat turns a real profit before spewing that nonsense? See, RedHat actually spent a lot more money than it took in for the past quarter. About two more years worth of "success" like this quarter, and the company's going to be taking a dirt nap.

Sorry, but RedHat's announcement hasn't seemed to have fooled anybody but some people around here desperate for any good news about Linux. That's why W.R. Hambrecht today downgraded RedHat's and a reason why the stock is down from where it closed yesterday. The revenue for the quarter was 7% less than what RedHat told Wall Street to expect, revenue is 5% down from last quarter, revenue from their network consulting services are already dropping, and they're now refusing to give analysts any guidance for RHAT performance in future quarters. Maybe they've run out of book-keeping tricks? :) "None of the other companies I cover have refused to give guidance," Prakesh Patel, analyst with WR Hambrecht and Co. "It definitely is troubling. Regardless of the economic environment, the company has a sales pipeline and should have estimates of closing deals that's the job of management."

And that doesn't even address the big gun aimed right at them that goes by the name IBM. If IBM ever decides to sell their own Linux distribution, it's bye-bye RedHat.

Cheers,

Nice to see a startup... by maroberts · 2001-06-20 05:23 · Score: 1

..that at least appears close to making money. Almost everyone else in the technology market seems to have caught a cold, and in some cases it appears to be pneumonia.

Even if this profit is as a result of buying Cygnus, then at least the Linux side of the business is not a total black hole.

Ah well, $600K down, only $2.3bn to go till they catch up to Micrososfts quarterly figures

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Karma: Chameleon

POS Terminals? by weston · 2001-06-19 23:15 · Score: 2

I think I've had to work with a few of these.
Why is Red Hat trying to make something like
THIS? POS terminals are frustration, and nothing
but peices of .... of.... something.... wait
a sec, it'll come to me....

i

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Tweet, tweet.

Re:It was easy... by CokeBear · 2001-06-20 01:34 · Score: 2

Not when you're selling them for less than they cost you.

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Reality has a liberal bias

All things aside . . . by Badgerman · 2001-06-19 22:56 · Score: 3

Forget the M$/Linux thing, forget the fact that 600K doesnt seem significant compared to other companies, forget the dot-com hype and fall.

A company using OS as its base has managed to make a profit in a few years and survive. That may not legitimate the business model, but it gives us some hope that it is legitimate or can be legitimate.

And that, all things aside, is pretty damn neat and inspiring. So congrats to the Red Hat people.

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"The Sage treasures Unity and measures all things by it" - Lao Tzu

Re:Difference between "adjusted" and "reported"? by King+Babar · 2001-06-20 12:49 · Score: 2

Yup. That's exactly what I figured. Effectively RH borrows against future earnings to fund purchases today (borrowing meaning issuing shares, options, real loans etc.).

No, as other posters have pointed out, that's not it. So, for example, yes, they bought Cygnus with stock, and, yes, that act did dilute the stock, but the dilution was essentially immediate as soon as the shares go out. What you're seeing now is something very different.

If you buy a company, that company has a "book value" that is supposed to be a dollar figure that represents what the company would be worth if we stopped it from being a going concern and just sold everything in sight. For some kinds of companies, this could be a lot: they might hold lots of real estate, or be a closed end mutual fund, or have a lot of cash hanging around (Think Apple or Microsoft here)... For something like Cygnus, it could get down to "gee, so how much could we get for that used workstation over there and the change underneath the coke machine?" :-) Obviously, Cygnus is "worth" more than the random bits of tangible stuff you might find lying around at the work place, but a lot of that value depends on the so-called "good will" of the firm (the brand name, the likelihood that Cygnus programmers will continue to write good code, basically everything that's valuable about Cygnus). Clearly, this kind of intangible value is a bit squishier and harder to evaluate than the cost of the espresso machine. Now, on the one hand, the value of an asset is assumed to be what you paid for it, but on the other hand, the "hard" value might be a lot less, and the difference between the two might, in the worst case, be very large. In any case, you have to write it off (if you follow GAAP) over time. Obviously, if something like Cygnus really does have value, it will contribute to your revenue in an obvious way down the line and in a form that you can easily value: money. On the other hand, if one dotcom buys another for a billion in stock and the second dotcom only does $400K in revenue before every trace of it is gone, then the "goodwill" portion of the purchase price is huge, the loss is obvious, and the system again works just fine.

What RedHat did this quarter was make money on what they were really doing (selling software while paying people to write/market/distribute the software) while having to write down some more goodwill from previous acquistions. But no cash left the firm because of the loss, nor will any cash ever do so.

Which takes me back to my original point - if a company is going forward in cash flow, but significantly backward in book value (ie the "reported" value in the press release) then it's like borrowing a whole stack of money then saying you are better off because you have more in your wallet than you used to.

Not really. The money is already spent. The only way you can go forward in cash flow is to...wait for it...get proportionately more money than you spend. I mean, suppose you buy a MacDonald's franchise for (making up a number) $5 million. It wouldn't surprise me if the book value of one restaurant is something horrible like $1 million (i.e., the value of the land and the building and a few other trinkets). But the restaurant should reliably crank out $500K in profit per year. Now, if you were accounting for this transaction (let's keep it all cash for simplicity), then you'd start with $5 million, fork that over for the franchise, and say (originally) that your asset is worth $5 million. But much of that is good will. So let's say you write down $1 million of that goodwill every year for the first five years, while making your expected $500K per year. On paper, your cash flow is +$500K per year, but you'd be losing $500K per year due to the write-down of the goodwill. But after 5 years...you get the picture. (And, yes, this is drastically simplified.)

So, if I were an analyst looking at RedHat, I'd be much more interested in what I thought their revenue growth would be (it was pretty darn good given the dotcom meltdown), how aggressively they were controlling expenses (pretty aggressively, apparently), and whether I thought their previous company buys made sense (nobody wants to buy a company that pisses away stock and cash on useless things). As far as I can tell, RedHat ain't in bad shape at all by these standards, although they arguably overpaid for some of those acquisitions at the height of the bubble. Oh well, that does suck, and is accounted for, but doesn't change their cash flow any or their future prospects (unless management habitually makes poor investments).

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Babar

great news by Misha · 2001-06-19 21:56 · Score: 2

Free round of install images on me!

it's a nice bonus for the AWESOME job they did on RH7.1

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I was thinking of how to intentionally fail my drug test... It would make a good memoir story someday.

Re:great news by veristal · 2001-06-20 03:12 · Score: 1

I have been using linux since 94, I started with slackware. I recently, in the past two years, started using Redhat. Why would I do such an evil thing as switch to a "lamer" version of linux. Have you ever considered that when managing large numbers of servers (50+) that taking the time to run make on all of them is just not cost effective? RPM has been a huge time saver for software updates that would have required hours of tedious work before. Redhat does a good job of making a fast, stable operating system for the corperate world
Re:great news by jeffc128ca · 2001-06-20 07:07 · Score: 1

Yes, fine logic there. It's popular, i must not like it. real brains at work there.

I use redhat because I too have a lot of computers to manage and I like the RPM thing. All the other distributions are fine products. Just as effective as redhat. But the logic that the popular distribution must be bad is very immature and moronic.

Re:...I thought open source was bad for business?? by MrAl · 2001-06-19 22:18 · Score: 1

Consider this: How many open source companies are making money? How many closed source companies are making money? Perhaps open source isn't a bad business model, but it's appears to be a pretty sucky one if so few can make money off it.

Re:...I thought open source was bad for business?? by MrAl · 2001-06-20 01:50 · Score: 2

Ummm... Microsoft had a totally different market (and an extremely small one) when they started. RedHat has a semi-matured market and a large one at that. It's useless to try and compare the two in parallel.

Re:Not to piss on this circle-jerk... by mihalis · 2001-06-20 00:54 · Score: 2

what do Microsoft's financials look like this quarter?

In this quarter, their stock is up but starting from their lowest level in three years (e.g. ~48 dollars on Jan 3rd 2001) the previous quarter. They are expected to miss their profit forecasts (which were already down).

It was easy... by powerlord · 2001-06-19 23:46 · Score: 2

They actually had a viable buisness model :)

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Re:It was easy... by powerlord · 2001-06-21 02:31 · Score: 2

Not when you forget to include things like S&H and other overhead in your cost, and then insist that your building brand name (which is much less meaningful on-line), and that what you lack in margin by selling below cost, you'll make up with in volume.

Lots of companies had some bad buisness ideas.

What RedHat is doing is essentially selling a non-managed service. They have put together a CD of Linux related stuff. Integrated it together, and, for a price, will ship you a copy. Their costs stem from integration, documentation, and package/production fees, but there is a tremendous amount of value that they (and other Distros) provide in terms of integration. This is what they charge you for (and what a fair number of us will pay varying amounts for).

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This space for rent. All reasonable inquiries will be entertained at proprietors discretion.
Re:It was easy... by nomadic · 2001-06-20 00:37 · Score: 2

Selling things isn't a viable business model?
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Database Software / Service by Patrick+Lewis · 2001-06-19 23:36 · Score: 1

I saw this article outlining a database venture that Red Hat will be introducing. Does anyone have any details to this? I am curious if they will be developing something from scratch or using an existing product (the article tends to lean toward "from scratch", but it isn't really clear).

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"If I am such a genius, how come that I am drunk and lost in the desert with a bullet in my ass?" --Otto (Malcom ITM)

Buy? by macdaddy · 2001-06-19 23:21 · Score: 2

So would people recommend buying RH stock now?

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Re:Buy? by macdaddy · 2001-06-20 03:06 · Score: 2

That's good to know. I've been thinking about sinking a few $k in the stock market. I need to find a good HOWTO on the subject because I don't really know squat about investing. Maybe I should seek some professional help before I loose too much.

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yeah.... by Juln · 2001-06-20 10:18 · Score: 1

after some of the fucked experiences installing redhat 6.1 I dubbed them 'Microsoft with a fucking hat on', myself.

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Juln

Yea but... by brianvan · 2001-06-19 22:56 · Score: 2

when will LinuxOne show a profit? :)

Re:Difference between "adjusted" and "reported"? by throx · 2001-06-20 01:52 · Score: 2

What it is commonly called is doctoring the figures.

Amortized money directly affects cashflow when they actually paid the money. If they've only just taken it off the books then that means their previous year's figures are out.

Goodwill and intangibles affect future cashflow because sooner or later someone is going to cash in on them.

Stock options are effectively a loan to the employees in leiu of pay, so again that doesn't affect cash flow but is a debt that will be called in at some stage.

One time expenses are still expenses and directly affect cash flow. The interesting thing about one time expenses is that there always seem to be more of them each year, just for different things.

What this really smacks of is someone taking out a cash loan and then claiming that they made a profit because they have more cash now than they did before they took the loan.

Overall, I'd still be very wary of Red Hat until they can report a profit on non-adjusted numbers.

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Fear: When you see B8 00 4C CD 21 and know what it means

Re:Difference between "adjusted" and "reported"? by throx · 2001-06-20 02:06 · Score: 2

So let me get this straight.

They pay $30m for a company worth $2m, don't include the $28m loss and everyone is ok with that?

I still don't get how paying $28m doesn't affect cash flow - where did the cash come from to pay for that? Even if they issued more stock, then that is effectively a net outflow of cash.

I know I'm not an accountant, but as an engineer this sounds highly suspicious.

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Fear: When you see B8 00 4C CD 21 and know what it means

What do I care if RHAT makes a profit? by throx · 2001-06-20 03:07 · Score: 2

I'm vaguely pro-Microsoft, in the sense that I'm not exclusively Linux or Mac. I just use the system that works best for me at the time.

I don't care if Red Hat makes a profit - in fact I sincerely hope they do because I hate seeing businesses fail and people's dreams go up in Chapter 11 smoke.

In the case of Red Hat, I'll believe it when I see it. I'm still dubious as to their business model and long term viability. I can see how commercial software and vendor lock-in will generate a profit. I'm having problems with simply providing support for a GPL'd system though.

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Fear: When you see B8 00 4C CD 21 and know what it means

Re:Difference between "adjusted" and "reported"? by throx · 2001-06-20 04:36 · Score: 2

Yup. That's exactly what I figured. Effectively RH borrows against future earnings to fund purchases today (borrowing meaning issuing shares, options, real loans etc.).

Which takes me back to my original point - if a company is going forward in cash flow, but significantly backward in book value (ie the "reported" value in the press release) then it's like borrowing a whole stack of money then saying you are better off because you have more in your wallet than you used to.

Most financial advisors I know seem to take a dim view of people that keep taking more and more loans and hence decreasing their net worth despite an outward show of affluence. This seems to be exactly what RH is doing and is exactly why I'm more than a little worried.

Remember 3dfx seemed to be having a big turnaround with it's Voodoo 5500/6000 cards until they all of a sudden went under...

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Fear: When you see B8 00 4C CD 21 and know what it means

Re:Difference between "adjusted" and "reported"? by throx · 2001-06-20 12:33 · Score: 2

Ok, makes sense to some degree as far as cash flow goes. Still sounds like incurring a debt (to the shareholders) and calling it a profit when you have more cash in the hand.

The thing that really does bother me is leaving out the issuing of stock options, which is a *real* debt because they can be called in at any time and the company must buy them at the price they issued at.

Of course, if RHAT's stock continues on the slightly negative trend then this isn't a problem. If it starts to pick up on the other hand then I can see a lot of options serving to hammer the stock straight back down again as they incur significant negative cashflow.

In the end, I simply don't believe a company that says they are making a profit when their net worth is significantly below what is was a year ago. Even if the core business is making a little money, the acquisitions, options and other "abnormals" much be taken into account and you have to ask whether they were worth the price incurred.

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Fear: When you see B8 00 4C CD 21 and know what it means

Re:Difference between "adjusted" and "reported"? by throx · 2001-06-20 23:39 · Score: 2

It's not really the good will that bothers me (and thanks for the good illustrations - they helped a lot). What bothers me is the fact that other things have been left out:

Stock options should never be left out. These are in a very real sense loans to the employees and can make up a big component of a company's outgoing wages - especially for someone like RHAT. Detailing exactly how much these options were would be useful to an analyst.

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Fear: When you see B8 00 4C CD 21 and know what it means

Re:Difference between "adjusted" and "reported"? by throx · 2001-06-19 22:53 · Score: 3

It can't be written off because it is, in fact, money that they don't have any more. As pointed out by other in this thread though, it does NOT include stock options which are a going to be a major hit to that income figure.

Realistically, Red Hat isn't in the black and still won't be for some time. Don't go spending your hard earned cash on RHAT just yet...

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Fear: When you see B8 00 4C CD 21 and know what it means

Difference between "adjusted" and "reported"? by throx · 2001-06-19 21:59 · Score: 5

With the SEC investigating the occurance of Tech companies not reporting employee stock options as part of the company's liabilities, how much faith can we put in this statement when you look at the full quote:

"Adjusted" net income of $600,000 (up from a loss of $3.7m last year).
"Reported" net loss of $27.6m (from a loss of $17.4m last year).

If I'm correct, doesn't this mean that at the end of the day they are actually worse off than they were last year and just putting PR spin on the figure?

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Fear: When you see B8 00 4C CD 21 and know what it means

Re:Difference between "adjusted" and "reported"? by Ungrounded+Lightning · 2001-06-20 09:39 · Score: 2

So let me get this straight.

They pay $30m for a company worth $2m, don't include the $28m loss and everyone is ok with that?

No.

They pay $30m for a company that is worth $30m. But $2m of that is desks and chairs and computers and office supplies, and $28m is that it's Cygnus Support, a money-making (or potentially money-making) company, which is worth a lot more than the desks and chairs in its office.

Now they didn't really "pay" anything but printing-press stock (which dilutes the stock in their shareholders hands, so it's not really nothing). But the combined pie got bigger, so it's appropriate that each piece of stock is a smaller part of the bigger pie.

But they paid more stock for it than if they'd gone to the market and somehow sold stock at the Red Had market price (without driving that into the ground) and bought the stock of Cygnus Support (without blasting that into the stratosphere). So the difference is treated as an expense over the next several years. That means the part of the company profits that support the valuation of the stock only gets taxed once (when the former Cygnus Support shareholders sell their Red Had stock), not twice (also when Red Hat makes the money in the first place).

If what you're interested in is whether the basic business of Red Hat + Cygnus is actually making a profit, ignoring the financial noise from the stock-certificate printing press, you need to look at the "adjusted" numbers, not the "reported" ones.

--
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Re:Difference between "adjusted" and "reported"? by stevey · 2001-06-20 14:58 · Score: 1

Fear: When you see B8 00 4C CD 21 and know what it means

That is indeed scary .. I used to just use, either, "CD 20", or "C3" mostly.

Thanks for making my day with that sig.. the only time I see stuff like this anymore is when I'm patching binaries .. ;)

Steve
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Re:Difference between "adjusted" and "reported"? by Boiled+Frog · 2001-06-20 02:22 · Score: 1

It's like buying a house. Usually, you don't pay cash for the house. You get a mortgage and amortize the cost of the house over many years.

This is a similar (but not exactly the same) idea.
Re:Difference between "adjusted" and "reported"? by KenSeymour · 2001-06-20 01:11 · Score: 1

Sooner or later, RedHat will be making a profit un-ambiguously.

When that happens, a lot of people will be disappointed.
Some of them are Pro-Microsoft people.
Some of them are folks in the Linux communitity who hate to see someone else succeed in business or hate to see
a Linux distribution other than their favourite succeed.

They will succeed with or without YOUR faith.
Don't worry, you'll get over it.

--
"We can't solve problems by using the same kind of thinking we used when we created them." -- Albert Einstein
Re:Difference between "adjusted" and "reported"? by LordNimon · 2001-06-19 23:34 · Score: 1

In many companies, unvested options can still be purchased by employees. The difference is that if the employee quits, the company has the right (and often does) to buy back the unvested options.
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Lord Nimon

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And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
Re:Difference between "adjusted" and "reported"? by T.Hobbes · 2001-06-20 00:46 · Score: 1

But to spent 30 million on a company costs 30m.. either they took 30m out of the bank or took on debt, they lost money somewhere. They're accounting for that now. It's real money.

Linus has,in fact,grown,and explosively-JonKatz
Re:Difference between "adjusted" and "reported"? by Proud+Geek · 2001-06-20 00:13 · Score: 1

Isn't the amortized part money they haven't had for some time, and are writing off now for tax purposes? They are writing off goodwill and intangibles, which have book value because of what they paid, but that doesn't affect cash flow at all. There was also about 7 million dollars in other one time expenses; it's probably more useful to go over them and the revenue figures to see how closely doctored they are. Probably more informative is that they didn't give any guidance whatsoever. I really don't know what that means.

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Even Slashdot wants to hide some things
Re:Difference between "adjusted" and "reported"? by Greenisus · 2001-06-19 23:21 · Score: 1

I don't really know much about Wall Street, but I read Microserfs . Don't the options have to sit for a while to vest? Since it's uncashed money, wouldn't they still be in the positive?
Re:Difference between "adjusted" and "reported"? by GuyFromAccounting · 2001-06-19 22:16 · Score: 1

Just because a cost is a one time expense doesn't mean it is irrelevant.
Re:Difference between "adjusted" and "reported"? by GuyFromAccounting · 2001-06-19 22:12 · Score: 2

You are right but, the problem is not that options aren't part of the liabilites, its that the cost of these options are excluded in the calculation of net income. In fact follwing the table link you see that These results "Exclude amortization of goodwill and intangibles, stock based compensation, and merger and acquisition costs"
Re:Difference between "adjusted" and "reported"? by GuyFromAccounting · 2001-06-20 00:09 · Score: 2

This is true. But they way that the accounting rules work is that they recognize a portion of the cost of these options over the time that they vest. That is if the options are worth $10 each when they are issued but only vest over 5 years then $2 is recognized as a cost each year. Its a little strange that Red Hat recognizes stock compensation costs at all. Most firms do not. And the account rules let you avoid recognizing the costs as long as you are carful about how you structure the options.
Re:Difference between "adjusted" and "reported"? by A+Commentor · 2001-06-19 23:21 · Score: 5

Purchases of companies have to be 'accounted for'. Since I don't know what RH paid for Cygnus, and I don't want to look it up, lets assume $30 Million. Also let's assume that the accounting 'books' for Cygnus says that their net worth is $2 Million.
So now they just paid $30 Million (could be in stock or cash), yet they can only add $2 in net worth to their books. In order to balance the books they must right off the $28 Million difference.
They can do it all at once, or spread it out over many quarters(i.e. get a tax benefit from it). They call this good will write-off. Even though RHat believes the company is worth $30 Million to buy, the difference between this purchase price and the accuired company's net worth have to be written off.
It doesn't impact the cash flow, which is critical. For cash flow they were generated postive $1.5 M, i.e. they now have $1.5 M more in the bank...

--
Looking for any old 8-bit Heathkit/Zenith software/hardware - http://heathkit.garlanger.com

Re:Time.... by weave · 2001-06-20 00:50 · Score: 2

Well, if you listen to Gates, since Linux is mostly GPL, "Red" Hat fits (think communism).

Re:What does B8 00 4C CD 21 mean? by dr+bacardi · 2001-06-19 23:45 · Score: 1

Great.

Now every time I see that sig, I will be afraid.

Thanks _very_ much.

Re:So when do we start hating RedHat? by I_redwolf · 2001-06-20 05:04 · Score: 1

You just don't get it; the simple premise is that RedHat CAN'T "turn into an evil corp". They'd be smacking the hand that feeds them if they do. It just wouldn't make sense. You think debian,slackware,blahblah is going to go outta business because of Redhat? What's RedHat going to do? Fire all of its premier opensource coders so they have a crappy distro? And in 15 yrs RedHat is not going to be the only viable option for Linux because there are just too many distros. You can probably find a distro for just about anything. Don't like any of them grab a kernel, grab some utils and start building your own system from scratch. There are plenty of howto's on this stuff. RedHat has just made history no matter how tiny the profit is.

Re:Impossible by QuoteMstr · 2001-06-20 01:22 · Score: 1

Reminds of the Star Trek episode "I, Mudd" (or was it the other Mudd one?) where Kirk tricks an android society into letting them go by using a self-contradicting statement, like "This statement is false."

Re:Congratulations all around by tak+amalak · 2001-06-19 23:54 · Score: 1

I think he meant they spelled 'Congratulations' wrong.

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Don't lead me into temptation... I can find it myself.

Boring quibble by Chalst · 2001-06-19 23:15 · Score: 3

The announcement is that Red Hat are showing a profit for the first time: they certainly will have shown positive cashflow already (ie. cash going into their money accounts minus cash going out) when they were floated.

Hmmm... by mjh · 2001-06-19 22:01 · Score: 1

...wonder if the stock will rise. At the time of this post, it was down $.19.
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Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.

Impending Name Change by volpe · 2001-06-19 22:08 · Score: 1

Now that they are no longer "in the red", so to speak, I wonder if they will change their name to "BlackHat", and become a security consulting firm.

Re:Impending Name Change by zerOnIne · 2001-06-20 00:15 · Score: 1

Now that they are no longer "in the red", so to speak, I wonder if they will change their name to "BlackHat", and become a security consulting firm.
i think you're looking for the l0pht.. i mean, @stake :)
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09

You mean diff. between reported and pro-forma? by Ungrounded+Lightning · 2001-06-20 09:21 · Score: 2

Just because a cost is a one time expense doesn't mean it is irrelevant.

Yes. But I think we're talking about the difference between "pro-forma" and "reported" here.

Pro-forma excludes several things, in order to get a measure of how the underlying business is actually doing.

Some of them are actual one-time costs that you're concerned about. But the main components are "amortized good-will" from merger accounting and "deferred compensation" from stock options. Now IANAnAccountant, but if I understand them correctly, those last two are taking advantage of provisions in the tax law to avoid the shareholders being double-taxed on a couple things.

Here's my understanding of this - which may be flawed, so you HAVE been warned.

Amortized good-will avoids double-taxing the shareholders of the acquired company (typically people who got their stock near the founding when it was almost free, then busted their butts and risked their houses during the startup period) for the appreciation of their stock from the acquisition.

When a merger is accounted as an acquisition, extra stock in the "surviving" company is printed to replace the retired stock of the "acquired" company. What really happens is the two pies are merged and everybody gets a proportional piece of the bigger pie. But it's accounted as if the company that printed the stock actually sold it, then spent the money to buy the other company's stock. The amount they paid will be at a premium over what the other company was worth on the open market. So the difference is treated as if the acquired company had an asset called "good will" which makes up the difference. Uncle lets the acquiring company act as if they "spent the money" to "buy the good-will", and then treat like any other capital expense and "amortize" it - deducting the cost in little chunks over a number of years. (Uncle eventually gets his cut - but only ONCE - when the former holders of the stock in the "absorbed" company finally sell it. Their stock price went up by the premium paid - the value of the good-will asset - as a result of the merger.)

"Deferred compensation" is similar, but relates to stock options. What actually happens is that the company offered the employees some stock when it was cheap. The employees don't actually get the shares into their hands and have the right to sell it until it's "vested" - once they've been around for a while. (And of course they might not actually bother to exercise the option - especially if the stock goes down.) When they sell it they'll be taxed on the difference between what they paid for it and what it sold for.

But it's accounted roughly as if the company sold the stock on the open market at the exercise price, then had to buy it back at the higher price to give to the employee once it's vested. So the company gets to write off the difference against profits on ITS taxes. If you think of it the way it's accounted that's what happened - the company had an expense and deducted it. But if you think of it as the company selling the stock to the employee at the lower price, the company got credited for the taxes the option-holder paid (in return for not making the money from the stock's price change for itself).

Pro-forma accounting treats the stock as being sold at the exercise price (what you and I would think of as having happened), but the reported income treats it as if the company paid the employee the difference. The latter is another valid way of looking at it: The company was trying to pay the guy extra by letting him assume some of the risk in return for sharing the rewards, and if it had actually paid cash instead it could have deducted THAT and everybody would have been in the same tax situation. But if you're evaluating the health of the company's business you want to look at things the pro-forma way, not the reported income way.

--
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way

Re:hopefully this will help the stock price by jmccay · 2001-06-20 00:03 · Score: 1

Stocks only mean stuff to people who own them. The company can only do so much with the money they get from stocks--mainly buy other companies. It is very possible to have a great company making tons of money but the stock value can still suck.

--
At the next eco-hypocrisy-meeting, count the private jets used to get to the meeting. Should be interesting to see that

/. is being overrun by jhoffoss · 2001-06-20 01:15 · Score: 2

...by accounting geeks! Run for the hills! Hide the children, before they get amortized and written off!
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Linux: The world's best text-adventure game.

Re:/. is being overrun by decefett · 2001-06-20 09:11 · Score: 1

OMG, thats the funniest post I've read on this thread.
Where's a mod point when you need one?

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Australian? Join EFA

Funny But According To Microsoft... by EXTomar · 2001-06-19 23:46 · Score: 3

...(the previous posted topic)companies that want to make a profit are supposed to stay the hell away from GPL code. Go figure.

Slackware... by SaDan · 2001-06-20 04:45 · Score: 1

Well, now that they've been tossed out by Wind River (those bastards), from what I've heard they ARE in the process of forming their own company. Read about it on the Slackware forums if you're interested... http://www.slackware.com Now, wheter or not they'll got IPO, that's another story. ;-)

Re:...I thought open source was bad for business?? by anothy · 2001-06-19 22:04 · Score: 1

...linux can be profitable, if not as a product than for customer support

uh, just to be clear, arn't you basically saying RH is making money off selling software that needs their support? gee, M$ has already proved that's a succesfull business strategy!

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i speak for myself and those who like what i say.

Time.... by bish · 2001-06-19 21:55 · Score: 5

to change the Company Name?

And you were doing so well.

Re:Time.... by |<amikaze · 2001-06-20 07:32 · Score: 1

At one point, I recall the Chinese Gov't deciding to use RedHat for all their operations, and many many people found it funny....
Re:Time.... by Kierthos · 2001-06-19 22:31 · Score: 1

Ahh, but if the name change does happen, we'll need an application called "Mirrorshades".

Kierthos

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Mr. Hu is not a ninja.
Re:Time.... by s20451 · 2001-06-19 22:19 · Score: 2

change the Company Name?

... to "Black Hat"? Imagine someone at a computer security firm telling the boss that he/she wants to become a "Black Hat" user.

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Toronto-area transit rider? Rate your ride.

You're fooling yourself. by dave-fu · 2001-06-20 09:23 · Score: 1

> They can't hide devious little "big brother" bits of code in their OS because we get the code with the OS.

You've got the source code; have you personally audited it from top to bottom, and verified that there are no back doors? Even if you have, have you also made your own compiler to rebuild everything?
If you've ever heard the phrase "security by obscurity", don't pretend that openness is a magic bullet; just because you and a herd of others bury your head in the sand doesn't mean that back doors aren't already in there.
For what it's worth, MS releases code to large clients; if there were glaring holes in there, well. I'd say they'd be released to the public, but I wouldn't doubt they'd pull NDAs to cover their asses a la Sun...

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Easy does it!
This comment has been submitted already, 276865 hours , 59 minutes ago. No need to try again.

Re:You're fooling yourself. by ocbwilg · 2001-06-20 11:42 · Score: 3

You've got the source code; have you personally audited it from top to bottom, and verified that there are no back doors? Even if you have, have you also made your own compiler to rebuild everything?

No, I haven't. I have neither the time nor the inclination. Remember me? The guy who's still stuck using the shitty and insecure MS products at work?

But the point is that I could if I wanted to. And there are people out there that do comb the code looking for bugs and backdoors. They can do this because all of the Linux code is out in the open where we can get at it if we want to. If every person who used a computer had to audit the source code for their OS and apps before using it, we'd still all be using typewriters. But this isn't about paranoia, it's about control. Linux isn't better because I can see if there are backdoors (though it is an added bonus). Linux is better because we all own it and can do (almost) whatever we want with it so long as we keep it in the community.

If you've ever heard the phrase "security by obscurity", don't pretend that openness is a magic bullet;

Closed source products are by very definition "security through obscurity." All that means is that the bugs and backdoors are there, clever people can still find them without the source code, but you aren't allowed to fix them yourself if you so choose. Now how is that security at all?

Of course openness isn't a magic bullet, but it is the first step. Vigilance is more likely the magic bullet. Just like having an open government (like we have in the US via FOIA and public elections) isn't protection against abuses of power. We must still make use of that openness. We must be on the lookout for abuses, and we need to point them out and correct them when we can. The GPL allows this with its code. MS does not. With Microsoft you have a closed government, meeting in smoky back-rooms and making deals behind closed doors. With MS you have a government that is not open to public scrutinization by the populace from which it derives its power. That is the true difference between closed and open source (of any kind).

For what it's worth, MS releases code to large clients; if there were glaring holes in there, well. I'd say they'd be released to the public,

Yes it does, for what it's worth (not much). If you are a big enough company and you can convince MS that you have a legitimate need for the source code for parts of the OS you can license it from them, for a fee, under NDA and without the right to make any changes. Now how is that open? Only the largest companies ever get to see the code, and they can't use it for anything except to optimize their own programs. Even if there were backdoors or seriously critical bugs in the code they can't talk about them.

It's been said before, many times, many ways: Microsoft's "code sharing" with major OEMs/vendors has absolutely none of the benefits of open source. It is pure marketing.

Yeah. I remember you. by dave-fu · 2001-06-20 21:14 · Score: 1

The guy who's depending on other people to find his holes for him. And since you haven't built your own compiler, there may not be any visible holes; they could be built into your compiler. Lovely thought, ain't it?
MS is as an all-powerful government... well. You don't like a politician, you say it with your vote. (in the case of presidential elections, this alone may or may not be enough)
You don't like a company, you say it wth your wallet. I hear this Linux is fantastic, so less jawing about how bad things are, more footwork getting things to work the way they should.

--
Easy does it!
This comment has been submitted already, 276865 hours , 59 minutes ago. No need to try again.

Not to piss on this circle-jerk... by dave-fu · 2001-06-19 23:01 · Score: 2

...but as long as we're pooh-poohing M$ (how clever!) and rooting for GPL and Linux and whatever... what do Microsoft's financials look like this quarter? Not that facts should mean anything around here.

--
Easy does it!
This comment has been submitted already, 276865 hours , 59 minutes ago. No need to try again.

Re:Not to piss on this circle-jerk... by warpsmith · 2001-06-20 01:23 · Score: 1

Microsoft recently reported quarterly revenues of $6.46B, with net income of $2.62B (report).
Microsoft has cash on hand (cash and short-term investments) of $26.9B (report).
Re:Not to piss on this circle-jerk... by ocbwilg · 2001-06-19 23:45 · Score: 5

...but as long as we're pooh-poohing M$ (how clever!) and rooting for GPL and Linux and whatever... what do Microsoft's financials look like this quarter? Not that facts should mean anything around here.

Don't be ridiculous. You're actually suggesting that that we compare numbers from a smallish, niche-market company that has been in business for 5 years with those of a vicious, multinational, multi-billion dollar, anticompetitive monopolist that has been in business for 20 years? I've never heard such lunacy.

If you think that this is about money then you are very sadly mistaken. It is about ideology. It is about the fact that you don't have to be an extortionist or a monopolist or a tyrant in order to be a successful company. It is a testament to the power of open source that such a small (dare I say nearly insignificant) company can actually survive to operational profitability while competing against a company the size of Microsoft.

Do you remember what has happened to the rest of Microsoft's competitors over the past 20 years? They've been either acquired by The Beast, run out of business by The Beast, or beaten so badly into submission by The Beast that they've had to seek government protection. The only real exceptions to this are companies who were already multinational multibillion dollar companies before they began competing with Microsoft. RedHat (and open source in general) hasn't had any of those things happen to them. This is a great day for open source. Free speech for everyone!
Re:Not to piss on this circle-jerk... by haruharaharu · 2001-06-19 23:37 · Score: 1

When microsoft was the age of Redhat, weren't they a pissant little corp that wrote compilers? Hmm, Compare their respective oferings in the OS department - Dos 1.0 vs. RedHat 7.1

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Reboot macht Frei.

They did not earn a profit! by duplicate-nickname · 2001-06-19 23:01 · Score: 1

According their GAAP earnings report (generally accepted accounting priciples) RedHat lost $27 million. Their Pro forma showed a profit of only $600k which does not include the $20 million RHAT took in depreciation (non-cash expenses). There are no accounting rules for the pro forma earnings, so most investers look at the gaap AND pro forma to determine if a company is profitable.

With RHAT only showing $600k in pro forma profits, I think its safe to say that they are NOT in the black.

ÕÕ

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ÕÕ

Re:Impossible by isaac_akira · 2001-06-20 02:00 · Score: 2

Bill Gates himself said that it isn't possible for commercial companies to use GPL code.

Well, they ARE only making $600,000 compared to M$'s billions, and Gates does have a point: closed source software makes MORE money. From a software developer's standpoint this is a pretty strong agruement.

But then I think some of the best open source products come from people who are not doing it for the money anyway. It's either a labor of love or something that helps them get their "real" job done easier.

Re:hopefully this will help the stock price by fataugie · 2001-06-19 23:54 · Score: 1

It's about Freakin Time there has been some good news about earnings. I dumped $3900.00 in at $73, sold at $119, took the profits and bought dsl.net at $ 19, sold at $29 and dumped the whole load into Andover.net. As we all know, Andover was taken over by VA Linux and now I can't even buy a gas grill at the current prices.

Boo Hoo.

Remember, it's Only Money....(spend all you want, we'll make more).

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WTF? Over?

Re:Offtopic by Electrum · 2001-06-20 08:23 · Score: 1

You're right, because on x86 values are stored backwards internally.

Faster than... by swordgeek · 2001-06-19 22:40 · Score: 3

Not bad--they beat Amazon!

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"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban

Re:Believe the hype by VultureMN · 2001-06-19 23:06 · Score: 1

AAAUUUUIIIIGGGHHH!

No penguin entrails for me today.

Re:What does B8 00 4C CD 21 mean? by VultureMN · 2001-06-19 23:27 · Score: 1

B8 00 4C = load AX register with 004C (hex)
CD 21 = Int 21h = DOS service vector
The DOS service is specified in AH, which in this case is 4C, which is return with error code. (Program Termination). The return status is AL, which in this case is 00. So the return status the program that is terminating is 0, it probably means success.

The upshot is, successful death! DIE DIE DIE! OK.

Re:So when do we start hating RedHat? by bad-badtz-maru · 2001-06-20 09:09 · Score: 1

Every time I have to tarball Sendmail on a debian box because the debianized version is ancient, I feel like Debian has "gone out of business". It's not like sendmail is the only package that is at least a major version behind. I typically have to tarball Postgresql as well, since the Debian package is 6.5 (which is crap) and 7.x runs very well. Sure, the package maintainers backport security patches, but they don't backport general bugfixes. I remember when a recent proftpd security fix for the glibc globbing bug came out. The package maintainer didn't bother with a new package and a non-maintainer upload was used for the updated package. The binary distributed with the package was compiled incorrectly which essentially rendered the software nonoperable. It took a week or two before the regular package maintainer corrected the issue.
In short, Debian is a great distribution if you don't mind tarballing the major stuff.

Re:So when do we start hating RedHat? by bad-badtz-maru · 2001-06-20 09:12 · Score: 1

Crap! I certainly did not intend to post at +1, what kind of dumbass would design it so you have to explicitly turn off +1 posting each time you post?

Re:So when do we start hating RedHat? by bad-badtz-maru · 2001-06-20 20:42 · Score: 1

"Troll"? I administer scores of Debian boxes every day at work and Debian is my distribution of choice. Are the statements I made in that message untrue?

Re:"comunists" making money ? by bad-badtz-maru · 2001-06-20 08:55 · Score: 2

I am sure "the real geeks" don't account for any noteworthy percentage of red hat's revenue.

How can you have a reported net LOSS and a Profit? by lordmage · 2001-06-19 22:35 · Score: 1

"The company reported an adjusted net income of $600,000, or break even per share, for the first quarter of fiscal 2002, compared to an adjusted net loss of $3.7 million, or $0.02 per share, for the first quarter of fiscal 2001. On a reported basis, the net loss was $27.6 million, or $0.16 per share, compared with a net loss of $17.4 million, or $0.11 per share in the first quarter of fiscal 2001"

Will someone explain how you can lost money and still be profitable. I dont get it? What is "Reported basis" any Accountant?

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I can program myself out of a Hello World Contest!!

�: Buying goodwill by yerricde · 2001-06-20 06:04 · Score: 2

These are intangable assets. Things like, perhaps, market share, location, reputation. In short, things that no company can go out and buy, and thus do not have a dollar value of their own.

Intangible assets? Yes. But why aren't they included in the value of the trademarks purchased along with the company? Aren't market share and reputation the very things a trademark is supposed to represent?

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Will I retire or break 10K?

congrats to redhat and linux by small_dick · 2001-06-19 23:12 · Score: 2

this is really good news.

i only wish so many programmers weren't losing their jobs right now ... the 'dot crash' has certainly taken its toll.

redhat 7.1 is the best release i've seen ... 2.4 kernel, xfree 4.0, etc.

Treatment, not tyranny. End the drug war and free our American POWs.

--

Treatment, not tyranny. End the drug war and free our American POWs.
See my user info for links.

Re:Congratulations all around by Mr.Phil · 2001-06-19 22:55 · Score: 1

RHAT is the stock ticker symbol for Red Hat... so that isn't spelled wrong.

However, pretty much everything else on the front page is. :)

Re:Good on 'em! by Mr.Phil · 2001-06-19 22:57 · Score: 1

autorpm kinda fits that bill

Re:Offtopic by SLi · 2001-06-19 23:20 · Score: 1

mov ax,4c00 you mean, I'm sure?
Or if that's 32 bit code, it's mov eax,21cd4c00.
Or then my skills at disassembling in head have rusted :)

Congrats to Red Hat by FiNnZ · 2001-06-19 23:20 · Score: 1

I dont care about stock downgrades and upgrades, but I do care that Red Hat can sustain itself and continue to give me an alternative to the Microsoft OS, especially with the coming of XP (boooooo). Microsoft, be afraid, be very afraid. Just because they give it away doesn't mean that they can't put you on the shelf.

Profiability? by Paracelcus · 2001-06-20 00:29 · Score: 1

One slightly black quarter does not a windfall make, 0.95 cheers for RedHat! Let us spray that it keeps growing.

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I killed da wabbit -Elmer Fudd

Re:"comunists" making money ? by Jester998 · 2001-06-20 07:48 · Score: 1

"If IBM ever decides to sell their own Linux distribution, it's bye-bye RedHat." How exactly do you figure? Sure, maybe IBM will have more marketing to attract the newbies, but true geeks (who are, basically, the only ones using Linux at this point anyways) will continue to use their distro of choice (RHAT, Slack, whatever). I can't really see IBM blowing Red Hat out of the water *unless* they do something REALLY revolutionary that would make it worth switching.

Good on 'em! by RedOregon · 2001-06-19 22:08 · Score: 1

Great for RedHat. Now either make .RPMs track dependencies or point me at a site that shows how to integrate apt-get into RH and we'll check out 7.1.....

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Skivvy Niner? Email me!
HEY! Look left just ONE MORE TIME!

Re:Good on 'em! by deaddrunk · 2001-06-20 00:57 · Score: 1

RPMDrake in Mandrake 8.0 will allow you to get selected packages from a site and will automatically resolve any dependencies.

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Does a Christian soccer team even need a goalkeeper?

Nice Job!! by S810 · 2001-06-20 00:19 · Score: 1

Wether or not they should show a profit or not is not up to me. I do know that Red Hat Inc. is a public company and the point of going IPO is to show a profit for yourselves and your investors. I say Props to RHAT! Keep in mind that this is distribution of Linux and they do provide the source code in the distro. GPL Law is not something I am very familiar with, but I do know how corporations work and they are doing great!

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"I think you know what I'm talkin' about, Mr. President; We're gonna kill us a mummy!" - Bruce Campbell as Elvis Presley

And here's a comforting thought... by taliver · 2001-06-19 22:06 · Score: 1

Red Hat is providing support for Lucent deployment of applications using GNUPro tool suite on many embedded platforms used extensively throughout Lucent's Wide Area Network Switching Products.

That they would mention Lucent as the second bullet in their list of achievements... scary.

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I demand a million helicopters and a DOLLAR!

This is an adequate response to the M$ FUD by uriyan · 2001-06-19 23:12 · Score: 1

M$ FUD generally makes a bad reading, since it persumes the listener to be a total idiot. However it did use to have one valid point: the economic factor.

Open-source projects earn money with much difficulty and in indirect ways. This was an issue which has concerned me much, because money is necessary for existence in any reasonable society.

The recent news about RedHat making profit uplifted that concern from my heart. RedHat is built around free software. It is apparent that if RedHat can make profit, others can too.

To sum up, eat your wallet, M$!

Re:This is an adequate response to the M$ FUD by RazzleDazzle · 2001-06-19 23:47 · Score: 2

Free software and open source projects shouldn't be aimed at making money... it is a nice side benefit of making good software for everyone.
RedHat and every other GNU/Linux distro and probably every other company developing software of this type understands this; money is NOT the issue as M$ always claims it to be. boo-hoo we can't make huge profits from open-source/free software therefore it is evil and makes for a terrible business model.
Forgive me father for I have sinned...I installed windows 98

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ZERO ZERO ONE ZERO ONE ZERO ONE ONE! Just brushing up for my next big invention: Ethernet over Voice (EoV)

Excellent by pizen · 2001-06-19 21:59 · Score: 1

Time to buy stock. Time for a turn-around in the US economy (especially Tech stocks). Or is this just another sign of the apocalypse?
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RedHat, GPL, and Gates by Alien54 · 2001-06-19 22:16 · Score: 2

This event (Redhat in the Black) contrasts well with the recent statement of Gates, as noted in the previous Slash story:

The GPL, he continued, "breaks that cycle--that is, it makes it impossible for a commercial company to use any of that work or build on any of that work."

This, taken to the logical end, would make the success of Redhat impossible. All this means is that there is a subtle bug in his logic.

which is somehow appropriate.

It is my view that the MS proprietary accomplishes the exact thing that Gates accuses the GPL of. It makes it impossible for a commercial company to use any of that work or build on any of that work, except with the permission of Microsoft.

Redhat obviously does not have this as an issue, as they are continuing to grow nicely.

Congratulations, Redhat!

Check out the Vinny the Vampire comic strip

--
"It is a greater offense to steal men's labor, than their clothes"

oh please... by hyperstation · 2001-06-20 02:49 · Score: 1

1. all i hear is "red hat sucks", "fuck dead rat", etc, etc....whoa, but they turn a profit and everyone is all "awww i knew they could do it!" and "viva la red hat!". what a load of bullshit.

2. personally, i think that red hat had better keep up whatever voodoo magic they've been doing so the next several years come out "positive" for them too ($600,000 in net income is hardly going to topple microsoft). so far red hat is basically the *only* free software company to go anywhere. is it a fluke? yeah, i sorta think so. i don't think free software is a very viable market to get into. oh well, prove me wrong.

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Relax by WildBeast · 2001-06-19 23:56 · Score: 1

It's only 600k on sales of 25 millions. Usually that's the amount of money small companies make. To be honest it's a laughable amount. Good software companies are expected to make much more sales.

Re:How can you have a reported net LOSS and a Prof by bwalling · 2001-06-19 23:03 · Score: 1

Because when the accouting people get together with the public relations people, they start making shit up. However, there is a standard, accepted practice for coming up with bullshit figures, so they really haven't done anything 'wrong'.

If you ask me, it's all a load of crap. They work the numbers like hell until they like them. I've seen the actual numbers, and I've seen what my employer reports - interesting, to say the least.

Re:What does B8 00 4C CD 21 mean? by achurch · 2001-06-20 08:02 · Score: 2

Minor correction... B8 00 4C = MOV AX,4C00h (load 4C00 hex into register AX--remember that the x86 is little-endian).

And the scary thing is, I knew what those bytes meant without having to read the answer...

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BACKNEXTFINISHCANCEL

Re:RedHat Profit by milo_Gwalthny · 2001-06-20 01:10 · Score: 2

The press release always comes out a few weeks before the 10Q. The Q has to be filed within 45 days of the end of the quarter (unless an extension is granted.) Their quarter ends on May 31, so the Q probably won't be available until July.

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Milo

Hold the Press..... by bitva · 2001-06-19 23:02 · Score: 2

....I though anyone using the GPL couldn't make money as it's not practical for business.
At least that's what my friend from Redmond said.

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I am currently not obliged to divulge that information as it might compromise the agents in the field

Good Job Red Hat! by VivianC · 2001-06-19 22:00 · Score: 1

You guys have now showed that a free operating system can turn a profit.

Next you need to show that it can SUSTAIN a profit.

Keep up the good work and keep making those nay-sayers eat their words!

Viv
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Viv

Gmail invites for ip

Impossible by 91degrees · 2001-06-19 21:57 · Score: 5

Red Hat can't make a profit. That would make them a commercial company. Bill Gates himself said that it isn't possible for commercial companies to use GPL code. I think those Red Hat GPL hippies really ought to start reading Slashdot before making such ludicrous claims about profitability.

hopefully this will help the stock price by wmulvihillDxR · 2001-06-19 21:58 · Score: 1

I've seen their stocks steadily decline from $6 to about $4.61 today. Congrats again to the RedHat peeps.

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Check out Althea for a stable IMAP email client for X. Now with SSL!

Re:Congratulations all around by Rudeboy777 · 2001-06-20 02:43 · Score: 1

"Congradulations to everyone at RHAT!"

Congratulations on your new Spell Checker, spelling on here seems to be reaching rediculous proportions.

Great, this whole story is probably the result of some reporter misinterpreting "loosing money" to mean "free-spending".

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From hell's heart I fstab at /dev/hdc

So when do we start hating RedHat? by nick_davison · 2001-06-20 03:10 · Score: 1

Just checking, now they're making a profit, when do we all officially start hating RedHat? I do so hate to get left behind on these things.

You're actually suggesting that that we compare numbers from a smallish, niche-market company that has been in business for 5 years with those of a vicious, multinational, multi-billion dollar, anticompetitive monopolist that has been in business for 20 years?
So, about 15 more years then? Remember Microsoft was the cool, quirky, little company in a niche market (Home OSs) that stood up to the big imperialist (making Windows on their own, not for IBM).

Do you remember what has happened to the rest of Microsoft's competitors over the past 20 years? They've been either acquired by The Beast, run out of business by The Beast, or beaten so badly into submission by The Beast that they've had to seek government protection. The only real exceptions to this are companies who were already multinational multibillion dollar companies before they began competing with Microsoft.
How many Linux distributors have gone out of business over the last year? How many more will do over the next 15 years (see above) as RedHat becomes the profitable option for investors and the standard one as paranoid executives are only able to feel safe with "the one that makes a profit and will be around to support us"?

As for RedHat not forcing competitors out the way MS did, how long were all the other DOS flavours around for?

A large part of what Microsoft's done, whether we like it or not, is basically act like a large successful business. In a market place where home users and unimaginative senior management want 'the only option', competitors are going to fall by the way. That's negative in the long term but ultimately the product of consumer behaviour. Even in a group like slashdot, how many of you are running a non-MS office suite as your primary suite? At a guess, most of us run MS Office, complain about it endlessly, but still use it.

Yes, RedHat's not doing anything particularly dark and evil (in the way we see MS) yet. How long before natural selection starts to take over, we start installing RedHat because we know it's the most profitable and gets the most investment? How long before, as a profitable company, the shareholders force in a management team that isn't quite so libertarian and starts to figure out ways to corner the market rather than innovate?

I dislike Microsoft's monopoly as much as most people. I just get the impression it's not so much Microsoft being evil as playing well in a system that's set up to ultimately go in a way we don't like. Look at the TelCo industry and the behaviour of the baby Bell monopoly - it's not just IT. At the moment, we like RedHat as they're the little innocent guys but will we continue to see them that way when they become the big innocent guys, then the big maybe not so innocent guys, etc.? Is the problem really in the companies or the system they exist in?

Remember Bill Gates runs a huge charitable foundation that's apparently funded minority scholarships for the next 20 years. View it negatively and, sure, it's a ploy. View it positively though and he's actually trying to do some good with the result of his huge corp. OK, so no one believes that. And what'll happen in ten years if RedHat becomes the only real Linux option? Will we still see their adherance to open source as positive or will it be "Look at the way Red Hat managed to corrupt open source in to a monopoly!"?

So, congratulations to Red Hat for turning a profit. You're currently the little guys and we love you. Just don't make the mistake of continuing to be too successful or we'll have to start seeing the negatives and all learn to hate you.

Re:So when do we start hating RedHat? by ocbwilg · 2001-06-20 08:02 · Score: 2

So, about 15 more years then? Remember Microsoft was the cool, quirky, little company in a niche market (Home OSs) that stood up to the big imperialist (making Windows on their own, not for IBM).

Maybe 15 more years. Maybe never. It's really hard to tell. I will dispute what you've said above though. MS wasn't about making a "Home OS" and standing up to the big imperialist. Microsoft was abut money from the beginning, pure and simple. The originial MS boys were very shrewd players of the game. They intentionally hitched their wagon to the biggest, strongest horse they could find (IBM) so that when it took off it would take them with it. They weren't fighting IBM. They were working with them. It wasn't until around 1990 that they actually started "fighting," and by then it was too late.

The big difference between MS and RedHat, however, is that RedHat's product is GPL'd and open source. They can't hide devious little "big brother" bits of code in their OS because we get the code with the OS. If RedHat gets too big and MS-like for the open source community, then we can take the RedHat source and modify it in ways that provide new functionality without breaking compatibility with "the chosen standard." If RedHat becomes that big (which I doubt), it will be by selling services, not products. The products will probably always be freely available to us.

Other than that minor quibble, I really liked your post. I hereby volunteer to sacrifice a couple of my mod points from it to you.

(And yes, I do use primarily MS Office at work, but only because that's what I'm given and that's what everybody else at my site uses. I wish it weren't true, but that's one decision that I don't get to make for the company.)

Congratulations all around by ackthpt · 2001-06-19 22:22 · Score: 2

With the bleak rumors about VA running amok it's good to see that there is a market and money to be made. When the tech recession subsides Red Hat will be a major contender. I hope other ditribs are up and about to keep them honest.

Congradulations to everyone at RHAT!"

Congratulations on your new Spell Checker, spelling on here seems to be reaching rediculous proportions.

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All your .sig are belong to us!

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A feeling of having made the same mistake before: Deja Foobar

Re:Wow.. by Darth+RadaR · 2001-06-19 22:17 · Score: 1

Time to go put Redhat boxes in front of Windows boxes at CompUSA. :)

Good to see someone else doing that. I try to do my part by going to the book stores and putting Linux manuals & magazines in front of the MS magazines. :)

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/*drunk.. fix later*/

Re:What does B8 00 4C CD 21 mean? by jaredcat · 2001-06-19 23:13 · Score: 1

From Symantec's Heuristics White Pages:

Machine language bytes for example 1: B8 00 4C CD 21

Machine language bytes for example 2: B4 3C BB 00 00 88 D8 80 C4 10 8E C3 9C 26 FF 1E 84 00

Figure 3.

Two examples of machine language bytes that instruct the computer to terminate a program. Even though the two sequences of bytes tell the computer to do the same task, they look entirely different.

RedHat Profit by Afreet1 · 2001-06-19 23:02 · Score: 1

Does anyone know where the most recent financial statements are available for RedHat? I just went to the SEC and RedHat's investor relations and all I found was this link to the 10-k issued in April.

According to those statements Redhat is still running a major loss and reducing their cash balance. However none of those numbers match RedHat's press release so I have to believe that the SEC doesn't have an updated report on file yet. The major issue I have is that I want to see the impact of the Operating cash flow alone. If the core business is not profitable then they have just been making money by investing in marketable securities.

Re:RedHat SEC filings by Afreet1 · 2001-06-20 00:13 · Score: 1

That link doesn't seem to contain the most recent data. Perhaps I am not getting the correct filling. Is it not the most recent 10-k or 10-Q report?

Interest income by khendron · 2001-06-20 01:07 · Score: 1

Of course, if you substract the interest income (about 4M$) they made from having money in the bank, then they are back in the red.

What does that mean? It means that they still do not make any money off of their operations. Their revenue is still less than the cost of goods sold.

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Life is like a web application. Sometime you need cookies just to get by.

Offtopic by Daath · 2001-06-19 22:30 · Score: 1

Fear: When you see B8 00 4C CD 21 and know what it means mov ax,4c int 21 ?

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Any technology distinguishable from magic, is insufficiently advanced.

Re:Offtopic by MikeyLikesIt! · 2001-06-19 23:15 · Score: 1

Which is, of course, the "Terminate With Return Code" interrupt under DOS V2 and all descendants.

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I dunno... What do you wanna do?

Re:"Selling" a "free" OS is a good business. by Kierthos · 2001-06-19 22:34 · Score: 1

And if you make it impossible to fix by yourself, you have Windows.

Kierthos

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Mr. Hu is not a ninja.

Does anyone realize how awesome this is?!? by wrinkledshirt · 2001-06-19 23:37 · Score: 1

Consider the following:

Their core product is software that you can download yourself at no cost. You don't even have to pay a cent to help them keep their servers running.
All controversies aside, they've made important contributions both in terms of gcc and the rpm. Both of these bits of software are also available at no cost to its users.
They've built a core product that other companies unabashedly rip off to make their own products, most notably Mandrake. These other companies can get their hands on this source for free.
They've focused their efforts on software that is still in its infancy (less than a decade old) and doesn't have as its main selling points the sorts of things that Joe Average (or even Joe Above Average) worries about on their home desktops (MS Office compatibility, games, fast Internet browsing). It's getting better, but it's still software for geeks.

And they're still in the black. Their business practices violate almost every notion that we've come to accept as granted in order for a software house to make a profit, and they've wandered into an industry dominated by several different longstanding companies, and THEY'RE STILL MAKING A PROFIT!

This is so cool.

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Bleah! Heh heh heh... BLEAH BLEAH!!! Ha ha ha ha...

Try Conectiva Linux by C0vardeAn0nim0 · 2001-06-19 22:21 · Score: 1

Alfredo "windowmaker" Kojima is now working on Conectiva, Brasils leading open source company. Recently he adapted apt-get to work with RPM, and it seems that this is integrated in Conectiva Linux 6.0. Click here for more details.

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What ? Me, worry ?

"comunists" making money ? by C0vardeAn0nim0 · 2001-06-19 22:04 · Score: 3

IIRC M$ said that the free sotware movement was a "comunist" thing, and that it was a threat to the american way of life and for capitalism.

Well, if free software is communism or no, I don't know, but a company making profit with something IS capitalism in it's most pure form and is nice to see Red Hat proving that a capitalism company can make money with free stuff.

Time to eat some of your words Microsoft...

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What ? Me, worry ?

What About Their Future? by Chibi · 2001-06-19 23:47 · Score: 1

I heard this news on the radio this morning, and they mentioned that Red Hat would not comment on their outlook for future quarters.

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If all you have are silver bullets, everything looks like a werewolf.

Believe the hype by necrognome · 2001-06-19 21:57 · Score: 1

Somewhere a fat penguin is laughing, chasing vultures away. Good job Red Hat.

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Let's get drunk and delete production data!

One quarter does not a profitable company make by ClosedSource · 2001-06-20 00:01 · Score: 1

To be in the Black, your assets must exceed your debt. They have to pay off all their back debt before they will be profitable.

Wow.. by codefreez · 2001-06-19 22:06 · Score: 1

I actually got this headline on my phone first rather than slashdot.

It's good to see Redhat's doing ok...too bad the MS FUD people will have people convinced linux is for sinners or something.

Time to go put Redhat boxes in front of Windows boxes at CompUSA. :)

Re:Wow.. by Tech187 · 2001-06-19 23:46 · Score: 1

I try to do my part as well.

I always put CheapBytes stickers on the Red Hat boxes. Nobody should pay more than $3 for a Red Hat distro. You can get a good third-party book on Linux (preferrably one of the good O'Reilly titles) with the money you save.
Re:Wow.. by Tech187 · 2001-06-19 23:49 · Score: 1

technical detail in case the above wasn't explained sufficiently:

Sticker reads:

'Don't buy this box!
Go to http://www.cheapbytes.com
and save!'

Re:My floor is cold... by jsse · 2001-06-20 01:01 · Score: 2

I can't help saying this when seeing your sig.

It doesn't need 5 monkeys to make up that law. You are insulting the monkeys.
&nbsp_
/. / &nbsp&nbsp |\/| |\/| |\/| / Run, Bill!

Does this make them BlackHat ? by chiral · 2001-06-20 09:23 · Score: 1

Was 'Red' Hat an admission of their prospects of turning a profit in the first few years ?

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Fry for Who.

Re:Yeah. I remember you. by ocbwilg · 2001-06-20 22:51 · Score: 2

Yeah. I remember you. The guy who's depending on other people to find his holes for him. And since you haven't built your own compiler, there may not be any visible holes; they could be built into your compiler.

So I'm not hardcore enough to be allowed to use Linux because I couldn't have written it myself and I don't have the time to learn how? Would you prefer that we all go back to the stoneage? The point of technology is that we can use it to stand on the shoulders of giants and reach farther than we could before. The point of open source is that it is available to everybody. It isn't to prove that "I'm more hardcore than you and therefore better."

You don't like a company, you say it wth your wallet.

Absolutely. And I do. I haven't personally bought a Microsoft product in the last decade. When I get the chance to recommend non-MS products at work, I do so. But when I'm at work I'm still stuck with what they give me, and there's little that I can do about it other than "jawing about how bad" MS is. Education must come before action.

SEEEEE? I told you so by FrostyWheaton · 2001-06-19 22:05 · Score: 1

I told you that OSS and service driven computer companies could and would make it. well here'steh proof, you see that? $600,000 of profit! Ha! and all you nonbelievers wer trying to tell me for the last (5?) years that it wouldn't work, well HA!!

Now they just have to make back all the money they lost up to this point.

Homer, that's not God, it's just a waffle Bart stuck to the ceiling
I know I shouldn't eat thee

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Comments should be like skirts. Short enough to keep your attention, but long enough to cover the subject

positive cash flow? by wroot · 2001-06-19 22:03 · Score: 1

A more fair thing to say would be that they BROKE EVEN (finally) Wroot

What does B8 00 4C CD 21 mean? by pgpckt · 2001-06-19 22:55 · Score: 1

I give up. I am not that geeky. Want to tell us non-enlightened what B8 00 4C CD 21 means?

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"Selling" a "free" OS is a good business. by Galactic-Geek2000 · 2001-06-19 22:17 · Score: 1

If you can "sell" an OS that is supposed to be "free", you are going to make money. Make the OS hard enough to use and you will make money on "consulting" too. Great business model.
Galactic Geek

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Not too bad for cancer.... by GreyPoopon · 2001-06-19 22:26 · Score: 2

There are lots of posts out there questioning whether it's really a profit or really positive cash flow, or whether they took a different slant on the numbers to make it look good. Just remember that non-tech businesses all do the same crap. Regardless of what the angle, they have shown that there are valid business models based largely on GPLed software. They have thrown a big "eat your words" into the face of M$. This comes at a critical time where evidence like this can be used to defuse some of the M$ propaganda. Way to go Red Hat!

GreyPoopon
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GreyPoopon
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Why is it I can write insightful comments but can't come up with a clever signature?

Re:...I thought open source was bad for business?? by TikkaMassala · 2001-06-19 22:03 · Score: 1

So they're just scraping by with under $1m profit, whereas Windows is raking in billions? That's hardly turning a profit when compared to Bill's boys.

RedHat SEC filings by Invisible+Agent · 2001-06-19 23:48 · Score: 1

Does anyone know where the most recent financial statements are available for RedHat?

Sure, here they are back to Oct 2000:

http://www.corporate-ir.net/ireye/ir_site.zhtml?ti cker=RHAT&script=1901

Invisible Agent

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Invisible Agent
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Re:RedHat SEC filings by Invisible+Agent · 2001-06-20 02:06 · Score: 1

My understanding is that the 10-K is what you really want - they have to file one each FY, and RHAT's FY ended February 28, 2001. I don't really understand what a 10-Q is (contextually it looks like a quarterly 10-K). The problem with finding better data is that they're not required to publish it real-time.

Invisible Agent

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Invisible Agent
This post is a mirror; when a monkey stares in, no hacker gazes out.

Re:...I thought open source was bad for business?? by Magumbo · 2001-06-20 02:22 · Score: 1

But if you slide this over here like so, and pull on this like this. Ah, there. Now you're free to compare them. They're no longer parallel.

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Re:w00t! by Magumbo · 2001-06-20 02:15 · Score: 2

Congranulations! You just won a pound of sugar.

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Re:...I thought open source was bad for business?? by rudy_wayne · 2001-06-20 08:53 · Score: 1

I like Red Hat and wish them well, but this is pure Spin Doctoring. Their "profit" is the result of creative juggling (all perfectly legal, but juggling nonetheless) and at the end of the day, the reality is that they they lost 26 million dollars.

Over the past 4 quarters, RH has lost a combined total of around $60 million and their stock is barely able to stay above $5.

Don't break out the champagne and party hats just yet.

Re:...I thought open source was bad for business?? by Tech187 · 2001-06-19 23:35 · Score: 1

There are thousands of software vendors making a profit right now. Many aren't publicly traded companies. Few are dispensing an Open Source product.

...I thought open source was bad for business??? by powerlinekid · 2001-06-19 21:59 · Score: 1

Congratulations to Red Hat... they've done alot for the community. But more importantly... this shows that... linux can be profitable, if not as a product than for customer support, service for that product. Haha... and Micro$oft says GPL and Open Source are bad business models. This just proves them wrong (again).

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Re:...I thought open source was bad for business?? by powerlinekid · 2001-06-19 22:10 · Score: 1

The point is not in how rich Red Hat gets, but in that Microsoft blasts the GPL and Open Source as "bad business models" and "non-profitable" which Red Hat has now proven isn't true. Granted, they barely standing on the line and could fall either way, but still impressive netherless.

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can't sleep slashdot will eat me

Re:...I thought open source was bad for business?? by powerlinekid · 2001-06-19 22:17 · Score: 1

Well, Yes and No. Its not that the software is crap like Micro$oft and needs patches etc (although all major software projects have bugs). Its more along the lines of training, Sorry I didn't choose my words wisely enough. So yes the software needs support, but for the most part its due to people whos servers go down, or any problems that come from running a server (as opposed to Microsoft which yes supports servers, but seems like they mostly deal with support of desktop and workstation)

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Re:...I thought open source was bad for business?? by powerlinekid · 2001-06-19 23:41 · Score: 1

Yes out of how many thousands that went under. You can compare raw numbers all you want, but they really don't mean anything. I think thousands is a generous figure, but thats out of tens of thousands that try. That is my point... 3 profiting open source companies out 30 is just as impressive as "thousands" of profitting commercial companies out of tens of thousands.

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can't sleep slashdot will eat me

Re:...I thought open source was bad for business?? by powerlinekid · 2001-06-19 22:27 · Score: 2

Well technically noone is really making money right now... besides what, maybe IBM, Microsoft and Oracle. Sun is hurting, and lets not forget the dot-coms. The thing about the open source companies is that they are new, where in the US I think its 1/10 success rate for new companies. And we're not talking mom and pop corner stores, we're talking about trying to create million dollar corporations. So yeah they destined to fail. However, I promise you that the failure rate of Open Source companies (your Redhats, VAs, Mandrakes, etc) is probably not all that far off from the failure rates of Commercial Companies. Its easy to look at microsoft the king of commercial software and then look at Red Hat the king of open source (sorry to anyone that dislikes redhat, but redhat is the most successful so far) and laugh and doom Open Source to failure. But I have a suspicion that now that Red Hat has gotten its foot in the door, that it should continue to turn a profit. Ultimately thats what corporations need to do, make money. And that is why companies such as IBM, Microsoft, etc are still around... because they some how managed to be that 1 company that was able to make some money.

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Re:...I thought open source was bad for business?? by deaddrunk · 2001-06-20 00:47 · Score: 1

Sadly I couldn't find the first 9 years of Microsoft's profitability, but if you look here you'll see that after 10 years in business (RedHat have only been around for 7), Microsoft made a mere $24M in profit. Microsoft didn't spring fully-formed into an immense corporation in 1975 and therefore mocking RedHat for not doing so in 1994 is pretty pointless. If anyone does have the fiscal info from 1975-1984, it will probably look very similar to RedHat's progress.

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Does a Christian soccer team even need a goalkeeper?

Good and Bad by newt_sd · 2001-06-19 22:04 · Score: 1

Thats great that a business model actually is working and working with open source double great but is this the future of open source free unless you want custom support or some other feature

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Is this possible? Can it be true? by McD!ck · 2001-06-19 22:57 · Score: 1

Now that we see that Linux is a feasable option, perhaps all the computer superstore chains will finally start shipping machines to the public with LINUX installed default *GASP*. As the old poll fortold, Cowboy Neal did well this time, but he still has a lot of work to do! Must be tough when the future of linux rests in your cabable hands. ;)

Perhaps a new poll should be "Which linux Distro is going to make a profit next?"

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People who are against human cloning must be bitter they are not good enough to be cloned.

RedHat in the Black by trmpet1 · 2001-06-19 23:20 · Score: 1

We Love You Red Hat....Alot like the little engine that could....now maybe the little engine that runs Gates and Micro$oft over? No?

To celebrate by Violet+Null · 2001-06-19 22:14 · Score: 1

I hear that Red Hat is going to be giving away their software pretty soon. I don't believe it, myself, because, hey, once you start giving away your software, how are you ever going to make money?

They have to start somewhere by Genoaschild · 2001-06-20 01:01 · Score: 1

Not all companies can grow big over night. Some take an initial lost in order to stimulate the business for a future gain. This just might be the beginning of a new empire. The one that finally destroys Microsoft or we could have another Black Tuesday and Redhat be completely wiped out, it could go either way. Hopefully, the first.
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Re:It's about time! by Genoaschild · 2001-06-20 01:27 · Score: 1

The only way to defeat Microsoft is to stop giving Microsoft more money. Ways of doing that including Boycotting MS and taking away their business. Like you said, we need enormous amounts of cash to do this and some person or some organization as an intermediary to disperse this cash toward the current needs for commercialization, education, and the courts. As for boycotting, this is tough but requires less money. Try convincing millions of Ford buyers to purchase Toyottas instead. You're going to have a hard time.
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Just because a bunch of people believe or do something stupid, doesn't make it any less stupid.

The way I see it by Genoaschild · 2001-06-20 02:09 · Score: 2

If I had several thousand dollars available I would invest in Redhat on the basis that

1) Redhat has turned a profit. With the prospect of future profit, their is now more reason to invest in it.

2) Microsoft is rolling out WinXP. Although this is a "consumer" OS, their will be problems with it. Major problem is installation. Everytime you wish to reinstall WinXP you're going to have to call MS. This isn't a problem with home consumers but is for businesses. If you bought a thousand brand-new spanking compuers with XP on it, that is a thousand phone calls you're going to have to make and one to two day wages for someone to make that call. If you're a techie and have to reinstall OSes all day long, this will become an extreme pain in the butt. This will ultimately lead to more businesses searching for alternatives to this problem.

3) With respect to other OSes, XP is massively overpriced. This will lead businesses and home consumers to look for alternatives for their needs.

4) When XP comes out, MS is going to force increase sales of XP w/ respect to other MS OSes. OEMs have seen this before and will only take Microsoft's shit for so long before they start to look for alternatives.

5) Linux is really cool and returns the power to the user. Red Hat helps provide this.

6) As Red Hat decreases the Learning Curve and more apps become available for Linux, it will become more and more viable solution to the end consumer. In other words, as total price/item becomes lower(including tech. support), it will become a better alternative for businesses and home consumers alike.

7) RH increases competition in a dominately closed market. People see and recognize this and so, more money will go into RH in order to decrease OS prices, increase competition and selection, resulting in better deals for end users.

8) As recorded by History, the world is statistically better when more then one person rules it, resulting in something that is more efficient and better for its citizens overall. This applies here. What would happen if the world had only one electic company who happened to be unregulated. It would give electricity to those in Rich Metropolitan areas, jacking up the price so that only a select few can afford it, leaving everybody else behind, and become unbelievably rich.

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Just because a bunch of people believe or do something stupid, doesn't make it any less stupid.

How much until... by SilentChris · 2001-06-19 22:15 · Score: 1

...they break even totally (make up all the losses?) Never mind. If it was Amazon it'd take forever. :)

Sorry... by ColGraff · 2001-06-21 03:47 · Score: 2

...but I didn't mean five regular monkeys. I meant George W. Bush-quality monkeys. I think you'll agree that's valid.

In response to your own .sig, I actually mentioned my own 50 karma at a college interview. The interviewer was not impressed.

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Re:My floor is cold... by ColGraff · 2001-06-21 03:53 · Score: 2

Why do they need to manage e-business solutions? You'd think that hell would be a nonprofit for tax purpose. They might need something to help them organize housing, torture, etc. for each client, but regular DOS spreadsheets could do that quite nicely. Especially when you consider that they probably have a relatively small number of people assigned to each demon for housing and torture. In other words, the master list would only have to say who is assigned to which demon. That demon, in turn, would have no difficulty keeping charge of his 30 or so clients. Yes, I know that's a lot of demons, but I think it's reasonable. After all, before computers they would have needed a sizeable staff just to keep new arrivivals up to date in hard-copy lists...

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I'm the stranger...posting to /.

My floor is cold... by ColGraff · 2001-06-19 23:09 · Score: 3

Has hell frozen over? Or are they just supercooling their red hat boxen down there?

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I'm the stranger...posting to /.

things just keep gettin' better... by KapHn8d · 2001-06-19 22:03 · Score: 1

Good job and well deserved! RedHat's success and new publicity and backing from companies like IBM and Compaq are what is bringing a change that's been too long coming. Sit back and grab some popcorn... open source is about to re-release Deliverance on DVD... starring none other than Micro$oft's very own, Bill the Pig.

Free Software Economy Model by Zangief · 2001-06-20 00:57 · Score: 1

I always thinked only existed one model for free software; some small (or not so small) company, or a group of people, who can't pay licenses for comercial programs, start maintaining some program, necessary for their business. If the program isn't maintained, they got screwed. So they maintain, and can keep their business.

That model worked for Apache, and lots of other GPL programs. But now. RH has demonstrated that providing support for free software also works. Thumbs Up, RedHat!

205 comments