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Red Hat In Business News
jferg was one of the first people to write about
the coverage in today's Observer in regards to the latest business happenings at Red Hat. The article touches on the launch of RH Advanced Server, but one of the most telling statistics was "Red Hat now has 90 percent of its 630 employees working to lure corporations looking to move their computing platform from expensive systems running on the rival Unix operating system to Linux, widely considered to be the more cost-effective choice."
I spent half the article waiting for the writer to provide some facts, but by the end, there still weren't any.
She says:
Does this mean RedHat is moving all their employees to the marketing department? Does it mean everybody is told to make 9 cold calls a day? All we're given is the typical investor information, share price, projections, etc., but little information about how the business plan is working or changing.
Frankly, the few real facts that are provided show a mixed bag, hardly worthy of the article's pessimistic title. Yet another Linux story trying to make news rather than report it.
There is no need to use a SlashDot sig for SEO...
The problem with your argument is that certain software problems require a massive investment and that requires centralized resources or planning.
.NET could never be developed and planned in an ad-hoc manner, even though they might end up enabling a decentralized business model.
Think of things like RDBMS systems, where the decentralized attempts are 20 years behind the commercial versions. Even software systems designed to work with the 'internet model', like Java or
Being a student at NCSU, home to RedHat's new corporate offices, I had the privelege yesterday of sitting in on a presentation by Matthew Szulik, CEO of RedHat. Though his presentation was on entreprenuership in NC, the talk quickly diverged into discussions of Open Source and how in the heck they plan on making money. I took the following things away from the lecture:
1) Szulik is a decent guy. His message of measuring entrepreneurial success in social terms instead of the quarterly shareholder statement was quite refreshing. He honestly seems to embrace the ideals of Open Source.
2) He stated during the lecture that despite having spent less than $1 million on advertising, RedHat is the 12th most recognized brand name in technology. Though the N&O article may suggest that 90% of their staff is in marketing, it probably suggests instead that they are simply working at making RedHat a better replacement for Unix (this takes marketing AND coders).
3) A number of skeptical members of the audience asked how they would ever make money. There were two answers: subscriptions and services. IBM is the best example of the tremendous market value of services, however Matthew spent more time on the subscription side. Let's be honest. Your average sysadmin doesn't want to have to deal with package management and keeping a system up-to-date. The RHN is a step in the right direction for managing the herculean task... it worked for me. I paid them $60 for a priority membership and I'm most pleased with it.
90 percent of hatters are not marketing people. I don't know where the article got that statistic, and would be quite interested in knowing.
Most of Red Hat's revenue does not come from selling the box set, but from other sources; check out their last quarterly report . Not that the company doesn't make money on people buying the box, but that's not the companies largest revenue stream. Red Hat is a service company and it makes sense, stratigically, to target enterprise customers; they have very deep pockets and are willing to pay for an all encompassing solution, including services like consulting and support. Unlike you and me, aka the cheap bastards!! Well, I don't know about you, but I'm definitely one. Pay for software, you must be mad! Sorry little rant.
As for the fact that Red Hat is targeting a Uni* to Linux migration. Well, some people will disagree with me, but Linux, even with all it's graphical user stuff, is not ready for my Grandmother to use. It's getting there, but I don't think it's there yet. So if a large chunk of the population is unable or uninterested in your software, who do you sell it to? Is it reasonable to think that the people who would be interested in Linux are people who are already interested and are using Uni*? The two are very similar and it's far easier for an administrator or developer who is familiar with Uni* to switch to Linux rather than one who is used to Window$. Corporations have been employing Uni* for quite some time and have been paying people like $un a hefty price for hardware, OS, and support. In the current economic climate, I think it's a great strategy for a company to move to a lower cost IT solution. Why shouldn't Red Hat be the people to turn to? I say kudos Red Hat!
-Runz