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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."
Do you think that the sliding sales, not only in Redhat but others as well, could be due to these factors: 1) An increase in broadband over the last couple of years by home users. 2) The popularity of ISO's days after a new release. Instead of going to the store to buy a distribution, I can sit on my ass at home and download three ISO's, burn em to CD, and have everything except documentation. Mandrake has the right idea IMO, with their users club or whatever they call it..Reaping profits through other means.
Certainly better than Microsoft, which is 90% lawyers.
The speed of time is one second per second.
It may just be that building large publicly traded coporations is not the way to go with open source software.
I'm no economist but I see no reason why this should be a terrible thing.
Personally I don't care how corporations fare. I care how individuals fare.
If individuals can succeed, without a corporation then I think that is better anyway. Large organizations tend to carry along overcompensated freeloaders. (Read CEO, CFO, etc.)
I would like to see an economy where individuals are compensated on their merits.
Like I said, I'm no economist and I don't have all the answers but I don't understand why I see articles that intimate that Open Source may fail because it does not work with the old business model.
In my eyes it is the old business model that is failing and a new one needs to be found.
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It's hard to believe that's how Micronians are made. Why don't we see it right now by having you both kiss one another?
Of course "UNIX" (whatever that is, Solaris, AIX, FreeBSD?) is an easier target than Windows. Still I think it is wrong to focus on the 'easy' targets; in the end it does not help Linux (including Redhat) if UNIX as a whole (including Linux) looses marketshare. The outside (Windows) is what we must gain from.
An internal healthy competition in the Unix camp is not necessarily bad, but if the UNIX camp is primarily focussing on getting each other, all will die soon. The only long term hope for survival is to withstand or push back the outside (non-unix).
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...
Isn't that just the regular distro without all the man pages and howtos?
What bothers me more, is the way the article is writted. OF COURSE Windows server software sales are higher then those of Linux server software. It's because 90% of Linux servers are being installed from CD's burnt by system administrators themselves, seeing as Linux is free, DUH! It's a waste of time to say that 41% of all server software sold in 2000 was done by MS, while only 27% is Linux. The "sold" part is indeed true, but if you look at this from the "amount of new servers installed" point of view, the whole thing turns upside down.
The article implies that RedHat tries to make money by selling RedHat software to large corporations. That's not entirely true, selling software has ALWAYS been only a fraction of things providing RedHat income. "Services" is mostly support. Corporations want support, support sells, thus, services makes money. Simple.
The only problem with selling support that I can see is the "ethical" side. GNU/Philosophy tells us we should be selling services and software support to people who use our software. The side issue is, if you really DO make great software, why would anyone buy your support ? Do you have to specifically make you software buggy so people can ask you for support and pay ?
But they don't sell software. Sure they make a nominal amount of money off of selling boxes-o-software, but you just can't really sell something to geeks very easily that they can download.
I think that a marketing shift like they're doing is trying to funnel more people into the parts of their business model that allow them to hire that many people. Pretty much they're a huge consulting firm that just happens to find it convenient to maintain a distro that they have control over.
If they were to get a hold of Openmail, they really might be able to slash MS right out of the server space - as long as they could keep MS from messing with the protocols.
AFAIK, Exchange is the number one reason to have MS anywhere near the datacenter.
I guess it would make an easier move for a corporation to go from Unix to Linux, but imho Linux's real threat is MS/Unisys, not Unix.
You're half right. It is relatively easy to go from one of the high end flavors of UNIX to Linux. Reliable, familiar software at close to zero licensing costs that takes advantage of in-house UNIX experience is a no brainer decision for any corporation in that situation with a CIO that has a clue.
The second part is reversed. MS has been hoping to climb up into the server room from the desktop, leveraging the dominance of various complicated lock-in file formats and protocols it owns at the desktop. It's been partially successful since Intel compatible hardware is cheaper relative to traditional high end UNIX RISC platforms. And, with Win2K, they've finally got reliability up to the point where they aren't laughed out of the room.
But Linux is MS/Unisys' real threat, because while they focus on trying to climb up into the lucrative high end of the server room, Linux is coming up from behind, offering an even lower cost option than MS on Intel.
If I were MS, I'd see the biggest problem being high end UNIX shops tunneling through the mid-cost option of Wintel to the even better option of lowest-cost Lintel.
"Provided by the management for your protection."
We bought some copies of RedHat because we needed the support.
We recently switched all of our hosting equipment from M$ to RehHat (thanks largely to yours truly and the M$ machines' continued insistance on crash-and-burn computing).
The problem for RedHat is that I can get more and better support from #linuxhelp (take your choice of IRC undernets), Linuxdoc or just about anywhere else than I can from some guy at the corporation. I know the OS, and it doesn't take much time to find answers to stuff I don't know.
When I start trying to do undocumented stuff or I start having bizarro problems with the JVM, shared libraries or something else then the RH support guys don't know as much about the problem as I do.
I want to go to people who write the kernel, the libraries, the product or whatever isn't working and ask them. Online. For free.
I think the comments about going to a "club" style support system makes a hell of a lot more sense.
My $0.02 will always be worth more than your â0.02, so
Exactly.
I'll take it one step further. Large corporations are not the way to go with the Internet in general.
The Internet is a naturally decentralizing force. At the protocol level, it's amazingly decentralized, by design. The tendency is for anything it touches to be decentralized.
Consider software. Open source is the ultimate in decentralized software. Could Open Source exist in anything approaching its current scope if there were no Internet? To be blunt, it couldn't. Look at the progress of the GNU project in 1993, the midpoint of its life to date. This was also just before the great explosion in the 'net.
Consider media. Ten years ago, the average home in the US got, what, 30 channels of TV, plus a newspaper and a few magazines. Now, there are thousands of websites, each offering a different focus and a different point of view.
Consider entertainment. Ten years ago, if you wanted to distribute music on any sort of scale, you had to go to the RIAA or to an indie label that was limited in its reach. If you wanted to have your writing published, you had to go to a publisher of some sort, or pay exorbitant fees to a vanity press. And let's not get started on motion pictures. Now the Internet is allowing real distribution of entertainment media at huge savings (especially when P2P is taken into account).
As the Internet becomes more interwoven into business, business will decentralize. As business decentralizes, wealth and power will decentralize.
In short, it was the great fallacy of the 1990's that you could become rich thanks to the Internet, the dominant effect of which, ultimately, is decentralization.
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.
RedHat's staff :
90% marketing
09% coding
01% managing
You can make fun all you want. But I think that's the way to go.
And yet what has it done for consumers? Relatively little.
Here again, you focus too much on the delivery protocol and ignore the surrounding facts. While the internet and technology may technically enable artists to remove the so-called middle-men from the actual act of transfering the music/data, it really doesn't make RIAA or its respective labels any less relevant. Their function is primarily one of marketing and capital/risk taking. Even if distribution changes radically (which I could well argue against), RIAA continues and will continue to dominate the industry.
Again, this is not terribly different than the PC OEMs. We have the emergence of MORE choices amongst major companies, that continue to retain some 95% of the market, and a bunch of little guys fighting over scraps. The technology may bring offering choices more into the cost effective region, but there's nothing to say the major media conglomerates will not dominate. The major companies enjoy many significant advantages over the little guys. In any event, there's no real significant decentralization happening here if you measure it as consumer mind/hour share or in dollar figures, just the emergence of increased choice.
Here again, I disagree. While I was no cheerleader of the DotComs, the fallacy of the internet WAS that you could get rich quick without really working for it and without having to generate any real value for society...it was thought of as more of an act of arbitrage than anything else. There is still money to be made by exploiting the benefits of the Internet, but it requires some sanity, risk taking, honest to god effort, and willingness to scrounge for capital and take on all the nay-sayers.
which doesn't typically boost investor confidence. In late March, Chief Executive Officer Matthew Szulik filed to sell 425,000 of his shares after filing to sell 600,000 shares in February, according to documents filed with the U.S. Securities and Exchange Commission. Company co-founder and Chairman Robert F. Young has unloaded nearly 700,000 shares so far this year, part of a plan in which he sells shares automatically on a daily basis.
When the founders/owners/top execs of a company start dumping shares, that's not a good sign. These guys know how the company is really doing.