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Red Hat Posts Its Best Quarter Yet
wrinkledshirt writes "Anybody remember the days when the naysayers said you couldn't build a viable business model centered around open-source software? After Red Hat's 2nd quarter report, well, insert(&mouth, FOOT); is all I have to say. Okay, okay, the hubris of a Linux zealot aside, the numbers look pretty good. Revenue for the quarter was $28 million, with net income at $3 million. You'd think SCO's blathering would have damaged them, but they're actually up the last couple of quarters after posting some net losses in previous quarters." Kudos to Red Hat. They must be doing something right.
Sorry to say this, but selling software is dead. There is no money to be made in it. ;)
; -- the corruption of government starts with its secrets. a truly free people keep no secrets. --
Red Hat's SEC filing is here and show, among other interesting facts, that RH has $307m in cash in the bank, which is more than enough to pay for the lawyers to fend off SCO.
In many respects the six monthly figures are even better: a move from a loss of $6.3m in net income to a profit of $4.8m. Sure, a drop in the bucket compared with MS, but you've got to start somewhere.
Hey, that's just not entirely true.
IBM released a lot of their own code into the Linux kernel, and they've released other great products like Jikes, JFS, Eclipse open source out of their own pocket.
RedHat has Alan Cox on staff, and a few of the drivers and a lot of utilities for Linux have been written by Redhat.
A lot of the software that Redhat distributes they aren't really involved in, but they aren't selling Linux anyhow. They are supporting Linux. By giving companies a safety net of support, they have switched a lot of people to Linux. This means more general software and hardware support for Linux. Before Redhat, you had to buy specific hardware in order to get it to work with Linux, but now pretty much everything has a Linux driver. If nothing else, they've at least got the support up for Linux enough that people will release specs for their hardware to people willing to right drivers.
Karma Clown
Here is the report those numbers come from if anybody is interested. Forgot to include a link in the previous post.
- b
There are very, very few companies that contributed to Linux and open source in general as much as Red Hat did during last decade. In code, money, advocacy and jobs.
How much exactly did they contribute? AFAIK, RH does not have much more than a dozen full-time people working on GPLed Linux stuff. And this company generates $25m per quarter. This is insignificant.
You just don't want to face it: the world divides in 2 categories; those who develop free code and those who use it. The ones who make money are the 2nd category. RH just commits a symbolic amount of ressources back to the community; the most of their R&D is in proprietary stuff. There's nothing morally wrong with that. When people give away something, they shouldn't expect (or demand) anything back; otherwise it's not a gift.
The single company that makes the most value out of Linux is IBM. They have the optimal structure (IBM Global Services), brand and product portfolio for that job.
That's the great ambiguity about "making money out of OSS". You can only make money if you take significantly more than you give. Does anybody knows about a corp. making money when 75% of their engineers write GPL code full-time?
It would be nice to be sure of anything the way some people are of everything.
I cannot talk about FreeBSD, my experience with Debian is that they are always a few steps behind for a matter of stability.
The "drivers" as you claim are kernel modules, and to my knowledge Redhat kernel sources are availble ( Redhat 8 and Redhat 9 ) you can also check in the update section.
So I would guess if you have trouble with Debian, either your kernel is not up to date (ftp.kernel.org) or the installation fails to detect and configure hardware correctly...
BTW I used a Dell box to try out Knoppix (which is Debian based) and have not met any problems.
May I use your sig please?
Mandrake, Corel, and VA Software are all losing money. It's particularly impressive just how proud VA is that they've only lost 3.7 million in the first quarter this year, as opposed to the 9.8 million they lost first quarter last year. And you can't exactly claim it's starting losses either, all 3 have been around for years.
Transgaming doesn't have financial information on their site, but they're a tiny (20 employees according to this June article) private Canadian company. While that's great for those 20 people, I don't think selling access to freely distributable software and asking people not to distribute it is really a scalable business model. Lindows is apparently another small (they claim 50 employees when trying to explain why they charge for click-n-run, who knows if it's accurate or not.) private company.
And Loki... You know.
SUSE may be the only other major profitable company there, I can't really tell since they also don't list financial information. (At least, not on their English site, and not that I could find on their German site with Babelfish.)
So, out of 8 Linux companies, one is (maybe 2 are, if SUSE is good.) large and profitable, 2 are small and private, 3 are large and losing money, and one already went bankrupt. Still not enough to really mean anything, but not quite as happy a picture as just considering Red Hat.
For a RedHat user, you sure don't seem to like much about the way it's set up. You sound like a hands-on, technically inclined person. IMO, you should consider Slackware if you decide to try anything else. It is by far the most stable of all the distributions out there and if you know anything about the workings of Linux, you will find it very easy. All of the packages are up to date and easy to install.
I don't personally like RPM either, so rpm2tgz is my friend. It does include RPM if you ever need it though. The BSD style init scripts are easy to configure. The file placement scheme is very well thought out, making modifications, program install/updates, whatever a breeze. The distro setup program is very easy to use making package selection a no-brainer, as well as setting up networking, pretty console fonts, whatever else you need.
For anyone who want's to get into the inner workings of Linux and really understand what's going on 'under the hood' so to speak, Slackware is a good place to start. It's easy to use, yet flexible enough to get real work done. What more could you ask for?
</plug>
You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
You mention some good points, but there are many companies making a profit off of open source software other than Linux. MySQL, IBM, Trolltech, Intel, and Dell are just a few (yes, I realize some of these companies make money in other ways as well, but they all report their open source-related activities to be profitable).
SuSE also allows FTP installation of its latest distribution. It is a common misaprehension that they only supply "demo-mode" CDs.
But we have to remember about the roots - RedHat is becoming a little bit prioprietary, a little bit uncompatible... yes! yes!
No, Why don't you read RH's patent policy first HERE
basically they're defensive patents, I wont say anything more cause you should read it yourself and become englightened.
-- "of course thats just my opinion, I could be wrong." --Dennis Miller
they only supply demo-mode CD ISOs
I called into this and here are my thoughts and Notes --
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.02 a share. Subscription volumes projected to increase
In summation: they are growing at about 10% although operating costs are up a little.
From what I heard they are moving to a sales model more like Microsoft's relying more on VAR's than direct selling. Their Enterprise subscriptions seems to be moving well -- mostly driven by VAR's and OEM's and this is the driving foce in RH money today!
Kernel modifications to be released in 2004 will make Linux more accessible to Large Databases -- (where was this in 2001???)
They are branching out successfully in N Europe and Asia
Messy but thorough Notes:
2nd quarter 2004 conference Gabriel Zulik --
Matt SZulik , Kevin Thompson, Tim Buckley, -- press release after market close today -- disclaimer --
Matt Zsulik -- good news - strongest quarter ever revenue 28.8 mil 36% up 10 mil in positive growth -- Global enterprise marketplace -- replacing proprietary UNIX's for Linux -- migrating from client server to internet distributed computing -- Linux pilots -- enterprise Linux 26k in q2 -- increased international investment -- Japan Korea and northern Europe -- pacific rim partnerships -- 3rd party apps RH certification -- network appliance and people soft certified -- BEA will be in also -- embedded RH offering for hardware tools telecom positive for embedded -- Certification RHCE's 10k -- mgmt John Young from HP as VP of marketing -- Large DB's will be accessible with Kernel configs -- more enterprise ready? A shortcoming previously
Kevin Thompson -- milestones -- 1) operating profit of 240k -- operating loss of 1.1 mil in q1 -- 2) Linux enterprise subscriptions 26k up 10% 585$ each sub up 3% 3) revenue is up 200% 4) subscription renewals up 90% 4) revenue in general is up 20% 5) 3.3 mil up 120% in net income.18.5 mil in subscriptions -- mostly in enterprise 10.3 mil in services -- mostly in enterprise a little in embedded Q2 strong growth increased by enterprise subscriptions Renewal rate is healty at 90% for enterprise subscriptions -- large customers with direct relationship it will be a year before they realize true rates. Over 25% represent migration from another system to RH -- commitments to migrations of enterprise from other RH users. Retail is at 3.1 million -- Rh Linux 9 Enterprise from 2mil to 9 mil -- 13% growth over 1 year -- OEM helped with consulting and learning services business. Embedded 1.7 mil in revenues -- mostly driven by services. International revenue is up mostly from Japan and N Euro. -- korean market Tim Buckley will address More talk about enterprise subscriptions driving up margins Operating expenses are up -- raises -- commisions and office space in Korea and legal costs. 3.1 mil profit -- currency gains -- because of US dollar vs YEN and Euro. 307mil in liquidity balance -- no long term debt. Said they were confident in growth because of enterprise subscription -- projection for q3 31 - 36 8 - 10 % growth overall. Enterprise projected up 12% in q3. Retail strategy will be more supportive of enterprise (going away (?)) Operaing expenses will go up significantly -- 2.9 for full net income or
Tim Buckley -- enterprise -- partner and channel -- enterprise best bookings ever -- upgrading to enterprise solution multi year -- federal sector and DoD increase significatn contract -- new biz in other agancies -- sales support and consultin -- finaclail sector - new customers - multi year contracts - broad based addoption strategic ini finacila retail manu - semi c telco entertainment -- applicarin vendors like ppl soft proting to klinus -- new pipeline growth -- market broadening. Re-sellers and partners -- extended with IBM x series -- preinstaled and preconfiguired -- higest volume offering -- HP and IBM -- expanding channel -- assist in selling process -- Oracle and BeA promoting RH increase in sales bc of their influence -- sellingmodel from direct to indirect -- repsellers are d
Could *you* package a product stable enough to support an enterprise?
The only way I could do so would be by using Debian stable. And the Red Hat Enterprise version is much friendlier (especially during the setup). Also the Red Hat edition has support for multiple raid partitions at various raid levels, and various other features that are more than a bit difficult to configure when starting from a vanilla Debian. (Mind you, I think the pricing is rediculous, but if that's what it takes to convince people...)
I think we've pushed this "anyone can grow up to be president" thing too far.
Now, if I recall properly, Red Hat was derived from the BOGUS Linux distribution by Rik Faith. Rik later wrote the package utilities PMS and PM for Red Hat, and Erik Troan and Marc Ewing used those as the basis for RPM version one.
I doubt BOGUS was a Slackware fork -- the structure was quite a bit different. But I'd like to think that Slackware might have helped them accompish their first compiles, and maybe given them some ideas. Several config files did make it over, at least.
Yes: anaconda source rpms
How about their build and dependency system ... ?
The build and dependency system is all inside the rpm program and associated libraries. Here are the source rpms for rpm. If you are worried about chicken and egg installation issues, an rpm tarball is available here.
How about their build and dependency ... database?
The actual (complete) package database for redhat 9 is available in this little known gem of a package which is included in redhat but not installed by default (and IMO should be). The spec file for rebuilding the package database can be obtained from the corresponding source rpm, provided you have a copy of all of the redhat rpms for a particular version.
In general, almost everything in redhat includes source code. If you have to ask, the source is probably available. There are a few rare instances where redhat does not provide the source code, but these are pretty obscure and you have to know redhat fairly well to run into these programs -- so well that you wouldn't need to be asking in the first place!