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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.
Is there a need for step 3?
Lesbian Nazi Hookers Abducted by UFOs and Forced Into Weight Loss Programs - -all next week on Town Talk.
I'm very pro Redhat, they make the best version of Linux in my opinion. Gentoo seems interesting but ridiculous to setup, Debian is too old and would require I upgrade every component after I install it, Redhat is easy to install and fairly up to date, its also easy to upgrade.
I dont very much care for the RPM system, I hate dependencies, I dont really like everything about Redhat, but it works so I use it.
Redhat has contributed new code, they are doing a good job at improving functionality. RPM while I dont like it does improve functionality, Up2date while I dont use it does help newbies, and bluecurve which I dont really like does make Linux easier to use.
If you use Linux, please help development of Autopac
... that's what Microsoft or Oracle make in a week. I don't think the OS business model is quite there, yet. ;)
And I s'pose you pay for all the software you use, right?
By that I mean, "pay the market price for each individual program", not "paid for shareware once because you couldn't find a crack".
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
I have no specific opinion on how viable Open Source software sales can or should be, but a sample size of one success is hardly scientific proof that it is a viable business for others to get into...
Better than debian existing is the fact that you have a choice to choose from.
I prefer the "u" in honour as it seems to be missing these days.
Exactly, it may not be a person's favorite distribution, but RedHat has done, and continues to do a lot for Linux. Personally, I use Gentoo, but I'm happy to see a company succeed that puts as much legal, economic, and coding effort into Linux as RedHat does. It seems like RedHat and SuSe are behind a lot of good media coverage, and are usually the first ones to step up when needed (SuSe in Europe, and RedHat in North America, like in the SCO case).
Sure, they sell a free product, but what they're really selling is updates, pretty manuals, and their continued commitment to Linux, and support. Without RedHat and SuSe, Linux would probably be three years behind where it is now, and you wouldn't see as many companies switching to Linux, and as many Linux stories in the news.
--That's the point of being root, you can do anything you want, even if it's stupid.
1a. Invest heavily in open source development, quality assurance testing and support infrastructure.
I know it's just a joke, but RedHat really makes some serious contribution to the community. First it's a distro of its own from day one, rather than a straight fork from other distro; Second it constantly contributes back to the community with their huge development teams; third their keep bunch of maintainers(e.g. Alan Cox) well-fed so that they could continue with their contribution without worrying about their morgage. :)
Someone else mentioned that the selling of Free Software is somehow an affront to the people writing Free Software. They are probably modded down to -1 Flamebait by now.
They are wrong. When someone writes software and releases it under the GPL, they have set free another piece of software. It is really the most beautiful thing you could do for a piece of software, in fact. Without getting into the whole debate about whether it makes sense to anthropomorphize ideas and code by saying the overused phrase "Software wants to be Free", I will just sidestep the issue and say that as a moral developer I believe that software should be Free.
I didn't always feel this way. I used to think that software that I wrote belonged to me as a result of my thinking about it and transcribing my thoughts into Emacs. But this is wrongheaded thinking, and I was shown so by the FSF. It boils down to the fact that once I release my code from my brain it ceases to be mine. Whose is it, you ask. Well, if it doesn't belong to me, then it certainly can't belong to you either. It exists on its own as a Free entity.
Software makers use the artificial method of copyright to recapture this software and to claim ownership of it. This is not unlike the slave traders of old. I would go on here with the slave trader analogy because it is so completely apt, but experience in this forum shows me that most people here who claim to believe in the ideals of the Free Software Foundation simply do not understand the goals of the organization nor the fundamental reasons behind the movement.
So why is selling Free Software okay? Free Software cannot sell itself. It is an inanimate object and thus needs a broker to handle transactions for it. The broker can be as simple as a roommate copying a CD ISO or as involved as a complete corporation dedicated to distributing and supporting the software. Because the software is Free, it can go anywhere and do anything, but of course it needs someone to help it along.
Selling Free Software is good for Free Software. It is nothing more than a person or company taking a small fee for introducing the Free Software package to a new friend.
"And sure, they haven't directly contributed much in the way of new code"
Yeah Redhat and its employees like Alan Cox have hardly contributed anything!
Redhat's business model is certainly a success but with Microsoft posting $8.07 billion in revenue and $1.92 billion in net income, it's pretty ridiculous to say that selling software is dead. I'm sure record industry numbers would probably support that their industry while in a slump isn't exactly dead either. Both business models have a place and are not mutually exclusive.
On another note, large corporations probably do more to support Redhat's business model than any of the other entities you listed. We have contracts with vendors for just about every product we use. Yes, we also have "experts" on staff, but vendors are called on quite a lot to deal with issues with hardware and software.
- 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.
You suck. So does moderator(s) who think(s) every post that contains ??? is funny.
Why would anyone invest heavily in open source development when there are lots of people doing it for free?
Because no one wants to do the shit work that you still need to do to make a system "Enterprise" ready.
Since Redhat and IBM doesn't make the software they can't guarantee any "quality assurance".
Yes they can, and they do. They have a QA department that runs QA testing on software which they subsequently ship. Just because its Open Source doesn't mean you can't QA test it.
Support is an low-largin, low-salary business, not a growth-area.
If its not a growth area, whats with the growth of Redhat?
China is now moving toward Linux, when big governments such as these move toward Linux, this means the revenue stream grows x10, government has the money to buy support, and they are the kind of customers who cannot afford to make mistakes and are likely to buy support
So it's up to China to advance the cause of OSS? You might want to have a look at their <sarcasm>altruistic</sarcasm> actions during the "Great Leap Forward", "Cultural Revolution", at Tianenmen, and in Tibet... The PRC is not interested in spending a dime with foreign companies if it can avoid it, among other things.
Imagine how much harder physics would be if electrons had feelings! -Feynman, maybe
The way he explains it, you would think that the Freedom that he speaks about is the Freedom of developers to do stuff with GPL'd software. This is not true.
The Freedom that he so ineloquently describes is Freedom of the SOFTWARE. The Software itself is Free, Liberated, Unchained, whathaveyou. Because it is Free and cannot be made UnFree (this is why the BSD and similar licenses are not Free Software Licenses; even the FSF is falling for the BSD linguistic trickery) you gain the benefit as a developer of all those wonderful things that RMS talks about.
But the key point is the the Software is Free. I wish RMS would stop confusing the issue by trying to make people think the GPL grants users extra rights because it doesn't. The GPL simply sets up a way for Free Software to never be made UnFree.
People are buying those computers, and the boxes sitting on the shelves at Wal-Mart. It doesn't really matter how they got there. Selling software is FAR from dead at the present. You are claiming your perception of the future as the present.
- b
Well to make such an amzing progress takes effort. And they pay their programmers pretty well too ! Most of them have the luxuries of a nice car & home.
They deserve to be where they are right now, the system they have adopted (which has both programmers & volunteers working on RHL) seems to be working really well. That leaves us wondering why haven't the others followed a similar approach & if they did, have they been as successful as RedHat ?
Mandrake is an end-user desktop distro, primarily. Selling support is not going to be a viable model for them, and with ubiquitous broadband and CD burners, selling boxed CD sets is a tough route to go as long as they make a free-as-in-beer distro.
Given their position, I think the careware "Mandrake Club" is about the only thing that will work for them unless they decide to follow SuSE and cease to make free isos available and rely soley on retail CD sales.
damaged by SCO? Red Hat might have been damaged
and its revenue could have been much higher,
but because of the Microsoft/Sun funded anti-Linux
campaing it did not show.
Just because revenues are not lower, we
can not conclude from this alone that they
have not been damaged.
I would like to honestly point out something that seems to be often missed by free software advocates and is a major reason why the free software argument has had a difficult time politically.
You have an opinion about what software becomes when it leaves your head - that the information is "freed". The world at large has a very different perspsective on that, they view it as intellectual property.
Who is "right" or "wrong" objectively is for philosophers or saints to decide. In politics, the question is never, "who is right", the question is one of "what works" to progress society? (the reason for this is that politics, even democratic politics, is not a realiable means to figure out right from wrong)
I am saying this because rhetoric like the above message is clearly philosophical, it is not political. Using a philosophical stance will not help the cause of promoting free software and reasonable copyright laws in this world, because philosophical posturing is often not concerned with reality as it is, but how it should be (or how the FSF says it should be).
The idea of copyright as a means to promote the progress of society is an old one, and still may be a good one. But it continues to be stretched to the point of abuse by those who wish to turn this principle into solely implying the progress of for-profit corporations. We must fight this trend politically. That means, we need solutions, and we need actions, and concrete visions.
We do not need philosophizing about whether charging a fee for free software is good or bad, or rationalizing it as "giving a small free to other friends". I point out this not as an insult, but because you seemed to have hit RMS' philosophy square on the head. It is a crystal clear example of why RMS is ineffective in politics but ESR is somewhat effective. (I sometimes wonder if the FSF goal is free software or universal friendship?)
I think most people realize that economic transactions in the world exist precicely because most of the world is not friendly with one another. We may regret this, think it awful, but it is
-Stu
"freeloaders, anarchists & hypocrites."
/Dread
- Every person on the world likes the concept of gratis, why should "the community" (I dont like labeling, but..) be different.
- Anarchism is a political view. It can be reasoned its the utmost freedom political view. It is however not something "bad"(C)
- ALL of humankind are hypocrits.
Its time people understand this "community" is NO DIFFERENT then others.
Greetz
(C)G. "dubya" Bush.
I don't think anyone is claiming that you can't make money with open source.
Not now, they aren't.
Have you got your LWN subscription yet?
A: "so whaddya think about this new linux thingy"
B: "uhh"
A: "well they've got a market share of 1.2 billion now"
B: "aren't they all chinese though"
A: "oh yeah, screw that"
Mandrake could really become a significant force in the enterprise server area in Europe if the French government gave the same sort of push for its internal use as the Chinese government gives Red Flag Linux. Or for that matter as much as the German Governments at the federal, provincial and municipal level give SuSe.
Hmmm... where to start....
People think, ok China moving to linux big deal. Or they say, ok big deal, but not anything amazing. China moving to linux is huge.
Maybe. Many (myself included) will reserve judgement.
Think about it, over 1 billion people will use linux isntead of Windows. Microsoft could have potentially sold a billion copies of windows for $100-$200 each. Now, much much less will be the case.
You're falling into the erroneous thinking that the BSA likes to use in its marketing campaigns.
(Blindly translating numbers into potential $$'s)
Firstly, many in China cannot afford enough clothesto go round the family. Many are only slightly better off. How on earth can these be included in the 1billion potential computer users?
(Only when a country gets the general populous up to the levels seen in the West will computers become so ubiquitous.)
Of the millions in China with computers (the components are built over there, or in Taiwan, in most cases...) many will not pay for the software.
'Piracy' is rampant (as US software corporations like to shout about.)
In the end, you're down to a potential few million copies of Windows being sold. It's probably not that much bigger than one of the European countries.
Now, with a billion linux users I'm sure at least a few of them will have technical problems.
Someone who offers linux support in Chinese
for a reasonable price could stand to profit considerably...
And speaks the language natively, is familiar with the culture, grew up in it, etc. Basically it's a pretty closed market so far as money is concerned. What China wants out of Linux is to be sending less money to the US on account of running Windows, whilst still enjoying its trade principles (which is why it can't simply say Windows copyrights are null and void in China.)
What Linux has to gain from China is more open source software being written. The comments will probably be engrish, ASCII being to prodominant in programming languages to change in a hurry. With the way the GPL and friends work, it only takes someone to upload code to the internet for the OSS community to get hold of it.
In short, China, along with many other countries, does not present a market in quite as straightforward a way as you suggest.
John_Chalisque
As you pointed out it's easy to make money robbing people, especialy when the law allows it.
The project is on hold, largely because a lot of clueless lusers thought the shift was a perfect opportunity to flood redhat's development mailing lists and ask stupid questions. Redhat is going to wait until after their next release to try again.
I think this is one of the main problems large projects have right now. Mozilla's bugzilla, the OpenOffice.org mailing lists, and many of the other primary communication means of large projects are being flooded with people who aren't developing for the project and don't know what they're talking about. The projects don't want to move to a model where only those made members by a list/bugzilla administrator can post, because that would really discourage new developers. So the signal-to-noise ratio just gets worse and worse.
You probably mean something like "Linux-popular"
"Traditional" implies a degree of popularity. It's the way most distributions do things, the way that is taught at various Linux courses...
But this is all semantics.
Save your wrists today - switch to Dvorak
up 9 percent
Not much of a surprise, I guess.
They sell it for a thousand dollars or more, saying they are only charging for 24/7 support. But whoever runs Red Hat Enterprise knows that it is a very stable software, and, once you have set it up, requires only small atention. So, in fact, it works like a product.
Purchasing services might be good if you have on special neeed, but 90% of IT needs can be supplied by off-the-shelf software, that should require little baby feeding. The whole Linux mantra "you get the software for free and pay only for support" is not endorsed by many companies - they don't want to have a source of impredictability on their budgets. Red Hat has learned this, adapted itself and is making a living, paying for a lot of free software developers. If you tune free software, purge the bugs and sell it, you have gains of scale that could not be possible on a traditional service model.
Buying Red Hat Linux is great for a company because, even after they stop supporting it, you can hire someone to backport bugfixes and support it - you get the freaking source code of it.
Yes, but not "Linux-traditional".
Yes, "Linux-traditional"
Since the Linux startup grew from BSD-style Unix startup, Slackware IS the most "Linux-traditional".
This is obvious to anyone who knows the roots of Linux.
Before you get too excited, so does Apple:
For the last quarter:
Research and development: $120M/7.8% of net sales
Selling, general, and administrative expenses: $299M/19.4% of net sales
That includes some non-advertising, retail-related expenses, but it's almost 3x as much. All those commercials ain't cheap.
Not that I'm saying that it's a bad thing -- I'm just saying that's it's probably true for pretty much any company.
Source: Apple's 10-Q
Microsoft is.
Seriously, there's nothing stopping MS from coming out with its own distribution, other than the fact that they would be undercutting their own market more than they would be undercutting RedHat or anyone else. If it's the black market you're talking about (or the "gray market"), and MS putting out boxed sets that claim to be official Red Hat software, then I doubt that MS is worried enough about RedHat's income enough to risk anything that close to being illegal. (They generally only engage in blatantly illegal activities when there's a lot of money to be made off it.) If they take out RH, then there are several hundred other distributors to jump into the gap.
Your Servant, B. Baggins
You know, posts like this are why I like browsing Slashdot with a +6 Flamebait modifier. :)
You say that "Red Hat makes cash from volunteer work and don't [sic] give back." First of all, the most obvious point to make is that there is nothing requiring them to "give back" anything. All that they have to do, according to the GPL, is to make sure that they continue to release the source code to the software. They are not required to make yearly donations to GNU or to the EFF.
Second, they do give back. The money that Red Hat makes doesn't all go straight into Bob Young's wallet. Red Hat has lots of developers that are working on lots of things, such as cluster management and IP load balancing. These are capabilities that benefit the community as a whole, and the money flowing into Red Hat allows them to pay talented developers to make a lot of useful contributions to the operating system and its supporting software. What's wrong with that?
Finally, your assertion that Red Hat is making money off of OSS developers is pretty silly. The basic functionality of any Red Hat release is still freely-downloadable over the Internet. Red Hat is not making its millions of dollars from Joe Linux User buying a boxed set of CDs at Egghead. Instead, they're making money from businesses and corporations who are buying Red Hat Enterprise Linux AS (for example) at $2,499 a pop. These people are not shelling out money for Mozilla or Apache. They're paying for things like 24x7 tech support, Red Hat Network subscriptions for OS upgrades and security patches, the additional "enterprise" capability provided by the more-expensive products, hardcopy documentation, etc.
Your average Red Hat home user needs none of this, which is why your average Red Hat home user doesn't pay a dime for his/her distribution. Those of us who have been using Linux for more than a decade have been fighting hard to get it into our places of work, and the types of things that Red Hat (and others) are now providing, such as round-the-clock support, are exactly the types of things that the PHB types wanted to see before they would allow it in. I know that there are plenty of purist types who believe that nobody should be allowed to make a red cent off of software, but I'm inclined to cut Red Hat some slack here. They're helping to increase Linux acceptance in mainstream IT shops by leaps and bounds.
We're going down, in a spiral to the ground
my point exactly...but you beat me to the post. Contributing code isn't the only way to contribute to the linux kernel. People forget that many linux distributor's are employing the top kernel hackers so they can feed their families and contribute code on their own time...