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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.
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. ;)
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.
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?
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.
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