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.

Comments

What's terrifying

[Anonymous Coward]

• Red Hat has a profit of $3 million this quarter
• Microsoft has so much money they can afford to just randomly toss off $8 million this quarter as a random aside just becuse dropping that money into keeping SCO afloat might generate bad PR from one of their competitors.

Implication: It is more than twice as profitable in the short term to become Microsoft's random lackey and wait for bribes from them than it is to make a useful, worthwhile product that competes with Microsoft.

Is this a sign of a company with too much power? Nahhhhhh....

Re:What's terrifying

[Pharmboy]

It is the job of the IT industry to enable their customers to do new things that weren't possible before, but also to make doing existing things cheaper.

The fact that there's less money to be made from selling software is good news for the economy. (Roughly speaking, there are exceptions..) They should be spending their money on business intelligence, not on infrastructure that is roughly speaking "solved".

Nice point. Cheaper software makes it easier for small businesses to grow, and large businesses still need the support and tech's to impliment this software, so they hire, spend, develop, and contribute (via GPL). Anything that lowers the cost to start up and grow a business is good for jobs, good for the economy, good for consumers who now have more choice in the market place.

Personally, I have a few rhn $60/year basic accounts (and they just gave me one for free). I also have servers that do not have the service yet but still benefit from it. It is nice to contribute toward the success of open sourced software in a small way, but more importantly, they offer a killer service that pays for itself in the first month or two.

Being able to update several machines while I am at home, in a web browser, has allowed me to manage twice the servers. We use older servers, and tend to run ONE service on each box. Each box is configured as a backup server for another server, so we have great fallover protection. rhn is pretty stable and reliable. In almost two years, I have never had a problem with any updates it installs. You can even install and uninstall software remotely.

They have done a few things I didn't like, like cutting off support for 6.x and 7.x too fast. It WAS dumb of them to allow their certificate to expire, causing a problem where everyone had to manually download and install two RPMs for up2date.

But I can speak as a satisfied customer, overall. Their lowest tier of support (Basic Entitlement) is offering value and a very good service for many of us.

Re:Doesnt surprise me one bit.

[Anonymous Coward]

I think the old model of selling products is dead anyway

95% of all software companies disagree, including giants like IBM and Microsoft. Considering the number of "support only" companies veruses the number of companies that sell both software and support wouldn't you say so?

Redhat actually has a better long term model, a service model which will work despite the changes in economy.

Think again my friend. If the economy TOTALLY went down the crapper Red Hat could be supported by dirt cheap armies of people who have used Linux for years. That and well, the source is out there so it's not too difficult to hire a couple coders and fix things yourself.

and they are the kind of customers who cannot afford to make mistakes and are likely to buy support.

First, I have heard Red Hat's support is horrific. Like it or not that's what people tell me. Second, if you can't afford to make mistakes, hire your own coders and sysadmins. What's easier, to sue someone and hope you win or fire a coder who breaks your super duper mission critical system?

You have some truly "pie in the sky" ideas about how things work these days and how they'll work in the future. I appreciate your ideas but some of your statements are ludacris.

OT: So, how is SuSE doing?

[ivi]

Does anybody happen to know how SuSE
- with its "demo-mode" CD-ROM d'load
(only...) is doing, ie compared with
RedHat, financially?

TIA

Re:OT: So, how is SuSE doing?

[hughk]

Suse is a German public company limited by shares (AG), but it isn't stock exchange listed so the accounting disclosure rules are negligiable. Unless they decide to list there is unlikely to be more information and the high tech market sector is dead.

German corporate taxes are painful so the tendancy is to minimise profites. When Germany's Neuer Markt was alive, companies could pay taxes according to their books filed under German law (HGB) but publish results according to IAS or US-GAAP. The tax man was held at bay by the agreements that supported disclosure in the Neuer Markt. Now there is no such segment and the tax man is very hungry - so any figures published will understate profits.

However, from the word going around, Suse aren't doing at all badly. They have always gone for a more corporate image which makes them appealing to big business. RH's hacker culture counts against them on this even though they have been very successfully climbing up market.

Why the bigger numbers?

[Pros_n_Cons]

Some things I'm about to say might be alittle harsh but Slashdot needs to take its medicine.
First does anyone remember when Redhat9 came out, a huge selling point for them was that you could beat the rush and get RH 9 a week early if you signed up for support? An aweful lot of people signed up for that (including myself) . so many infact it ended up killing thier servers speed to something around 5k. But guess what. Slashdot posted bit torrent within the first hour happy to offer non paying customers a better solution. So how many people will be buying support this time around do you think? Not as many I'll bet.

If Slashdot is always talking about morals and doing whats right with everything from patents to software. Why can't they allow a company that has argueably did more or atleast as much for linux then any other single company to earn a buck for just one week? Thats all folks. It's time we start showing as a community that we're not just a bunch of freeloaders, anarchists & hypocrites.