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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.
But I haven't paid for it. I'm still using the demo account.
Sure, it doesn't act like "real" Linux for a lot of things, but it's very painless to install and very easy to run. It's almost to the point that a non-geek could run it.
And sure, they haven't directly contributed much in the way of new code, but they're been a big cash cow for a number of project developing groups.
Go RedHat!
The emperor is naked.
I think the old model of selling products is dead anyway, its dead in the music industry, its dead in the software industry. Theres only so much software you can sell to people, what? You think Microsoft's model would work in the third world? You are wrong.
Redhat actually has a better long term model, a service model which will work despite the changes in economy. The service model basically says, take our software for free, but if you want help using this software, sign up for support.
This will work great for Operating Systems, Microsoft could easily give away Windows and charge for support, antivirus, upgrades, etc. 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.
School systems also are the type of customers, businesses I think at least the small to medium sized businesses can use the support, the large businesses can hire their own experts.
If you use Linux, please help development of Autopac
- 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....
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...
We, along with many other companies around here, have serious enterprise deployment of Redhat Linux and Oracle, thanks to their Redhat+Oracle enterprise initiatives.
However their vendors don't seem to catch up with trend. I got many calls this week from a ASL sales asking for some clarification to our order:
"Are you sure you don't need Arcserve for Linux for your tape drive?...dar? oh tar...tar? I really think you need Arcserve for schedule backup....cron?...."
"Are you sure you don't need GEAR PRO for your CDRW drives? I believe you need it for writing some CDRW....I don't think there's any CDRW burning software bundled....what cdrecord?...."
"Are you sure you don't need any antivirus sof"
*DIALTONE*
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.
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. :)
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.
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.
You'd think SCO's blathering would have damaged them
You would think, but I think the SCO case has actually done more good than harm. Why? Listen to the publicity SCO are putting out - they are complaining that Linux is too good, it has all these enterprise features normally found in proprietary UNIX and their products and services can't compete with Linux-based companies out there offering similar services.
I can just see IT managers out there going "has it? can it? It'll save me how much? I want some of that!".
How many more business people have heard of the Linux and free software as a result of this?
No publicity is bad publicity as the saying goes...
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.
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
Cowboy Neal wrote:
Uh, because success is measured in dollars, right? In that case: kudos to Microsoft. They must be doing something right. Kudos to Enron. They must have done something right. Kudos to penis-enlargement spammers. They must be doing something right.
"Making money" is not necessarily the same thing as "doing something right." Redhat may or may not deserve kudos - that's a separate issue - but if they do, it certainly isn't for having a bank account.
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?
Does anybody happen to know how SuSE
- with its "demo-mode" CD-ROM d'load
(only...) is doing, ie compared with
RedHat, financially?
TIA
to say it has not affected us would not be accurate; we continue to spend a lot of time with customers around this. Those who are sitting on the fence are using this as an excuse to continue to sit there
It's rather silly to deny that it's costing them revenue, but I suppose it's a sign of a good business when they manage to deal with it and still post a profit in the process.
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.
- FORM 8-K
CURRENT REPORTPURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Red Hat, Inc.
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.
-- "of course thats just my opinion, I could be wrong." --Dennis Miller