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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.
- 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....
... 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.
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. :)
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.
"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.
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.
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
Does anybody happen to know how SuSE
- with its "demo-mode" CD-ROM d'load
(only...) is doing, ie compared with
RedHat, financially?
TIA
Yes. Any company smaller than Microsoft and that doesn't have several billionaires on staff must be considered unsuccessful. I find your ideas fascinating and wish to subscribe to your newsletter.
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.
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
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.
redhat is very easy to install and configure, is mostly up to date, and security patches come out very quickly. given (basically) any intel/amd style hardware, I can usually get a redhat system booting within an hour with little tinkering. it includes the redhat-config-foo lineup, which make major system setup tasks very convenient; however, for the most part, redhat's configuration files and scripts are not 'managed' by the distribution. redhat also has a tendency to heavily patch some portions of the distribution (for example, the kernel and gnome/kde).
debian is far more difficult to install and configure (and the stable distribution is pretty old), but once done, updates and configuration are as simple as apt-get and dpkg-reconfigure -- switching to unstable will put most of your system ahead of redhat. the apt repositories are extensive -- for example, installing ardour on a red hat system will require quite a bit of hand-compiling and tweaking, but under debian it's nothing more than 'apt-get install ardour-gtk', with all the dependencies automagically computed and installed as well.
personally, I have abandoned up2date/RHN in favor of apt-rpm. the apt-rpm repositories *are* much smaller than the debian repositories, but they are a superset of redhat's own updates, and they include a lot of other things as well. for those who don't need/want a redhat support contract, apt-rpm provides much the same functionality as up2date, but without leeching off redhat's servers to get bugfixes and upgrades. an advantage to apt-rpm is that many, many 3rd party applications are available as RPMs -- and these don't tend to stress the RPM system as much as unofficial .deb's do.
they're different distributions with different purposes & I'd say each is the best in its class. kudos for a great 2nd quarter!