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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....
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*
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.
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.
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!