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Could Microsoft Buy Red Hat?
An anonymous reader writes "Various news sources including ZDnet are today reporting that Microsoft is considering buying out Red Hat, speculating that 'Microsoft could see Red Hat's acquisition as a nice way to undermine IBM, but might not consider that a sufficient reason to do it,' adding that Red Hat is however '...a company that wants to be Microsoft and, like Microsoft, makes its living packaging and selling other people's ideas.'" That description seems to miss the key point that Red Hat releases the software they package and sell as Free software, and that both companies pay coders to create and improve software in the first place.
1. It would be seen as an admission that the Windows Server technology is not what it is cracked up to be, and be read by the market as such. The immediate impact to the server business would be significant, and it is the only segment at Microsoft that is growing.
2. It would be seen as an admission that Linux MIGHT have some redeeming qualities, something that the Executive team at Microsoft has been avoiding at all costs. Just like Hertz and Avis, #1 should NEVER acknowledge #2 in the market.
3. It would dramatically confuse the market at a time when Microsoft is trying very hard (read $100M+ marketing) to win the server space and defend the desktop.
You may not like Microsoft, but they don't tend to make really stupid mistakes, and this would be one. It just ain't gonna happen.
A most overlooked advantage to owning a computer is if they foul up there's no law against wacking them around a bit.
First off - the link goes to someone's security blog - Here are the links to the Zdnet/News.com stories -
5 ">ZDnet story
r end/2100-7344_3-5701700.html?tag=nefd.top">News.co m story
9 &tid=136&tid=88&tid=123">they just delivered their evidence to SCO, what would the point be in settling. The blog continues to state that most other distros (Linspire, Debian, SuSE) are largely irrelevant now, and goes on about how IBM would sell Linux/Cell-based workstations and servers. How close are we to cell processors? I thought we were still some distance from seeing as widespread use as the blog seems to state.........
http://blogs.zdnet.com/open-source/index.php?p=27
http://news.com.com/A+Microsoft-Red+Hat+warming+t
The ZDNet blog states the biggest problem posed to RedHat would be IBM settling with SCO and developing an OS for the new Cell processor. Why would IBM settle now? After http://slashdot.org/article.pl?sid=05/05/05/22420
My MythTV HowTo
I can't help but be quite distressed that I see a blinky ad for Microsoft right below this story.
-- Rachael
They cannot control Linux by buying one distro, and at the same time a buyout would make it look as if Microsoft sees Linux as a threat, or that Microsoft is finally accepting Linux as valid.
-Cnik
With Star Wars III coming, I couldn't help but offer the idea that an MS buyout of Red Hat would create a huge "disturbance in the Force". MS would end up owning the leader in Linux software packages, but I think that a MS branded Linux would not be particularly well accepted by current Red Hat customers or current Windows customers.
MS would benefit if they wanted to move the next-version-of-Windows-after-Longhorn to a Linux codebase, but they don't need to buy Red Hat to do it.
Instead, MS would simply create a vacume in the Linux world which would be quickly filled by another distro vendor.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
Microsoft's relation to the GPL would not change at all if it acquired Red Hat. MS would need to release the source code for their own derivative works based on GPL code, but would not be obliged to release source for their own non-derivative work. This would be the case whether or not MS bought Red Hat.
Wasn't it just last week we were talking about how Microsoft was going to begin hyping their products using a paid blogger 'grassroots' campaign?
You don't suppose a bullshit story like this that ends up on someone's blog could simply be testing the waters to see how effective the online rumor mill is, do you?
If you're half as beautiful naked, you'd be 4 times as beautiful with twice as many clothes on.
Everybody would drop Fedora like a hot rock and move to a distribution that isn't just a free development vehicle for Red Hat to make tons of bucks.
Gentoo, Debian, Slackware, Ubuntu... They'd all be the biggest beneficiaries of such a move, and Microsoft would be left with a worthless property.
I dropped Red Hat after Red Hat 9, because it started to become clear to me that my customer space wouldn't be able to afford Enterprise and that Fedora was (by design) too fast-changing to support. I now run all my servers and desktops on Gentoo and it's working great for me. The main advantage I see is that I can control and minimize the dependency hell that Red Hat was and create tighter servers with less subsystems loaded on them to update in the first place.
Overall, though, this is just pie in the sky - it'll never happen. It definitely must be a slow news day in the IT world if this is even a valid topic to discuss.
Instead of Red Hat, MSFT would be better off buying Sun- they both sell propriatary systems, both dislike linux (not Sun so much, but they do) and it would be an extension of many of the deals they have struck recently. I don't see where RH makes sense, but I can see a better story with Sun given the slump in their stock, etc....
# nohup
As cowardly as they are, I really doubt that the FTC would allow this to happen. Aside from Apple (and OS X won't run on x86 hardware), Linux is the only real competition to Windows. I cannot fathom any circumstances under which Microsoft would be allowed to buy out the competition like that. Granted, there are other Linux distros out there, but Red Hat is the only real player when it comes to Linux in corporate America.
Another reason to buy Sun - Microsoft likes preaching about security, and Sun actually has a server line that can deliver there -- with even higher government certifications than any of today's linuxes.
Could Microsoft buy Red Hat?
- So-Incredibly-Boneheaded-we-all-may-as-well-go-hom e-and-watch-their-embarassment-unfold-on-TV day.
Yes.
Will they?
No.
This is just the product of fevered imaginations, fantasizing what they would do with Bill Gates money. Gates has so much money precisely because he doesn't do stupid things like this. Microsoft is not going to buy a service business, which is pretty much valued at annual revenues. They're going to buy companies with IP, which are valued several times higher.
They're certainly not going to buy a service business where many of the customers suspect that they are mortal enemy of the platform being serviced. Far from undermining IBM, this would be like the day Coke announced they were ditching the old formula. Pepsi gave it's employees a holiday to celebrate. They probably could have called it Our-Fiercest-Competitor-Makes-a-Business-Decision
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
For all of the insane articles that percolate to the surface on /., this article is impressively insane.
So what "various news sources" are cited here?
"News source #1" is Paul Murphy of ZDNet, who basically says "gee, I suppose it's *possible* that M$ could buy RH, but, um, not really."
"News source #2: is "whitedust," the well-known... er, well-respected... er, who are they again? Anyway, the quote from "whitedust"...
"On the surface of it, the concept of Microsoft buying out Red Hat does indeed seem rather humorous. However as commented in the ZDnet article; Red Hat is a company that shares much the same business model as Microsoft in that essentially it makes it's (sic) living packaging and selling other people's ideas. That alone is enough to give some credabilty (sic) to the notion of some kind of thoretical ethical union one that would perhaps be less likley (sic) with any other open source developer."
So, to recap:
Coke-snorting "whitedust" website claims that Red Hat and Microsoft are a perfect pair, editorializes that purchase is imminent!
Really, truly, impressively insane.
1. It would be seen as an admission that the Windows Server technology is not what it is cracked up to be, and be read by the market as such. The immediate impact to the server business would be significant, and it is the only segment at Microsoft that is growing.
Being that Linux is Open Source. Buying redhat, just to gain Linux technologies seems like an expensive and needless task, and they still have to keep what they added as GNU. Also being that Linux and Windows are more even on the server market it is seen as a way to control a major competitor. Not that their products suck. It is like IBM buying Sun. And having people go AIX must of sucked because IBM bought Sun to gain the technologies in Solaris.
2. It would be seen as an admission that Linux MIGHT have some redeeming qualities, something that the Executive team at Microsoft has been avoiding at all costs. Just like Hertz and Avis, #1 should NEVER acknowledge #2 in the market.
Well Microsoft has already admitted that Linux is a threat. They have done so for a while. They still underplay it but they have admitted it. Anyone except for the mentally retarded who know about Linux knows that there are some redeeming qualites over Microsoft, they also know that Novell Netware has some redeeming qualites over Microsoft, and Solaris...,...,... . There are a fiew application I have seen that don't have a redeeming quality over a competing product (being they are producted at around the same time)
3. It would dramatically confuse the market at a time when Microsoft is trying very hard (read $100M+ marketing) to win the server space and defend the desktop.
As the market will see it they are buying a competitor. This is what Microsoft does and what they have always did. If they cant squash them then buy them. Also being that IBM has been doing a big Linux Push away from windows, Microsoft probably still want a piece of that action.
Is Microsofts Mac unit hurting them, No, Is their Unix unit hurting them no. They know that they will never get 100% market share. But they might as well get a piece of the action of the other 10%.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Is it just a coincidence that Michael Dell just invested $100 million of his own money in Red Hat, or could it be another case of insider trading?
Are you kidding? A Bush FTC won't do diddly-squat regarding enforcement of anti-trust laws.
My suggestion is you guys re-examine your options regarding increasing your support of Debian.
I have a controversial response to the part-line 'ain't gonna happen" comments.
1. Both Microsoft and Red Hat are under a great deal of pressure to deliver profits.
2. Currently, innovation is not coming at the pace that it did in the 90's. In any publicly traded industry, this leads to consolidation. (AdobeMedia anyone?)
3. Price of both companies shares has stagnated. This generally fuels consolidation because shareholders demand high profits.
4. Red Hat is not as cash-rich as MS, but they are the -clear- leader in enterprise linux.
The acquisition would be good for Microsoft.
-They buy the undisputed leader in the segment
-Make Red Hat the red-headed step-child in terms of price and service to Winblows server. This crushes the Sun and Novell Linux strategy and puts them in-play versus IBM.
-Fire most of Red Hat's engineers to keep the business profitable at rock-bottom prices, maintain the distro and stifle competitive innovation.
Now, the humans running MS would likely be mortally opposed to it as many have pointed out. And from a common-sense perspective it should qualify as anti-competitive, but the legal world doesn't run on common sense.
From a Microsoft business perspective, it is a -great- idea.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
You're absolutely correct.
"Golly, boss, M$ just bought out RedHat. I guess we'll be installing Windows Server 2003 on our Linux server now. Darn."
Would anyone out there want to learn Microsoft administration rather than just pick up another distribution of Linux? I know I wouldn't.
If anything, why wouldn't Microsoft just create their own Linux distribution and run it head-to-head against RedHat and try to put them out of business using their Explorer vs. Netscape business model...
If Microsoft buys Red Hat, then will Fedora Core get better or worse?
[o]_O
Why would Microsoft want to buy Red Hat? Those with their tinfoil hats on would say so that could shut down Red Hat and thus, rid the world of a primary Linux-powered rival. However, think about it - someone would simply take their place - Novell, some corporate entity supporting a Debian or Gentoo distro - and they'd be right back where they started.
.NET for linux project, and put most of the RHEL guys on it. Mono won't work for [fill in the reason].
After a while, yes. Let's play Devil's Advocate, though - I'm Microsoft and I can't get Longhorn out the door and Linux is catching up too fast.
I need to slow down Linux.
OK, who pays for a large chunk of Linux development? (it's easier to whack one big mole than several little ones) RedHat. RedHat contributes a heck of a lot of code to the open source community. IBM and Novell et.al. couldn't immediately take up all the slack if RedHat vanished tomorrow.
Steps:
1. Buy out RedHat. Announce no immediate changes.
1.a. Some percentage of RedHat quits same day on principle and starts a new company
1.a.I. It takes at least two years to get that company off the ground, with all the subscription management software, infrastructure, sales force, channel partnerships, certifications, etc.
1.a.II. It takes 5 years to be back to the strength RedHat was at.
1.a.III. These guys are out of the way.
2. Announce all kinds of linux/microsoft synergies and interminglings
3. Start a new
3.a. some of the team quits.
3.a.I. Novell absorbs some of them
3.a.II. IBM aborbs some more
3.a.III Others get private sector jobs but have less time for open-source development. These guys are out of the way.
3.b. Some of the team stays due to not wanting to move, etc. These guys are out of the way
4. Repeat with other Microsoft technologies
5. Ship Longhorn
6. Cancel said projects. Disparage Linux as the reason. Move team to China.
6.a. These guys are out of the way.
There, another 5 years of market dominance achieved for a stock-leveraged RedHat takeover. The math is good. This is the right thing to do for Microsoft stockholders.
Don't look at it as a long-term strategy, look at it as literally buying time. The Open-Source community may be able to out-code and out-architect Microsoft, but when it comes to dollars and cents Microsoft is king.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
if you really want to help out the world, why they hell do YOU have to benefit in some ridiculously selfish way??
Because unfortunately, in this world, food, shelter, and clothing isn't free, and neither are the creature comforts we've become accustomed to.
Insanity is a gradual process; don't rush it.
It seems the common beliefs here are that a)MS will never buy redhat or b) they are just out to undermine IBM. Another thought is considering the level of grief (from this site and others) that Microsoft gets over continually providing backwards compatibility and thus exposing itself to vulnerabilites, performance problems, etc. maybe they are looking to take a page out of Apple's book (again) and take a stable OS and create a new commercial product from it.
The biggest threat Red Hat faces right now is that IBM could settle with SCO and then release its own Linux along with workstations and servers based on the Cell processor.
IBM doesn't need to settle with SCO to release it's own version of Linux. All it needs to do is... release it's own version of Linux. Hell, they could download RHEL, rebuild, rebadge, and sell that.
Given that Cell outperforms x86 by an order of magnitude and doesn't have the security weaknesses built into the x86, this would leave them fighting to hold an ever decreasing share of a shrinking market.
What insightful commentary. Anyone who seriously believes the Cell processor outperforms conventional architectures by "an order of magnitude" for anything but specialized tasks needs to lay off the crack pipe. That big impressing 256 GFlop figure that's been bandied around is the theoretical "if you fill every pipeline" number, is almost entirely comprised of FP operations (guess what - most business servers aren't busy rendering pretty pictures), and is for a single precision pipeline which rounds in a non-standard way.
Know what the performance hit is for IEEE854 double precision FP? A full order of magnitude. There goes all that theoretical performance, and you lose the benefit of the industry dominant instruction set, and gain a whole set of programming peculiarities of the new architecture, such as the lack of a branch prediction unit even in the PPC core.
No. The IPO cash would effectively go to the shareholders. Microsoft would have to pay extra to buy the company because of the surplus cash held in the bank.
They would be happy to pay this extra money because they know they can get it back immediately by taking it out of Red Hat's bank account once the takeover is completed. Of course, they might decide to leave it there, but that is their choice.
M$ would do it, Simply Buy out redhat, claim back the code used in linux that redhat contributed (even if it's illegal to do so) and sue the linux devs for using "their" code.
shut down linux and gnome, linux would have to go back to the days of yore, pre-1997, and microsoft would have no one to worry about competing with.
It could be that simple, Might be wrong, but this would allow them a grasp of power over opensource to crush it.
Let's hope this is rumor and hearsay.
or else your use of linux may be deemed illegal.
Full disclosure: I own a very small number of RHAT shares.
I see no reason for MSFT to buy RHAT, even for the purpose of shutting it down. If MSFT was dumb enough to start such negotiations, RHAT would just let the rumor leak and drag out the process while their stock soars. RHAT shares have been doing quite well lately, fueled by nothing more than an OLD revelation about Michael Dell and his $100M investment. An MSFT buyout rumor would further pump the price of RHAT without any need for increased earnings or expanded market share.
A real or vaporous MSFT buyout would be like tricking Al Qaeda into promoting US Treasury Bonds.
Man, I thought comments from ACs were bad, but story submissions from ACs REALLY suck.
I guess it's too late to Not Feed The Troll.
Anything is possible given time and money.
>> Red Hat '...makes its living packaging and selling other people's ideas.'
We often see this assertion. It makes no sense.
Unless you buy or acquire your software directly from each individual developer, everyone cranking out Linux distributions is packaging and selling "other people's ideas".
You might as well argue that McDonald's got rich by stealing the idea of the hamburger.
Nothing more than simple opposition toward and envy of anyone that's successful.
-- Slashdot: When Public Access TV Says "No"
It's about money. Red Hat is an enterprise that exists to make money for its Shareholders. IF a deal paid a good premium to Red Hat shareholders, then, they would be foolish to sell out.
.NET, Office. Come on, if they actually had Visual Studio for Linux, KDE may as well just give up.
It's not unusual to have more than one O/S. IBM sells you more than one kind computer and more than one kind of operating system and has made a fair amount of money on it for years. MS could do the same.
It might save MS some money. They've got billions of dollars a year plowed into Windows R&D, and what are they getting out of it? Nothing? Where's the growth in Windows? MS could theoretically make a mountain of money simply by offering a migration path to Linux - everyone must migrate to their Linux Enterprise edition, and suddenly that's billions of dollars.
Finally, having control over the premium brand is an excellent way to hedge your bets. Microsoft would control the trump of Windows and the trump of Linux. Certainly having all of those Red Hat developers could make for better ports of things like
In short, Microsoft jumping on the Linux bandwagon is nothing less spectacular than IBM jumping on the PC bandwagon some decades ago. Remember then, they said that elephants couldn't tap dance? History has a way of proving rebellious pundits wrong.
This is my sig.
Can someone out there who actually understands the stock market (that wouldn't be me) answer this: What percentage of Redhat is publicly purchasable right now in the first place? Even if they wanted to, could MS buy more than 50% of the company at all?
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.