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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
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
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.
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
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)
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.
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.