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Red Hat — Stand Alone Or Get Bought?
head_dunce writes "It seems that this economy has inspired a lot of businesses to move to Linux, with Red Hat posting profits that beat everyone's expectations. There's a dark side to being a highly profitable company in a down economy, though — now there are talks of Citigroup and Oracle wanting to buy Red Hat. For a while now, we've been watching Yahoo fend off Carl Icahn and Steve Ballmer so that they could stay independent, but the fight seems to be a huge distraction for Yahoo, with lots of energy (and money) invested. Will Red Hat stay independent? What potential buyer would make for a good parent company?"
Support. It's a lot easier to call a vendor and bitch than it is to post your bitch on Slashdot. No wait...
Whereas I'm not too concerned about Red Hat Linux (especially since Oracle already has a version of it they brand as their own), my *real* concern is for JBoss, one of the best app servers out there.
If Oracle had not bought BEA, I'd think they'd buy up RH and replace oc4j/App server with JBoss, but since they *did* buy BEA, they now have WebLogic and JRockit; they'd probably just put JBoss out to pasture, which would leave a lot of folks who have deployed JBoss high-n-dry.
Yes, they wouldn't do it right away and yes, there's always the possibility of a fork, but it would make it that much harder of a sell to the boss who wanted to go with JBoss because it was a lot cheaper than what Oracle wanted for their app server.
I can't think of a good match. Maybe IBM just because IBM's service arm seems to be doing really well, but then that would be bad for the whole industry for IBM to own an enterprise Linux distro.
It would be kinda funny if Microsoft bought them and actually tried to make money off Red Hat Enterprise Linux, though....
LedgerSMB: Open source Accounting/ERP
Citigroup does not want to buy red hat and will not buy them. The citigroup analyst is speculating that now is a good time for some one else (Oracle, IBM, Sun) to buy them.
Does this mean we're going to have those "What's in YOUR wallet" commercials switch to "What's in YOUR computer?" I can see it now...
"Hi, I'm a Mac."
"Hi, I'm a PC."
"Hi, I'm a viking maurader. Bleeeeaaarrrgh!"
Red Hat Linux: Sneak attack, bitches.
#fuckbeta #iamslashdot #dicemustdie
SCO is the obvious choice.
Since Citigroup got all that money they could call it "Stimulix"
What?
So Oracle and Citigroup are thinking of buying Red Hat, eh? Perhaps they envy the freedom that Red Hat possesses. Perhaps they wish to control Red Hat in a way that no others could. Did they hear a whisper from Microsoft?
I think that the worst possible thing is for Red Hat to be consumed by a larger company such as Citigroup or Oracle. Their statements and actions demonstrate little understanding or regard for the culture in Red Hat.
Their wish to buy Red Hat is akin to the wish to put a flowing river in a bucket. Once the water is in the bucket, it is no longer flowing.
To put it differently, to derive the benefits of Red Hat, they would either just buy the software they produce and use it, or buy their stock and sit on it. But as soon as they try to control it at their own whim, that which was free and living, will squirm away, somewhere else.
Imagine what will happen to all the customers, developers and channel resellers who trust Red Hat now. It will simply not be the same with a new master.
I hope Red Hat can maintain their indepence for the sake of everyone who depends on them.
The diversity and expression of human opinion is essential to human survival.
It wouldn't surprise me to see IBM end up owning Sun, Red Hat and Microsoft in the end.
If it involves Citigroup and Oracle, they should call it "GreedyPrix".
3 things about computers: they're alive, they're self-aware, and they hate your guts.
Hahahahahahahahahahahahahahahahahahaha....
Remind me, which company is currently turning a profit, Red Hat, or Canonical?
You are clearly not very familar with Red Hat at all so I'll let you in on a little secret. Red Hat is not making their money on desktop installs.
"linux is just DOS with a UNIX like syntax" -- Galactic Dominator (944134)
When I was at Red Hat, I assumed the scenario would be that Oracle would make a hostile takeover bid, as they are wont to do, and then IBM would come to the rescue with a competing offer that wouldn't gut the soul of the company quite as badly. Now that IBM is in talks with Sun, that seems less likely, unless the IBM/Sun deal falls through, in which case it's a no-brainer for IBM.
Failing that, the next best candidate, in terms of the good of the community, would be Intel. I mean no disrespect to AMD in this regard, because it's not really about hardware, but rather Intel's role as a technology mutual fund that happens to have CPU, chipset, and networking hardware in its portfolio. Adding a Linux vendor would further establish them as a developer of core computing technologies, in a role as a partner rather than a competitor to Oracle and IBM. Intel has a long history of working well with the open source community, which has certainly played a role in their acquisition of some top Red Hat talent over the past few years.
With all due respect to the many dedicated Linux engineers at Oracle, I don't trust Larry Ellison as far as I can throw him. Nor do I trust the Red Hat shareholders, who are overwhelmingly financial institutions on the brink of bankruptcy, to take any sort of long term view when considering competing offers, which is why I would not be shocked to see them cash out to Oracle, even knowing full well how the company would be gutted, because they so desperately need the money right now just to stay solvent. I just hope that when Oracle makes the move, which seems all but certain if the IBM/Sun deal goes through, that there's someone else around with a genuine commitment to the community and deep enough pockets to make a cash offer, since a stock deal under terms typical for large acquisitions wouldn't give the institutional shareholders the liquidity they need.
There's no failure quite as dissatisfying as a complete and total solution to the wrong problem.
The problem is that people like me install Ubuntu on thier home desktop machine. I understand apt and all of the debian specific configuration file locations.
When I go into work and have to work on the RHEL servers, I can mostly get yum and rpms to work for the server configuration that I want, but god damn if it isn't like pulling teeth.
Now that I have enough power, and I have to make a decision on which distro to get support from, do I go with something that I know (Debian/Ubuntu and Canonical?) or something that is similiar yet foreign (Redhat/RHEL)?
The last 3 servers that I've been in control of have been Ubuntu.
If Sun and IBM combined with Oracle and RedHat, that would really make a powerhouse corporation in terms of offering Linux+Java based solutions. It would probably allow for a portfolio to truly compete against MS on most fronts even. I don't necessarily like the idea myself, and am not a big fan of Java itself. But the thought is compelling.
Michael J. Ryan - tracker1.info
Citi also had the idea to push for less bank regulation and was a big player in subprime and CDOs.
How could you not take their advice?
Dual Opteron < $600
That should be made clear.
It was only a Citi analyst that raised the possibility of Red Hat being a takeover target.
I think you underestimate how involved Red Hat is paying employees to contribute significantly to project components up and down the software stack that makes up the linux ecosystem. I don't think you can really say that all Red Hat does is support stuff they don't build. Their employees are there in the trenches impacting the roadmaps of a lot of components from the kernel on up. Sure Red Hat doesn't do it all, but no one can argue that don't do their fair share of the work in upstream project development.
They succeed as a business model exactly because they can position their development involvement in upstream projects as a value proposition for customers who need critical support services.
There are always going to be complaints about support, nothing is perfect. In fact I doubt one support model fits all possible customer needs..and that's fine. The proof is in the pudding. Red Hat is consistently retaining customer subscriptions in large enough numbers to sustain their business and more importantly for the larger open ecosystem taking that financial support and using it to paying for manhours to sustain the development of open technologies across a broad front of technologies...from the kernel on up.
I have to admit i've always been at a total loss as to why redhat could have the same sort of market cap as someone like Sun (at least pre-takeover rumours).
I suppose it's certainly more profitable to take other people's work and package it up, but what does that offer to a buyer?
RedHat is the leading corporate contributor to the Linux Kernel.
What they do for the buyer is make sure that their distro will work with certain software so that ISV's can certify the platform.
For example... You want to run SAP CRM. Maybe you can get it to work on Debian or Ubuntu, but SAP won't support it, and you likely need SAP support. They have certified it to run on RedHat Enterprise Linux so you can use that.
That's what most people care about. ISV support. If all you're doing is running a LAMP stack, then you probably don't care and will run CentOS, Debian, Ubuntu Server, etc. In fact, I believe a lot of hosting companies have been switching to CentOS ever since RedHat no longer provided a free version other than fedora.
They also have other products that run on RHEL.
Dual Opteron < $600
Larry Ellison and Oracle are beginning to lust heavily over Red Hat...I fear most of the best parts of RH would get lost in the catacombs of Oracle and never see the light of day again... Sun seems to be busy playing coquette to IBM (although HP would be a better fit). Novell would be a logical choice and would (finally) promote some consolidation in the Linux realm. Apple already has an OS based on a (flamebait acknowledged) superior Unix derivative. I would instead look to Cisco or Dell. Cisco has no in-house OS (other than IOS of course) and with their recent entry into the server hardware market it would be a smart buy, although not necessarily for RH. Dell would be an ideal combination, as Michael Dell is already a Linux proponent, although of a slightly different flavor. Dell isn't as integrated as their main competitors and has no real software presence, however their close association with Redmond might be a giant monkey wrench. If Dell wanted to grow up and really play with the big boys (the ones who are left anyway), they would grow a pair and go bold. Who else has $4-6 Billion in cash lying around looking for more software presence...Adobe? Google?
Nothing to see here but us trolls...move along...
IBM doesn't support Debian-based distros on their servers.
Every version of Red Hat is LTS, not just every other like with Ubuntu.
Red Hat owns and has tons of expertise in JBoss, which is a benefit in the enterprise.
Red Hat support IBM Power chips, Intel Itanium2 and IBM Mainframes, though Ubuntu supports Sparc. Those SunFires tempt me...
Last year I finished a gig at a telco that deployed over 9,000 IBM Blade Servers all running Red Hat.
It works both ways. I cut my teeth on Red Hat, so RPM is second nature to me while Debian's dpkg and apt took some fumbling. I have Ubuntu-EEE at home but run either CentOS or RHEL on servers.
Learning HOW to think is more important than learning WHAT to think.
1) Assuming by buyer you mean "end consumer":
Nobody asks, when they buy a copy of a board game, who invented the game or who made this copy. They worry about price, and how much enjoyment they will get out of it, and such. If they like chess more than Risk, they'll buy chess, even though nobody has a copyright on it. If you point out they could make their own chess set instead of buying one, they'll point out that they'd rather buy one than spend the time and effort, thanks. If they'd rather spend the time and effort, they'd have already started making their own.
So, go ask the buyers of Red Hat product what value they're getting. Buyers don't generally give a damn who did the work, as long as they're getting something they value for their money.
2) Assuming by "buyer" you mean "stock purchaser":
The reason for business is to make money, not to own technology. Since the buyer of the stock is interested in making money, he buys stock in companies that make money, and doesn't in companies that don't. He only cares about a company having unique technology insofar as the unique technology allows the company to make money. The same applies to every other feature of the company.
The reason to buy Red Hat, then, is that you expect Red Hat to make lots of money. The reason to not buy Sun is that you expect Sun will not. This applies whether you're buying just one share, or buying the whole company.
Very, very occasionally, a company with marketable technology will have utterly miserable, incompetent management. In those cases, there may be a realizable profit if you buy the mismanaged company or their technology and put new, competent people in charge. In general, this very rarely happens. Like pretty much anything, quality of management follows a bell-curve distribution, and you'll usually swap managers in the middle of the curve with experience for new managers in the middle of the curve who then have to learn new stuff.
It's even easier not post at all, here's your answer "it's open source, fix it yourself" :) But seriously, licensing costs are lumped into the total cost and no one cares how the software's developed. Companies pay for support, quality, and brand reputation. Red Hat has been able to compete in all three areas.
If RH produces their product for less than Microsoft they have a competitive advantage. It's not just Windows vs Linux, JBOSS is also doing well against IBM MQ.
It's not just Solaris.
According to this, in 2006, sun was the leading corporate contributor to open source projects that were in the Debian distro.
Here's another look at Sun's open source contributions.
Dual Opteron < $600
there is another reason to buy a company... if it's eating into your own market then you buy it so you can shut it down and strip out anything worth keeping thus preserving your own market.
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
I have to admit i've always been at a total loss as to why redhat could have the same sort of market cap as someone like Sun (at least pre-takeover rumours).
Ahahaha, RedHat has been ridiculously priced from day 1, but this guy is a 'troll' for asking a perfectly reasonable question.
To answer, Linux is perceived as a growth market, and Intel and others have invested a ton of money in RedHat to insure that they are in a strategically dominant position in the Linux ecosystem. There is only one organization that can coordinate changes on every level of the Linux stack, and that's RedHat.
However the actual value of that position in terms of revenue is still an open question.
Business. Numbers. Money. People. Computer World.
People like me install Fedora on their home desktop machine. I understand rpm/yum and all of the Red Hat specific configuration file locations. When I work on the Debian/Ubuntu servers, I can mostly get apt and dpks to work for the server configuration that I want, but science damn if it isn't like pulling teeth. Now that I have enough power, and I have to make a decision on which distro to get support from, do I go with something that I know (Centos and Red Hat) or something that is similiar yet foreign (Debian/Ubuntu)? The last 3 servers that I've been in control of have been ESX with CentOS VM's. Wow .... does that mean Debian and Canonical are dead-ends ?
in TFA there is no mention of Citigroup looking to buy Redhat; just a mention that a Citigroup stock analyst upgraded his target share price to $17 and kept the recommendation to "hold". ./ has gone and commented on how Oracle culture would be compared to Citigroup's whereas that's not even the point..
Once again everybody on
Sheesh people, the linked article is probably under 250 words. Could you not have given it a read? Did it not strike you as something strange that a bank would want to buy a software vendor?
Artificial intelligence is no match for natural stupidity
Would you ask the troll if it would like a dessort, or perhaps some coffee?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Big companies stagnate easily. I wouldn't want them to fall into that trap.
This Slashdot story was posted by a Slashdot editor who calls himself "Souls kill". The story was suggested to Slashdot by someone who calls himself "Head Dunce". A dunce is "a person regarded as stupid". (Please note, I'm not suggesting that the Slashdot editor "kills souls", he is suggesting that. I'm not calling the person who wrote the story a dunce, he is calling himself that.)
The Slashdot story links to an article in Forbes Magazine. Will Forbes and other "financial" publications continue to pretend to offer useful financial advice when they did NOTHING to stop the corruption of big U.S. banks taking on debt 20 to 60 times their assets?
The Forbes article was written by someone named "Ruthie".
The "takeover" talk appears to be completely fraud, in my opinion:
1) Citigroup is not thinking of buying Red Hat. Yes, the Slashdot story suggests that, but the stories to which Slashdot links don't suggest that.
2) Citigroup has been extraordinarily destructive; it helped cause the present job loss throughout the United States. The article implies that Citigroup has a lot of Red Hat stock and is trying to manipulate the price.
3) The Slashdot story links to a Reuters story that says, "Linux software maker Red Hat Inc (RHT.N) reported profit ahead of Street projections on Wednesday , helped by cost cuts and a stock buyback, sending shares up 8 percent." Someone is apparently manipulating the price of Red Hat stock, because "22 cents vs Street view 20 cents" is certainly not news that should cause people to value Red Hat stock so highly that the shares go up 8 per cent.
4) The Reuters story only says that some un-named people on "the Street" predicted something, and Red Hat did a tiny bit better. Remember that "the Street" is responsible for the present job loss throughout the United States. They are, in my opinion, vicious crooks, who stole from and are stealing from the taxpayers because corrupt politicians believe they are "too big to fail".
If you aren't a full time stock investor with plenty of inside information, you should not be buying stocks. Those with little experience just lost 40% of their money!
We deserve better leaders than "Souls kill", "Head Dunce", Forbes, Ruthie, Citigroup, "the Street", and politicians manipulated by those who don't know any better way to make money than by paying to corrupt their own government.
The most important of the above is the RH staff. If citigroup/... were to buy RH and do the ''wrong'' things the staff would simply decamp, create another company ('BlueBoot'), take a copy of all the source code (its all GPL remember) and the RH customers would follow the staff for their support.
Any clueful potential purchaser would realise the risk that what they bought could just evaporate.
The parent Slashdot comment was posted by someone who calls themselves FuturePower (R), with the parenthesized 'R' suggesting a registered trademark.
So the comment author is a person who believes that a name chosen for a technology forum is a potential basis for self promotion and gain through civil lawsuits and has therefore allied themselves with the likes of the RIAA and MPIAA. That tends in the direction of causing me to have less confidence in her judgement.
Agreed! I fondly remember reading Alan Cox's blog in the 90s about his Linux work while on RH's payroll. He was fixing hard, non-sexy things.
Cheers Alan!
Cant afford to!
Next....
NO SIG
Shutting down red hat wouldn't work. The developers would just start a "Blue Hat" company and start building a distribution called "sombrero".
signatures pending - ansa@kos.to - (dont mail there)
Your post was stupid. That tends in the direction of causing me to have less confidence in your judgment.
Not really. Moving from distro to distro really isn't that that hard. Ubuntu is really nice and Ubuntu server is gaining a lot of traction.
Red Hat is still very popular. If you want a JOB now I suggest that you install and learn Centos. While your at it learn Ubuntu as well.
The more you learn the better. Goodness knows we don't want to be like the people that think Mac OSX sucks just because it isn't Windows. Or that where so sure that Vista would rock.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Actually, Red Hat is the company working most actively on the Linux kernel. Source (scroll down to the "Who is Sponsoring the Work" paragraph).
Want to hear the voice of GOD? cat