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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?"
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.
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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...
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