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Red Hat IPO Rumors on news.com
fruviad sent us a link to a story over at news.com talking about
Red Hat's New COO
that will be starting Monday, and talks about unconfirmed IPO
rumors for what they call the "Darling of the Linux world".
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I just don't think redhat can succeed as a
publicly traded company. What is in the best
interest of the shareholders is definately not
in the best interest of the free software
community. Can you say "SELL OUT"
seems to be missing from their site.
You used to be able to download the latest system software (now MacOS) from apple's ftp site for free including foreign language OS versions. THis was cool. Shareholders made Apple stop this after System 6.0.8.
IPO = Initial Public Offering
Frankly, I have heard a LOT about how Redhat is run by a bunch of self-important jerks who want to take over the Linux market.
My next installation is Debian for sure.
Though, hiring the help "folks" at RH could be called "charity".
I want in on this thing! RH is going to the moon and I want 200 shares of Neil Armstrong!
With how many of us there are, and on average we make pretty good money, it seems to me we could (as a group) own a significant chunk of them.
> Tonight on the way home, I'll stop by the
> supermarket and buy some milk, bread, and a
> bottle of cheap whisky. None of these made by
> the supermarket. I guess they're "profiting from
> other people's work."
You utter moron!!!!. The supermarket paid the
milk producer, the bread maker and the cheap
whiskey distiller for their products. Do you
see Redhat paying Apache developers or Wine or
other developers?. The only developers that
Redhat's paying are the GNOME developers - it's
like the Supermarket's selling its own brand!
If they buy RedHat stocks, the likelyhood that they find that the business model has merits is rather high, at least for major investors who actually care about doing some research before investing, instead of gambling.
I doubt they've sold out much yet too... My guess is that RedHat has gone a round and said "Here, you can buy a few stocks, and let us send out a press release, and then we'll remember you when we decide it's time to do a secondary offering or an IPO".
If the amounts of money involved had been big, they would have disclosed it.
while the haven't turned a significant profit yet, the thing about Yahoo!, Amazon, etc. is that they eventually will, and when they do, it will be substantial. people invest in Amazon because they know that the internet and e-commerece is part of the future and that when the future comes, Amazon will be a huge player in it. so they may not make money not, but as soon as e-commerce becomes normal, Amazon will be raking it in.
did that make sense?
Why shouldn't they be a publicly owned company? Hell, they're selling publicly owned software!
With the growth they've been experiencing, they can also provide the vision by pointing to their rapid growth - in the few years they've existed, they've grown (in a market that barely existed a couple of years ago) from nothing, and to a company that may end up with higher revenues than SCO this year (and SCO is what? 20 years old?)
They won't be valued like Yahoo. But on the other hand, their revenues aren't vapor and dreams of what may come in the future, like it is with Yahoo: RedHat is making money now, and they're experiencing a solid year to year growth in revenue in a market that's exploding.
I am sure you are not. But can you see micro$oft buying them out? :-)
Being publicly traded only means that the stock is available for sale on a stock exchange, which means that at least a certain percentage of the shares are available to the general public (for a price, of course ;). How big that percentage is depends entirely on the stock exchange.
That a company is publicly traded does NOT mean that the original owners automatically loose control.
Remember that only a very small percentage of inverstors actually excercize their right to vote.
So in many cases, owning 20-30 percent may be enough to effectively control a company.
The group around Bill Gates still control Microsoft tightly, for instance, even though Gates is far away from owning a majority of Microsoft shares (I think he owns somewhere around 20%-25%, but don't quote me on that ;)
Anyway, the only "independence" the current RedHat management has comes from the fact that some of them together still control the majority of the company.
That doesn't necessarily change with an IPO.
Some dork spouted:
"The only developers that Redhat's paying are the GNOME developers".
tee hee, how can such ignorance survive in our internet connected society?
Red Hat is supporting a number of Linux developers, maybe you've heard of some of them? Just off the top of my head:
Alan Cox, kernel hacker
Steven Tweedie, kernel hacker
Dave Miller, kernel hacker
Every Linux user benefits from the work these Red Hat employees are doing - whether they use Slackware, Debian, Caldera, SuSE, TurboLinux, or whatever - Red Hat is giving it's work to the entire Linux community.
If you have a problem with that, whyt not tell us what YOU'VE done for the Linux community lately?
We're talking about Apache, GIMP, Wine....do you
see Alan/David/Stephen's name on these packages?
I don't care if Redhat sells the Linux kernel
(the parts that they paid developers for) and
GNOME, but to usurp someone else's work and
package it without paying the developer a dime
is simply "leeching" as Hon. Torvalds put it!.
Sure we cannot change the situation, but there's
got to be some incentive for developers to keep
developing. It's like the big bad boy taking your
lunch money. I'm sure that even if Redhat didn't
bundle Apache/GIMP/Wine, these projects would have
still survived and become famous even if they are
restricted to a WWW distribution.
Heck, GIMP was famous before you ever saw an RPM,
X11amp was famous before you saw an RPM. So to
tell me that Redhat is goody-two-shoes is all
bogus.
Mr. Rob Young was a "computer leasing" dealer!.
That's right up there with a Used car dealer.
I'm right now in school and in due time, I'll be
making my contributions. But I want to contribute
IF AND ONLY IF everybody gets to share the wealth.
If they do go IPO, Red Hat shouldn't give out more than 49% of the company.
Then again, it'd be a big fight over which company gets to buy Red Hat and possibly control Linux's future.
Trying to own Linux is like trying to pick up a bowl of jello without the bowl. It slips through your fingers. The harder you squeeze, the faster it ozzes out of your control.
However, owning Red Hat could stall the growth of Linux for a while. If used carefully, it could help direct people towards certain products that Linux works with or runs on Linux. Microsoft knows how to play this game -- they play it very well.
The moment they released their code under GPL they agreed to everything in GPL including the GPL given right of others to sell the code for profit. It's like musicians who signed the IP rights of all their music over to the RIAA and are now starving. They deserve no sympathy, and RIAA can keep all the money.
The moral: If you don't want others to profit from your work, don't give away your code under GPL (or BSD, etc.)
Apparently, they didn't want to be influenced by stockholders demands for profit or whatever.
I think they'll do best as a private company.
> All the projects you name are Free Software.
> Why shouldn't RedHat dist them on their CD?
> Hell, if nothing else, there's the minor
> little fact that the devlopers of those
> packages didn't ask for any money.
Well sir, do you think if the developers asked
for money they would have been able to get a
plug nickel from Redhat?. Redhat would have said
"you're loss, you OSS/GPL'ed it, so I'm free to
leech it off your website and put it on my $50
cd".
It's one thing to have even the decency to offer
to support these projects - after all $50M goes
a long way these days. Nah, but Redhat had to
go and line their pockets and hire High Priced
COOs, CFOs, VPs to float an IPO!.
> But all this is beside the point. Free Software
> has precious little to do with selling or
> buying...it has everything to do with :
> FREEDOM
Oh, so now it's down to Free Beer!. Freedom
my ass!. This is nothing but get rich on other
people's hardwork. Damn right!. Freedom to make
money off SAMBA/GIMP/APACHE/etc while these poor
slobs have to bust their humps a day job trying
to fix an NT workstation or some mundane job.
Don't you think that the programmers would like
to buy nice things, eat at fancy restraunts and
buy shiny new PCs? or take their babes out on
Saturday night? We are all human, yes, RMS
does it for the glory, but 99% of us are in for
the payoff. A lot of the developers are doing
GPL'ed/OpenSource projects to improve their
chances of landing the high paying job!. Linus
got a high paying job at Transmeta, he didn't
stick around at Univ. of Helsinki for a low
paying job doing Linux.
The true heros of Linux are Mandrake, Debian,
Stampede.....these guys are doing it for the love.
They are doing the RIGHT THING!.
You're waaay off base here. The point is
that in an open source commnunity, everybody
shares in the profits (and losses). Developers
remain productive if enough consumers pay a
token fee (a donation, if you will!). John Carmack
donated 100K to FSF for their GCC compiler that
helped him write Doom/Quake, when did Redhat pay
FSF or GIMP or Apache?.
I would just say that if Redhat goes IPO, they
should give shares to the developers of these
projects - like a thank you. Then see all these
apps take off and kick ass.
Sorry, but RH aint worth $1B. Support companies don't have a high perceived value. (Since Internet companies generally have a much higher perceived value rather than value in terms of sales and assets, I'll deal with that here).
At this point in the game, RH isn't really a support company, but for the long-term that will be their goal.
Let's look at a valuation here: first, RedHat has minimal assets. Second, they have minimal income. Who would want to acquire Redhat like that?
The only reason someone would acquire them would be for the marketing and publicity of funding the development or distribution of an open-source system. And if it's driven by marketing and publicity rather than codeheads, aren't we collectively losing something?
Logical my dear Watson,
Redhat is bought, new owner wants big ROI - Gnome is only really now getting going as compared to the much better KDE (Caldera, Mandrake, YellowDog, SuSE distributions all feature KDE as default choice). Why carry on acting as a crutch for Gnome when KDE is already wupping its ass in terms of being "out there" and in features and stability - No reason but for ideological ones and that carries no meaning on Wall Street.
It may not be a bad thing if RedHat can get Linux in front of the corporate suits (strange, theres a nasty taste in my mouth suddenly) and act as a ice breaker. The other distributions can follow seeking niches and acting as competition. Unfortunely this industry generally relies on some heavyweight to propel itself - IBM and then MS.
PS. Please spare the following arguments:
1. C better than C++
2. gtk+ freer than Qt
3. Gnome cooler than KDE
These will hold *ABSOLUTELY* no interest to a majority shareholder whose primary interest is a good dividend as a result of good profit margins.
Come on people this is just plain stupidity. Not only will Gnome die, the public acceptance of OSS will die. "Look what happened to redhat.. they were doing that opensource thing..."
generally speaking, redhat going public or whatever is just dumb... I mean, it becomes another shareholder thing "hrmm, what'll make the most money?"
goodbye free downloads of linux, goodbye source CDs, hello Solaris.
Not that Sun is bad either... but that's what redhat would become. I thought the point of this was to NOT be like them and others...
Who would buy redhat stock anyway? A bunch of media-crazed idiots. they'd screw the whole idea of open source.
Yeah, oh great. They get bought by someone, the big company gets lots of good PR, it looks real cool, the shares of the big company increase in value, the CEO makes a few million, and then the little company just vanishes... wonderful.
Come on everyone, we don't want redhat to go the way of the suits do we?
$1Bn - Maybe, Maybe not. Its a matter of how much is a company like IBM willing to pay for one the hottest technologies around. And its not just a question of assets and income - its also about marketshare and potential. That what the Internet stocks have taught us - Amazon has yet to turn a profit but they have the lions share of *BOOK SELLING* - F'Christs sakes - not sports, not porn, not... whatever... books.
Redhat is currently building a product and part of that is to provide a support structure for that product. They are being very successful and that is illustrated by the fact that Intel, Netscape, IBM and HP are dealing with them. They are almost automatically connected with linux in the stupid media and that counts.
Remember Linux is everywhere - esp. these so-called internet appliances and thats a very large market, potentially far larger than the current PC server and desktop market combined. These big companies are planning for new markets and if they see that Linux (= Redhat by prior reasoning) can help them get there faster then $1Bn now might well save them $10B down the pike.
Its all about potential these days and Redhat has plenty of that.
Business exists to make money. I don't care what kind of lofty values you may have for open source. Business decisions are based on profitability. I can see redhat going IPO and making the owners very very rich. So they go buy an island as someone suggested, and never again think about Linux or the opensource movement in general. If Redhat goes IPO, I for one say "screw them".
> First I'm supposed to feel sorry for the
> developers 'cause they don't get cash for the
> software they HAVE MADE FREE
My god!.
According to you FREE means FREE BEER (read
your statement again!). So the poor simps who
wrote the software are out of luck?. What I
would love to see is an amendment to GPL saying
that if you download my software from the web
then you have it for Free (beer) but if you
bundle it on a CD ROM (and because of this it
adds value to your CDROM then you owe me!).
You think anybody would buy a Redhat CD if Apache
or the GIMP was missing?
I'm fighting for developer's and you seem to
be fighting for Redhat!. I say fsck Redhat, there
will always be Debian to distribute the software
in the true spirit of the word FREE (speech).
Its a question that few have to answer and because greed is good, often principles get jettisoned to make way for the cash. Sorry. Anyway who needs them, maybe its best that we concentrate on the hacker distros. Lets face it, the world needs variety and linux won't die if RH sells out.
An online bookseller. I mean, who would have thought of that. They have made some people very, very wealthy.
Anyway, for all your savviness you have not forwarded one reason (plausible or not) why you would not buy any rh shares.
Methinks, a public RH would make someone a pot of money - certainly enough to "sell-out"
How much money could a Slashdot IPO/PP raise?
Signed, 73aa0641cc6924a133555792fc2af874
Amazon has yet to turn a profit.
RH is not a long-term investment.
Yes, who would have thought of an online bookseller.. that is something different and unique and has an intrinsic value. RH has nothing like that... they're taking software and putting it on CDs. There are people at the local swap meet that do that.
For support, hire a damn consultant.
I was under the impression that Tux was the darling of the Linux world.. Redhat would be more analogous to "Painted whore of the Linux world" than anything.
Basically GPL V2 but with the amendment:
(i) You can use the software FREE (free speech and
free beer) if you download it from my website or
any mirror of it.
(ii) If you add my software to your CDROM such
that it adds value to your CD distribution, then
you owe me a percentage of the money you make
selling the CD (if and only if the value of the CD
is greater than the cost of media+packaging).
The price is negotiable.
SIGNED ANONYMOUS TYCOON.
Are you daft or something?.
I was talking about GIMP, WINE and APACHE!.
These are entire packages not some patch to a
kernel or some device driver. Alan does some fine
work. I'm happy that Redhat pays him to hack on
the kernel. But I'm talking about MAJOR parts
of the OS - what good is RHLinux without Apache
or GIMP or Wine?. Who pays them?. I say redhat's
made more money off Apache/GIMP/Wine than they
have made off GNOME and some other stuff they've
been funding.
I somehow don't think that MS can be seen to be buying out rival OS' and then squashing them. Very much a red flag to the anti-trust folks in the DOJ. I mean, they used RedHat Linux as proof that the OS market is flourishing and then, 1year later they buy out the competition. Remeber monopolists aren;t allowed to operated under the same rules of competition as the rest.
Well if RedHat is going public and I am Bob Young,
I'll probably do these:
- keep 35-40% of the stock
- 5-10% for executives
- 5-10% for employees
That way the major shareholder will be OSS minded
people, RedHat get tons of money, expand the company,
more developer, better support, better documentation,
Long live Linux....
What if I want to be Ellis-D, how would I be him. >D
:)
Scaring question huh?
Uh, never mind LSD....
These are on the edge of contradictory...
These are entire packages not some patch to a kernel or some device driver.
...
But I'm talking about MAJOR parts
of the OS
I for one understand what your saying but...
what good is RHLinux without Apache
or GIMP or Wine?
Apache is for people who want to run a web page on their computer, GIMP is for people who want to manipulate images, WINE is for people who want to run windows software on linux, while chances are someone uses these, and while I have installed all of them, I don't find my self using them other then for educational purposes, and after that they are just sitting there doing nothing, I mostly do programming and they hardly fit into that, so they are not "Major parts of the OS" for me. IMO it is a mistake to make such a presumptious statement, a forgiveable and understandable mistake though, most people only think about their own usage.
Who pays them?
Should that matter? Most of how they are paid is from contributors, and user appreciation, and possibly donations. If they were concerned about pay, they would never have made it free.
Most if not all the free software developers were from people who were either experimenting with or were tired of not having something, and created it them selves, but the first thing a person notices when developing is that there is only so much you can do in so much time by your self, or with out others contributing. Contributors find bugs, extend functionality, and make your software all around better, the original programmer(s) are usually a user too, and wants/needs their software to be better.
RedHat is just using its resources to help in filling a gap in what is/was usually bad mouthed in the media about linux, the desk top. But if you notice its not a proprietary desk top owned by RedHat, like some other companies do (not refering to KDE BTW, IYKWIM), GNOME is an independent project that is also a part of the community.
Actually (ii) is an exception in (i), that is how a lawyer would do it, because seeing it the way it is now is contradictory, and confuse the poor lawyers and lamens. It should read "free except in this or that case".
:)
Its no longer free.
Here is a better example....
You can use the software FREE* (free speech and free beer).
* This only applies if downloaded and distribute using the internet.
I guess the new word is "free*".
Geez, that guy further in the thread didn't get it, if the developers wanted to charge distributors, they would have used a license that makes it so, but guess what, they didn't and guess what else it wasn't a mistake.
Good question, I have another...
If Bill Gates owned all the money in the world, wouldn't that mean we are all loning his money?
Then when we call money Bills, you would literaly mean Bill's. heheh
Redhat goes IPO, Microsoft buys all stock,
Microsoft fires all workers.. I mean that's what happened
to Netscape right? I think investor driven
companies are bad, especially now.. We can see across the board
companies that favor sensationalist and opportunistic
strategies to quality in order to get the almighty dollar..
Hell I would rather donate the money to redhat directly,
and call it a gift..
There are three reasons why GNOME can survive without Red Hat support, they are:
1. C better than C++
2. gtk+ freer than Qt
3. Gnome cooler than KDE
It's interesting, alright. For a wide variety of reasons.
BTW, we get the same stories internally about going public that everyone else gets. If an IPO is coming, the higher-ups are doing a good job of keeping us asking questions.
YaST is not free software.
The goal would not be to embrace but to destroy. But then,
SuSE would just pick up the ball where RedHat left...
C++ sucks because it has abandoned KISS principle, it's no longer simple and elegant language. I admit this is more of an opinion than a fact. But something you cannot deny is the fact that Qt does not use C++. On the other hand gtk+ does have exellent C++ wrapper.
I'm glad a real expert could come back an correct Mr. Green. Even more so, that said expert could correct him with even more vague generalizations than Mr. Green used.
what brilliance!
I heard Rob has been buying suits lately...
Well I'm a regular reader of Slashdot, but I rarely speak up. :-)
I must say however, this is very well said...
As a shareholder in many companies, there is not a chance I would invest in a company like RedHat. While it may be a very "hip" thing to do, and many people on Slashdot may go for it, it's just not a wise investment.
I've learned to predict what companies will do well and which ones won't. I'm a long-term and very experienced stock market gamer, and I totally agree with what was said here.
A while back, people were criticizing someone who made reference to "Redhat becoming another Microsoft" or something like that. Well, if they start thinking about their profitability rather than their goals in open-source and otherwise, doesn't that become true?
But the stock price may not be able to be sustained.
Just remeber, IPO != riches or success. Half of the new IPOs are trading at or below their opening price a year later.
The only people who are assured to get rich off the deal are the underwriters.
Redhat's whole business model doesn't offer shareholders any vision of future revenues. Ok, so Redhat may continue to fund and develop more and more products and better versions of Linux. But unlike MS, they can't set market prices, because anyone can distribute, and distribute for free at that. What's their spreadsheet look like?
I guess they can sell books like ORA as Linux
manuals, but it's pretty weak.
Redhat also can't claim support as a revenue leader. Support is a primarily a loss leader. Consulting? Perhaps, but Redhat would have to build up a big consulting arm ala IBM/Oracle/CA/insert random consulting company.
Consulting is highly labor intensive vs product development.
Redhat may be able to claim a per-customer valuation and "sell access" to people who have bought the Redhat CD. Redhat could also try to become a "linux portal"
They can also claim some valuation based on their "brand" .
But all of these assume Redhat is going to change its business model.
Open-Source hype alone is not going to sustain investor interest in a company which may not have any future.
It's easy for Slashdot users to go "man, OSS is wonderful. How could anyone not look at this and see it is the future. Therefore, anyone with intelligence should put their money and effort there."
Nothing is inevitable.
Tonight on the way home, I'll stop by the supermarket and buy some milk, bread, and a bottle of cheap whisky. None of these made by the supermarket. I guess they're "profiting from other people's work."
Sure.
There are other business models beside the "starving artist in the garret" or the "evil empire".
I think RedHat has a killer "supermarket" business model and has the potential to make a ton of money.
In a few years, the PHB and you, yourself, will not want to buy direct from the software developer or download the latest and greatest off the Internet -- he and you will want to buy from the RedHat or the Caldera supermarket to get the guarantee that the goods are fresh and tasty and non-poisonous and nutritious and not adulterated.
Just like you won't buy food from some guy in the alley. Drugs, maybe, but not food for the family.
And the RedHat supermarket gets to pick and choose among available products and suppliers to make that guarantee. And they'll work like hell to
package it and present it and market it to bring you in.
And they'll sell it through the local Borders Bookstore or CheapBytes, so they won't have a ton of overhead like CompUSA.
Red Hat puts money and information back into the developer space to insure a steady supply of good products and happy, well-fed developers. As they do now. All under GPL or NPL or whatever.
Win/win all the way around, in my opinion.
And if I don't like their produce department, I go down the street to the next Supermarket.
Now that's freedom.
Sign me up for a piece of the IPO.
There are loads of companies with very deep pockets who could buy a company the size of RH and not even register a dip in their quarterly earnings graph. Just think - IBM would not have to develop their own distribution - They'd get a good distro with a good customer base - and remember IBM has reasonable cachet with linux customers (certainly compared to a M$).
As a way to make a pile of money and to retire very wealthy at a relatively young age, a Redhat IPO is an excellent idea. Just think what Redhat is worth (mostly in terms of earnings potential) $100M, $1B, what - hey, Young could buy a island to retire on.
Whilst they say they are afraid of forking : the threat of forking is a good thing : whenever forking has happened in copylefted projects, it has been justified (emacs/xemacs fork, gcc/egcs fork). It means that the maintainers of the code don't start doing stupid things.
It's the right of last resort.
Wow, another lifeform that turns into stone when exposed to daylight!
Anyone with a browser knows that there have been two "obstacles" to Linux desktop domination, GUI and office applications. Red Hat have already done quite a bit to support the development of GNOME. I expect the first thing they'd do with with their new capital would be to put more resources into polishing up GNOME and development on the GNOME office applications. They'd have to do this in order to compete with the Corel Linux distro, which will eventually include KDE (a bit more mature than GNOME) and the Corel Suite port.
slashdot broke my sig
Check again. It's there now.
A coworker of mine is going to work for a company down in Santa Monica called Direct Stock Marketing, that intend to set up an online stock exchange that would be used for things like IPOs and private placements. Seems to me to be the next logical extension of the online investing trend. Check 'em out. (End of free plug to help out a friend :-) )
Eric
--
Be who you are...and be it in style!
Okay, this has been bugging me for some time now. What the heck does IPO stand for? All of a sudden I seem to be seeing it all over the place, and everybody seems to assume that everybody else knows what it means :-/.
Come on, only computer are supposed to have mysterious acronyms and abbreviations!
\\'
Yahoo is only as big as it is becuase of hype; underneath that, it's mostly fluff.. At least the cable companies have infrastructure that has real value...
I'm sure Bob Young will change his mind after enough armored trucks park outside of Red Hat HQ.
There would be nothing to stop someone from mounting the Red Hat CDs on an FTP server (remember the GPL?)
I wonder...how much is Red Hat worth? How will they determine its value? (I'm guessing they'll add up all the support contracts, etc. rather than look at software side of things). Despite what one poster stated, I think that's how Red Hat will make money (or at least break even...has Yahoo turned a profit yet?)
Just clone the installer (RPM *is* under the GPL).
Does Mandrake use the Red Hat installer?
Obviously you are not an accounting geek. It's been years since I studied accounting (late 80's), but I do remember that there are tons of acronyms used for all sorts of seemingly trivial things. (One which computer geeks might recognize is LIFO vs. FIFO valuation of inventory, which is very important for detirmining gross margin but which also has cash flow complications which can bite you if you don't watch out, and that line of thought leads to a number of other acronyms by folks who actually listened in their Finance 101 course!).
Send mail here if you want to reach me.
Red Hat *IS* expanding into new lines of business -- the Linux support business. They have made a start, but creating the kind of support organization that the Fortune 500 wants and expects for its enterprise-class operating systems takes money. A *LOT* of money. When a company needs to add capacity to their payroll system they want a support engineer from the OS vendor on site to help them plan and execute the move. Calling Red Hat Support down in North Carolina just won't cut it for enterprise-class systems.
There are other things I would say here, but I really can't at the moment. Just try to think how IBM retains the loyalty of their mainframe customers, and what a Linux-oriented company would have to do in order to get that same level of loyalty out of their customers.
-- Eric
Send mail here if you want to reach me.
Note that Bob Young may be annoyed, but not necessarily truthful. He may have answered the question like that because he was thinking "Duh, stupid, if I told you the REAL answer then I'd be in trouble with the FTC!".
The Feds have very strict rules about IPO's, and if you don't follow them exactly, you get hit with a big stick.
-E
Send mail here if you want to reach me.
My comment was as an outsider looking at Red Hat snapping up all of these executives who are experienced at taking companies through the IPO stage.
Frankly, there was probably a half dozen other people thinking the same thing the moment they saw who Red Hat's latest aquisition was.
I have no inside knowledge of Red Hat and whether or not they are planning an IPO anytime soon. I don't think they have their ducks in a row yet for an IPO at the moment, but they may within six months. From what little I know of Red Hat Corporate, they are having difficulties dealing with their growth, and these new aquisitions may simply be Bob bringing on board people who know how to manage a company that's as big as Red Hat (Bob is a VERY bright guy, but somewhat 'scatterbrained' as we put it down here in North Carolina, i.e., not the kind of detail-minded person needed to do the actual day to day business of managing a company that's gotten as big as Red Hat).
On the other hand, no matter how much the people at Red Hat deny it, the IPO *will* come. Very few startups can make the investments needed to create a major corporation without massive amounts of venture capital money (which comes with IPO strings attached). If Red Hat wants to create a professional support organization with outside reps and etc., like is needed if Linux is going to attack the enterprise, they're going to need money. A *LOT* of money.
I think many people in the Linux community don't realize just what kind of support the Fortune 500 demands and expects for their enterprise systems. Red Hat's telephone support is a start, but many of the very largest companies expect someone to come ON SITE to fix things -- immediately, if not sooner. We in the Linux community have come a long way. But this war is not over, and there are still many battles to be fought -- and most of those battles take money. Lots of money. IPO-type money, eventually, because if you get enough money out of venture capitalists to make it happen, they will demand IPO sooner or later.
-- Eric
Send mail here if you want to reach me.
I agree with your assessment of where Red Hat is, at this particular time. Bob Young is brilliant, but he is not a manager. Luckily it appears that he is getting the kind of management help he needs to turn Red Hat into the kind of company that he wants. (I'm not forgetting Marc Ewing in all of this, BTW, but Marc has always been more comfortable with the technical side of things and left the business side to Bob).
The "suits" can destroy a startup if they're not careful. But I'm betting on Bob and Marc and Donny and Erik and etc. keeping these managers on track so that they can create a corporate structure without destroying what makes Red Hat special.
Send mail here if you want to reach me.
If/when it does happen I'll bet we'll see the ultimate slashdot effect!
Seeing how insane IPOs like Netscape, Amazon.com, Yahoo, etc. were, I almost cringe to think about Redhat's!
I know if I had some money I'd throw some their way... and I suspect I'm not the only slashdotter who feels that way (grin).
If you thought Rasterman was eccentric and bizzare before wait until he's a paper millionaire! (wink).
Hmmm I suppose that also applies to Alan Cox. Should be interesting to see what nifty toys he gets to further his hacking "career".
The more you know, the less you understand.
But... RedHat already has commercial investors that in turn have their investors. At this point in the game, I think most investors involved are knowledgeable about the alternative to a level playing field in the OS game. Extinction! They are investing in something that is a real or potential benefit to their continued survival.
Going "Public", on the other hand, is a different animal altogether. The positive aspects of which would be pubilc involvement in the free and open source community, the availability of an investment point for those interested in Linux's continued growth and their own personal profit, the influx of cash that could provide a boost to R&D, the increased competition to provide for better and more widespread services for Linux customers. The negative aspects could be the alteration of the decision making process as others have pointed out and the proprietization of certain components of commercial distributions - however, in well run companies, a market analysis is done to determine the customer makeup - and if RedHat's customers are expecting adhereance to free and open software standards then that is *HOPEFULLY* what the CEO will ensure.
Microsoft used to have a very large - very technical userbase. To a degree, they still have a goodly mindshare but only because of the profit motive. Many of the technical protagonists that Microsoft used to depend on as customers have literally *Migrated* to Linux and become antagonists. Is such a migration something that a profit minded RedHat is willing to endure? Who knows?
On the flip side, look at Caldera. For the longest time, they have been marketing to the business crowd and succeeding on a moderate scale; now they are targeting a different market segment with their newest release - newbies. They may lose some technical users but gain many non-technical ones. They are a corporation that is looking for profit!
Money for Linux can't be a bad thing... It may change the goals of some companies but as long as they sell a product based on GPL work, it can't be all bad. The whole community benefits from modifications they make that in turn get used by other corporations who make modifications that in turn get released to the community and so on ad-infinitum. The best possible benefit *I* can see is corporate sponsorship of Free Software/Open Source projects and additional hiring of programmers to work on such projects. I consider getting paid to work on Open Source projects to be a kind of sponsorship; creating more time for Open Source work - accelerating the process.
Codifex Maximus ~ In search of... a shorter sig.
Posted by eafarris:
hmmm... i wonder how much cash Microsoft's Own Bill Gates has stashed away just for this moment, even if it is a rumor.
Posted by your preferred nick name here::
... oh, wait they don't have any other competitors.
I don't think MS can buy a majority of RH. Since they are in the same business (Operating systems) the DOJ would have to approve the purchase...and I don't believe thats going to happen.
It would be like MS trying to buy out Be or Apple or
Posted by IonBeam:
The companies who invested in Red Hat are there primarily for profit. Keeping a company private doesn't do much to the share price. You have to go public. Unfortunately, Red hat will probably go to a traditional underwriter (unlike "www.openipo.com") to sell the shares, and the ones that will make the most money are the ones that already have shares in the company. It can seem unfair, but these same big investors support unpopular companies, too, so they have to make a profit somewhere.
Red Hat will probably grow in the service business, where the money is. They can still provide software for free (they don't have the choice anyway) AND make the investors happy. In fact, it's a good thing to give away software, since big corporate companies will install it everywhere and ask for support. As long as they make clear to investors what is their business model, the investors won't complain. Both can coexist peacefully.
Posted by IonBeam:
I don't think Red Hat is a big part of IBM strategic plans, either. Red Hat is just so tiny compared to IBM. Hey, if a big company like IBM decides it wants to provide support for Linux, I don't think they need a little company like that. They just want to make some money out of it. And yes, one-time gains are taken into account by analysts for short-term previsions. Remember that it's with cents that you make dollars! Intel often does that. They invest in small companies for a year or two and sell them for a profit. Sure, they invest in companies that could help sell their own products, but it's primarily for profit-taking.
Posted by Dean Townsley:
Personally, if Red Hat goes public I will almost surely not buy another of their distributions and I will most likely switch to Debian as quickly as possible. One of the main reasons I like Red Hat is because they are private, which means that their policies (which I have liked up to present) are likely to stay in place.
In the current stock market (especially as overvalued as tech stocks are) it is very hard to demonstrate that the motivation for going public is anything other than to get rich quick. I think staying private this long, probably under enormous pressure, says a lot good about Red Hat. I think to give it up now would be the wrong thing to do. Hopefully this is just a rumor.
Just my opinion, and I will vote with my dollars.
>We're talking about Apache, GIMP, Wine....
No we're not, you said Red Hat only paid GNOME developers. Having been shown to be wrong, the polite thing to do would be to admit it.
>simply "leeching" as Hon. Torvalds put it!
Care to quote him? Linus *wants* Linux to spread, and Red Hat is helping to do that. Heck, it pays his "Lieutenant" Cox.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Good point. I don't think that many investors would see the value of the Open Source development model, and it wouldn't be long before there was a lot of grumbling about "why are we giving all this away?". Linux will obviously remain Open Source, but Red Hat's substantial contributions to the Free Software community could dry up pretty quickly under shareholder pressure.
TedC
All a lot of people need is a buy recommendation from a broker or publication, and that's primarily based on the performance of the stock.
Most people invest to make money -- ideology has very little to do with it. I'd buy MS stock if I thought it had a future...
TedC
Red Hat has been doing okay, IMHO. I'll buy their distro to support the effort they are making for the Linux community. If they go IPO, I suspect it will be with the same planning they've done up to this point. They do have a potential for earnings, and that's what's driving up some of the hot 'net stocks right now. If/when they do go IPO, I hope I have some cash to throw into the pot. RH must be a very interesting place to be working right now :)
"shop smart:shop s-mart" ash
If you actually think that Yahoo!, Amazon, etc. is going to make a single dime in terms of REAL MONEY, you're a bigger fool than you look. It's not in their interests to actually make money/turn a profit. Watch out for some pretty creative book keeping from a lot of these highly-hyped "Internet-Focused Companies"
Gee Whiz. A so-called expert who doesn't have a clue to what's going on with something,but thinks he knows anyway. Boy do I feel sorry for the people who are actually stupid enough to listen to people like you. The fact is that while certain people may "scream" for IPO as you put it doesn't mean the folks at RedHat will listen to them. The people investing in RedHat know far better than anyone else know the grief involved with IPO's these days far exceed any benefits. Just look at what happened to the sucessful privately held companies that literly went down the tubes because of IPO's.
You aren't fighting for developers. You're fighting for the developers of Windows-style crippled shareware which is dead as a doornail in the linux universe because linux users pretty much want nothing to do with it. Don't confuse Debian with the vermin who sell windows shareware cd roms. Debian and those guys have nothing in common.
Prior to going public, Yahoo certainly didn't have a commercial focus. It certainly does now. When you do a search for cars it puts up ads about cars. I'm finding it difficult to think of an exact parallel for Red Hat there, but I wouldn't want that level of commercialisation for RH Linux.
Matt. Want XML + Apache + Stylesheets? Get AxKit.
Did the rumor start from your posting to Linuxtoday?
Free Software: the software by the people, of the people and for the people. Develop! Share! Enhance! Enjoy!
Damn! You you just don't get it, do you?
RedHat isn't forcing anyone to shell out $50 for their boxed set. They provide the distro on their mirror network. CheapBytes sells it for $1.99 for that matter.
Again, it doesn't bloody matter about the sales. The can afford to fund GNOME and contract with Alan because people want to buy their product. That's called a free market system. When you get out of school and into the big blue room you'll learn all about the free market system.
As for Linus...last I checked he seemed to be finding time to tinker with Linux a bit...and I thank him for it
Bottom line is that you are either a pathetic troll, and I should be ashamed for bothering to answer you, or you are a whiny little kid who doesn't get it yet. Your can't even keep your arguments consistant. First I'm supposed to feel sorry for the developers 'cause they don't get cash for the software they HAVE MADE FREE Then the right thing is to do this whole thing for the love. Which is it?
Then there's your bit about "A lot of the developers are doing GPL'ed/OpenSource projects to improve their chances of landing the high paying job!" So is that good or bad? You can't seem to make up your tiny little mind. If it's good, then RedHat is doing them a service by helping to get their code out there so they can gain a rep and get those big bucks. If it's bad, then what's your bitch?
Finally, did it occur to you that Mandrake is fscking based on RedHat? In fact, tho I certainly have nothing against them for it, Mandrake is basically RedHat+KDE (ok...a bit more, but only a bit).
I can't believe I just spent this time responding to you instead of driving home to be with my S.O. Grow up...or at least get your story straight...
--
"First they ignore you.
Then they laugh at you.
Then they fight you.
Um...no.
The Free Software (or Open Source, if you prefer) community shares the code. They share the knowledge. They share their hacks.
Developers remain productive if they want to.
I applaud Carmak for the donation. But I don't see how he was morally obligated to do it. And given how much RedHat has given (and is giving) to the Free Software community, I think whatever loony karmic balance you seem to postulate is in equilibrium for RH.
Quitcherbitchin unless you can come up with a more coherent line of BS. At least that would be entertaining.
--
"First they ignore you.
Then they laugh at you.
Then they fight you.
Do you have to work hard to be this ignorant, or does it just come naturally? All the projects you name are Free Software. Why shouldn't RedHat dist them on their CD? Hell, if nothing else, there's the minor little fact that the devlopers of those packages didn't ask for any money.
But all this is beside the point. Free Software has precious little to do with selling or buying...it has everything to do with :
- FREEDOM
And the really cool thing is, RedHat gets that! They give all their code back to the community. You can still dload the whole distro from their website (modulo their bandwidth problems & mirror setup). You can still buy their distro from CheapBytes if you want. Most importantly, you can still hack their code & dist it out with your changes under the GPL.Why the fsck does everyone have such a hard time with the idea that a company can be both moral and successfull? As Don, Joe and the boys said:
--
"First they ignore you.
Then they laugh at you.
Then they fight you.
Keep in mind a good point that JWZ mentioned in http://www.jwz.org/gruntle/aol.html :
If Red Hat goes public, things might not change for the better.Just something to think about...
Just wondering.. I've used Redhat 5.1/5.2...
Did I miss the section of the CD-ROM where they include wine? I personally didn't see it anywhere on the cd, and I went to download it myself.
And beyond that. Gimp is included in EVERY Linux distrubution that I know about. Why do you only have a problem with Redhat? The other companies/groups sell their distribution too you know (besides Debian, and I'm not sure about slackware).
None of the Linux developers seem to have problems with this, so why are you fighting a crusade for them?
Unfortunately individual share holders opinions are meaningless. Huge chunks of stocks are bought up by funds etc. and they generally have the biggest stick when dealing with the board of directors. That said it isn't a forgone conclusion that things will go awry at the whims of shareholders. I'm sure many of the big shareholders of Apple have told them to dump MacOS/MacOS X Server, go Intel and sell Windows boxes, obviously it hasn't worked.
As long as the board of directors is supportive of the direction of the company there won't be any 180 degree phase shifts, regardless of the opinions of even the major shareholders.
Of course it hasn't been officially announced that Red Hat is going public.
I can't believe all the people here who suggest that Redhat won't be able to turn a profit because they're selling a product that's free ...
... and Redhat does have overhead to cover ... but the point is that the business model is already working. The only question is, do the founders need to share it with everyone else. Given the investments they have from Intel, and everyone elses brother, I'm not sure I know what their justification for it would be. But damn, I'll be first in line for that action when it opens up. Pure genius.
Hello!!! They're already doing it! They're selling at $50 a pop, something that essentially shouldn't cost them more than the media its burned on. That's $49 of pure profit, baby. I want a piece of that action.
In fact, Redhat better hurry themselves up. I'm on my way to Fry's right now to pick up some bulk CDRs, and I'm going public on Monday!!!
David
P.S. I know I'm simplifying things here
Share data. Share code. Share ideas. Share the wealth.
http://stockfilter.org
If I was Redhat, I wouldn't do it. Publicly traded companies have to answer to Wall Street Analysts, who "represent" the interests of shareholders. In the past, economists would complain about the short horizen Wall Street forces on American business. In the over-hyped Internet market, that horizon has shruken to hours. Not a good way to run a business for the long term.
/. being a great example (IW called it a portal :)). And of course, the free software ideals Netscape ripped off, live and thrive on.
None, and I mean none, of the Internet companies have yet proven that they are viable for the long term (AOL beig perhaps an exception, but AOL was never really an Internet company). The biggest ones - Yahoo, Amazon, et al are rolling up smaller companies in a desparate attempt to ensure that some thing, anything, will help them be here tomorrow. The Jury is still out. (NB: nearly sll of Yahoo's ad revenues come from IPO money from other Internet companies; Amazon loses $7 for every book it sells, and there is no let up in site: are these businesses that have a future?).
Of course, I am not the CEO of Redhat. So its his decision to make. He and his company are the only ones to be affected.
What about the community? Yahoo and Netscape are great examples. Once they went public, they totally lost touch with the community values that got them off the ground in the first place. Does that make a difference? Not at all. There are many places on the Internet where the community values of the "early days" still thrive, despite Yahoo,
So Redhat will become a sell out if it IPOs. It's inevitable. It's owners may or not become rich. Big deal. I wish them well if they do. Free software will continue to flourish and thrive.
I bet Microsoft would love to by up a controlling interest in Redhat.
It would be like Homer Simpsons' internet company that Billy bought and destroyed.
Ken Broadfoot
Bitcoin pyramid: Join here: http://www.bitcoinpyramid.com/r/1427 it's FREE!
Do it Rob.
Use the Slashdot effect to hype yourself and we could all clean up..
Most companies beholden to shareholders make decisions based purely on the blind profit motive. Any other morals fall by the wayside. Would Red Hat have any mechanism in place to prevent this? If not, then it is once again up to the community to keep them in check. :P
Now, I like the direction Red Hat's taken lately, and I'm NOT saying they have any bad intentions. (Hey, we don't even know if they're really going public!) I'm just concerned that if they do go public, the current employees may not be able to prevent the company from moving towards the maximum profit, which may be very much at odds with the Linux community.
Then again, their source is all open (so far), so that may give us an out.
James
I think that Red Hat stopped parroting /. just for this reason. :-) I always thought that composing their home page out of snippets from other pages was pretty um.... lame.
I seem to remember reading somewhere that someone left a large brokerage and set up an online system for IPOs - so that real people could get a chance to profit from them, rather than just the brokers and brothers-in-law. A chance for John Q. Public to get in before the price tripled. Anyone know what / where this was? I found ipo.com, but I'm not sure that's it.
Um... well, that's not what I meant when I said I didn't like their home page. :-)
Yes, openipo.com was the site I had read about... thanks! It would be nifty, if Red Hat *does* go public, if they used this mechanism. It'd fit with the whole Open Source / GPL thing pretty nicely, I think.
Redhat could make their installers et al proprietry
so that you couldn't copy that, hence making the
dist proprietry.
Commodore 64, Loading up the dance floor!
Well, if you do go public, you do run the risk of a possible hostile takeover bid. Usually this occurs when the sum of your assets exceeds the value of your outstanding stock. Certain computer companies (I don't mean MS) have been known to "grow" using this acquisition method.
The purpose of an IPO is to raise money so that a company can expand. Investors will buy stock if they believe that the company can make a profit. So the question becomes, how does RH intend to make money? The means of making money constitute assets that might appeal to another company.
RH is positioning themselves to provide consulting and services for installation and maintenance of Linux. I believe that this means service contracts. Those contracts represent assets.
If RH is successful in packaging and selling Linux, their "brand name" becomes an asset. Profits from the sales of Linux represent assets.
Suppose that I am a major distributor of a proprietary software package that runs on Linux. I now wish to expand and distribute a "complete" package of my software with the OS. Do I start from scratch, or do I buy a "branded" name company?
In all fairness, I don't believe that RH would be a prime candidate for a hostile takeover bid. However, people must remember the computer industry has had cases when a small companies get swallowed up by another. Ever hear of a company called Computer Associates?
If this is is how you feel, then you are opposed to the concept of free (as in freedom) software and open source. Furthermore, you are against Debian's Free Software Principles (since you say you want a cut of any money made).
Stallman's whole program is that people should be paid for services, not the software, and packaging and distributing software on CD-ROMs and supporting the customers is a service.
But what's to keep all us Slashdotter's from buying up stakes in the company. Then WE could make demands on the company. Let's see, 7 million Linux users, $100 bucks each, $700 million. I doubt Red Hat is even worth that much.
OTOH, if every Fortune 500 company sunk half of what it paid in Win95/NT/Exchange/IIS/SQL licenese in one year into OSS. Where would we be?
I talked to Bob Young at LinuxWorld Conference and Expo... When I asked if they are planning to go public, he first looked annoyed, then told me that they have no intention of going public within the next 20 years.
Mr. Jobs, Joseph Campbell's favorite high tech CEO, rarely makes decisions that are the "most profitable," rather he makes decisions based on the vision he has for his company. Sometimes they are good, sometimes they are bad. And yes, he did lose his job there for a little while, but I think it was good for his personal growth.
While sometimes I do agree with JWZ, I don't agree with his analysis here. There have been countless times where that very conflict has come into account, and indeed, people have chosen the right path and not lost their job.
So true. Market power corrupts absolutely. Nobody wanted to have to PAY for stuff on the Internet when they could get it for free either.
It is interesting, even if there are only a couple posts so far, to see what people have to say about this.
It is interesting because I remember reading usenet posts back in the day, about Yahoo! going public. People said "Yahoo's revenue will be smaller than that of any magazine or newspaper. It would never get as much advertising revenue as say, any of the major CABLE networks." and "How can people invest in Yahoo when they give everything away for free!"
I think Redhat's comments bear striking similarities. But the fact is, Linux, from a market standpoint, doesn't have a set business model. It took a couple years AFTER the Internet hit the big commercial time for people to get it all figured out, and we still don't know what the heck we're doing.
But Open Source Software, much like the Internet before it, is due very soon for investor success. It may not be adopted as early and as quickly as YAhoo! and Netscape were, but believe me, the parallels as to what was going in in the early 90s for the Internet, and what is going on in OSS world now are strikingly similar.
Heck, we all learned that the stock market is a spiral from Pi, right?
--Clay
http://www.knowpost.com
Having run the venture gauntlet I can say with some certainty that they must be thinking of an exit strategy. They IPO (and/or) get acquired by a behemoth company like IBM or Microsoft, or they grow into something like a Microsoft otherwise no real value has been returned to the investors. In the meanwhile they are doing all the right things. Building the brand, putting a crack management team in place and generating tons of PR.
When you start going after money, angel (individual investors) or venture, it's all about valuation. Venture guys have an interesting saying- "is's the Race, the Horse, and the Rider..." This means the time must be right, the idea good/popular/compelling and the team must be proven people who can execute thus increasing the value of the investment. When you get beyond the angel investment stage it's purely a numbers issue.
I think the real concern here is the public and perceived value of Red Hat. We get lots of calls asking us what the ticker symbol for Linux is. If the Red Hat plan is to make the Red Hat brand synonymous with Linux (Linux & GNU Tools) then all I can say is let the buyer beware... (espically if the ticker symbol is LINX or something like that) In the meanwhile their execution of the process is good, brings Linux into the public imagination and captures the attention of people tired of beta testing Bill's code.
Red Hat is already commercial and ownder by companies like Intel and AOL. Going public (changing who the owners are) doesn't change that.
Startup companies go through perilous periods of growth--and statistics show that a majority fail to make such transitions. RedHat is at such a stage.
I've been through several startups, both successful and not, and the two most perilous times are
- bringing the initial product to market, and
- making the transition from "lean and mean" to "well-organized."
The latter is the stage that RedHat is at: too many employees to organize informally, but much danger from instituting more formal "rules and procedures" inappropriately. It really is a phase change (like from liquid to solid) in the life of a company when informally organized groups of dedicated individuals are no longer enough to hold a company together.Those of us who work as drones for corporations (like I currently do) often are isolated from the organizational needs of a company as it grows beyond the everybody-knows-everybody-else stage. There is a bit of black art about bringing many groups of people with wildly divergent world views into focus upon a common goal. Many more people are bad at melding the combination of leadership, support, and organization than are good at it. Companies will pay people big bucks just on the vague notion that someone has such skills.
It's unnatural to treat people a bit like objects, organizing them according to their attributes, yet still allowing them to remain human and develop their abilities as well as contribute them. Yet that's what makes companies successful. It's especially hard in technological areas, where each developer is more of an expert in her/his specialty than the manager is--but where the overall product forms the goal, and not any particular expert's view of it.
The sad thing is that many of us have never worked for a good manager--or worse, we have, but our current manager is compentent in nothing beyond sucking up to superiors. A good manager is a rare breed. Now think of how rare a good manager of managers must be! Yet companies die for the want of such people. I've seen it happen right before my eyes. And this is the saddest thing of all: to see the effort of good people wasted because management sucked. Almost everyone reading this will see it, if they stay in the industry long enough.
Although I doubt I've swayed many (if any) management-haters among us, my point is: RedHat needs someone with a special set of skills and experiences. Private and public corporations both need the same things from their upper management. The fact that RedHat hired someone who has worked as an upper manager in public corporations says nothing about their intentions for going public. But it's a good sign that they are preparing for their own growth by hiring someone who has been through this difficult phase several times before.
If Red Hat went public, I wonder how they would be perceived by the investors, as far as their potential. Hopefully they'd realize that they're going to be much smaller (profit wise) than some of the other juggernauts of the software industry.
400,000 units is good. Selling service is good, but they're still selling non-proprietary software, so profits aren't going to be enormous.
Who knows though? Some companies that make zero profit are watching their stocks do rather well because of the "coolness" factor. Some companies even loose big bucks and still make out good in the market.
In the end though, I'm glad that RH would probably be small(er) profit wise. I'd still invest in them though to support them and the whole Linux community. Besides I wouldn't want to miss out on anything now would I?
I think that non-proprietary software co's like Red Hat and internet portals and stocks are two different animals in my opinion. Many of the internet stocks will eventually fall from grace anyway if they don't eventually make a profit like Yahoo.
I think that software companies that charge for popular Linux applications will make good money. Thats obvious. I have no problem with that.
I like the OS free and non-proprietary though. I think that is the most important thing for the future of computing, a commonly used non-proprietary OS that is rock solid. No stinkin BSODs. Open and solid.
How much would Red Hat benefit from going public? Of course they'd get a boat load of cash, but how much cash do they need to make their goals? They don't need to take over the world to be sucessful.
Young and partners may want the profits all for themselves.
Tons of cash help co's like Qwest which build huge expensive physical constructs more than they do software companies which may be able to stand on their own just fine. Not every big company needs to go public.
Please don't lecture me on all the ways going public and getting instant cash would help Red Hat and maybe even us in the end. I can think of plenty of things they could do with the money, but the real question is, is it necessary and is it the best choice for Red Hat's current owners and their goals for RH?
I think if Redhat were to donate a certain percentage of the shares to some Linux organizations, like Linux International, SPI, OSI, FSF, whatever, and if lots of Linux users bought as many shares as they could, then the issues of Redhat doing bad things because of shareholder interest would be irrelevant. The linux community and the remaining shareholders would be the ones to have the say in what Redhat did, as far ash shareholder interest is concerned.
What do you think? BUY BUY BUY!!!
But if you're selling to geeks,
"Painted whore of the Linux world"
is not a bad rep to have.
The idea that RH has some sort of obligation to uphold the tenets of Open Source is absurd. They are a company. They are first and foremost out to make money; there should be no doubt about that. Redhat at this point will have its stock skyrocket at an IPO, and they know it. Good for them.
Remember, Redhat has always been somewhat helpful to the linux community, but that helpfulness has as yet been limited to making or supporting specific pieces of software.
The opinions stated herein do not necessarily represent those of anybody at all. Deal with it.
they eventually will
They might. However, they might not. If some other company comes out and steals their market, they might find themselves an also-ran very quickly.
internet and e-commerece is part of the future
While I believe this to be true, I don't think that this alone guarantees that Amazon is going to be one of the long term successes.
A lot of early stars in a new market fizzle for one reason or another. I'm not saying that I think Amazon in particular is going to fail, but that investments in a company like Amazon are a gamble. Some people will profit tremendously with this sort of company and some will lose everything. All speculative investing should be done with caution.
*sarcasm* After all, how can a company go public when its primary source of income has been proven to be so inferior to Microsoft's flag bearing OS. */sarcasm*
RedHat does a fairly good job as an advocate of the operating system to the 'phb's. Having a publically listed company supporting an operating system would surely put rest to the 'Who can we sue' FUD.
Any one person holding a huge stake in a company takes a lot of money...I'll pick on Boeing, since I'm somewhat familiar with their finances. Of however many billion dollars Boeing is worth on paper, 35-40% of the shares are held by non-employees. The rest is owned by executives, the company's charitable foundation, employee stock-investment plans, etc. This 35-40% number is generally considered to be a healthy amount of shares available to the general public.
If RedHat does its IPO, I'd expect that RedHat's suits and their existing investors will hold a big chunk of the shares. A previous poster brought up a good point - MS wouldn't be able to get approval to buy much (if any) stock...which seems like the Right Thing to do.
I'll be picking up my few shares...
I've been saying this for awhile..
"The pen is mighter than the sword... But what if you can't write?"
I ate my tag line.
-=Ellis (D)25=-
I think the people investing would have to understand linux and the free software movement. People like most /.ers. I think a lot of people would look at any prospectus that said "We sell something that's available for free" and forget about investing. However, some people who understand what is really going on, would probably invest. Red Hat might be the first tech stock in years to make an IPO that doesn't inflate the stock price.
Incidentally...you wouldn't happen to write for Suck, would you?
The best part about this rumor being posted on Slashdot is that the Redhat homepage will carry the story. Does it really matter if its true?
If Redhat were to go public, they might survive. Their business model allows them to profit from other people's work, so their product need not be in question. They would need to expand their support services to the point where that is the companies primary source of income. That is their product. Not Red Hat Linux.
If Red Hat goes public now, it will make Rob Young and the rest of the Red Hat crew a ton of money. Almost guaranteed.
:)
Why?
1. Because traders love the internet. Linux is related to the internet (somewhat). Look at stocks like Amazon (no profits *ever*) and K-TEL (ugh).
2. Operating systems are big money and make good stocks. Witness Microsoft, the company with the largest market capitalization *ever*. Granted, MS does other things besides OS's, and Linux is non-proprietary, so the potential is smaller. But even if Red Hat becomes 1/100th the size of MS it will be huge.
3. Linux is in the news. In case you've been living under a rock for the past few months, Linux is the newest media darling. Even my mom has heard of it now. And news affects stock price. Thousands of traders are sitting out there watching news reports and press releases, trying to get in before the flood on the smallest announcement.
I know I'll be watching Red Hat on IPO day. Hey Rob Y., you got a presidents list?
But you forget.. linux is a service company.. microsoft would be able to purchase redhat easily under those terms and hold majority no problem. It may be one funky battle.. but like i said.. no one OWNS linux, its GLP'd or Public Licensed. So they're selling services and CDs filled with software and offering tech support. It doesn't have to be IBM or Microsoft to be the beast to take it over, it could be anyone. But since RedHat doesn't own linux, i don't see how it could be stopped in court. Its simply a service company with a branded service.. I don't know how they get away with calling it a product, but we will see what happens. I'll just hang in for my Etoys and Barnesnnoble.com IPO :)
Now one thing is on my mind
If Redhat did file an IPO, i would assume the
current companies already investing in redhat would be the first to jump in the game..
but what if say Microsoft or IBM or Apple bought majority shares in the company.
wouldn't it be ironic for microsoft to own the baby company of the operating system thats trying to compete against its very own Windows platform?
hmm.. I would be happy to own a chunk of RedHat and i know redhat nor anyone owns "Linux" as we know it.. but filing for an IPO would enable a company with lots of money to direct the linux market in a goofy way..
i don't see the server side changing much, admins know and understand the product.. but if microsoft bought majority, slapped in some developers and put its interface on it, integrated it into its current os's and gave it out to the consumer.. wouldn't that kinda null and void the many reasons to support linux, or redhat for that matter? after all out hard work would in one fashion or another be owned by a bunch of investors and the last thing i want to see is more lawyers and licensing involved..
i should just start my own organization.. called As Is Software.. and have no licensing at all and just support truely free and truely open software.. that way if someone uses it, more power to em.. and that way technology will move quickly and rapidly because lawyers and biggots won't be there to slow me down.
Hehe, acutally, hang around any Physician for any length of time (and listen to him talk to other doctors) and you will see that they have more abreviations than any other group or profession on this planet. I mean its unreal. The sentences don't sound like english :)
:)
(of course the abbreviations and acronyms could be because they routinely and regularly have to say 3 words that are 30 letters long just to describe a test or drug
James
O.K...Check this out. 1.99 for the plain jane cd. Perfect for most of us. The corporate chums are no doubt (if they buy linux) going to buy the $50.00 cd with all the (whatever else is on it). RedHat knows this. Compare to win95 or some other version of windows. It costs a phone call or walk to your buds house, because I know most of you who are using it, stole it, and don't try bullshitting me. All the corporate chums are going to pay whatever it costs, I have no idea ;), for the cd and get the license. Microsoft knows this. I gotta go party.
1. C better than C++ --FALSE
2. gtk+ freer than Qt 3. Gnome cooler than KDE
Regarding numero dos, what do you mean by freer? A less restrictive license? That's going to change. But as far as I'm concerned, if you give me somethin for no nothin. it don't get no freer than that. You can find that in "The Fonze's Guide to Free Shit"
So far, RH has proven that it's not like other companies. While going public would be frought with danger, there's no reason that RH can't remain committed to OSS. OSS has been extremely good for RH... I'm hoping they'll remember that, whatever they do.
BTW, let's not forget that this isn't really even a rumor... no one with any inside knowledge has been cited. It's just one reporter's speculation based on a personnel change in the company.
--
--
Think Green... Burn only 100% recycled dinosaurs in you car.
> Support is a (sic) primarily a loss leader.
Take a look at IBM's last quarterly report --
services provide the lion's share of earnings.
> Keeping a company private doesn't
> do much to the share price.
In practice, if an IBM carries the stock of
a small public company on their books, it's
not reflected in IBM's stock price in a
material way. And if an IBM sells the stock, its
seen as a "one-time gain", unimportant in
analyst's eyes. Strategic reasons dominate in
investments like this, and an IBM's preference for
RedHat going public or staying private lies in
strategic issues, not bottom-line issues.
If RedHat goes public and breaks the faith of its supporters, then the OSS and Linux communities won't use RedHat, reducing their value, yada, yada...
The only way for RedHat to continue to thrive is to continue to support the OSS standards that have made it thrive in the first place.
So if RedHat goes public and behaves in concert with the community, then we are happy, and it is successful, thus proving OSS a viable economic decision, and we all win, (maybe including RedHat investors).
But if RedHat goes public and turns its back on the OSS/Linux community, then it will fail and someone else will step up with a popular distribution. And its no skin off our back, but RedHat loses (and probably so do their investors).
My $.02,
Demian
Looks like if this is true Linux has finally hit the big time.
I must say, though, I am skeptical of Red Hat's ability to please investors.
Nevertheless, this IPO, if it happens, should mean good publicity in areas that
until now have had little exposure to Linux. I can't see the future, and I don't have
x-ray vision, but the popularity of Linux could go through the roof before long.
My interpretation of the whole IPO situation is that it could serve to counter the
uncertainty tactics currently used by 'certain companies'. People investing real cash
should lend some credibility back to Linux that MS seems to have been
trying to take away.
Does anyone think that an IPO could have detrimental effects? What's good for Red Hat
investors isn't necessarily good for the Linux community.
Even if it is only a rumour, shouldn't people get ready for the worst?
Regards,
--
JCA
Offtopic: I read an article by Michael Lewis (author of Liar's Poker, no relation) about how traditional Wall Street underwriters would eventually become obsolete as online brokers are able to undercut the fees of the traditonal brokers. Does anyone have any thoughts as to the feasiblity of this? It seems that the SEC and legal hurdles would be significant for a startup; but if I were an established online broker, I would be all over this.
"If I am such a genius, how come that I am drunk and lost in the desert with a bullet in my ass?" --Otto (Malcom ITM)
http://www.witcapital.com
http://www.openipo.com
I think that www.ipo.com is more a site for distributing regulatory and marketing information about upcoming ipo's.
I think these are really interesting concepts. eBay meets IPO craze.
"If I am such a genius, how come that I am drunk and lost in the desert with a bullet in my ass?" --Otto (Malcom ITM)
So they do an IPO, they make a tonne of money and they invest it in helping OTHER developers do more things for Linux. Look at all the current hardware that does not have Linux support, bet RedHat would love to help take care of some of those issues, or maybe help a game developer do a linux port, or hell a linux version from the beginning... I say all the luck to RedHat and you can bet my broker will be making sure to pick me up a few chunks of this stock.
I asked another Redhat official the same thing, and got the same kind of response.
sup
I suspect you're right and any move away from the spirit of the GNU GPL would be preceived as a form of damage and the community would route around it (sounds familiar, hmmm) leaving Redhat to die an isolated death.
If, on the other hand, Redhat were to push even harder with their support for software development for the community as a whole (support more things like the Gnome and Enlightenment projects) then they would probably do outrageously well. This would prove most interesting since it would be a case of a publicly held company giving away its goodies in order to make a profit. Talk about yanking the concepts of the business world inside out! *chuckle*
Utopian dream: OSS under the GNU GPL leads to a solution to the artifically-enforced scarcity model of modern business and we finally see the solution to many of the world's current problems: By making sure everyone has the basics to work with (food, housing, education, information) we ensure that we have vastly larger markets inwhich to sell everything we build and make beyond those basics.
Everything in the Universe sucks: It's the law!
Redhat going IPO has both good and (potentially) bad aspects:
It'll be good if Young and company honor the spirit and letter of the GNU GPL, but this could prove to be rather hard to do since the value from the GNU/Linux community's work is measured in quality while the value of a compay in measured in dollars. Stockholders want dollars, GNU/Linux folks want quality software, but dollar driven software is what lead to the formation of the GNU/Linux community in the first place. Can the two co-exist this closely without one killing the other?
It'll be bad if Redhat breaks with the spirit of the community and tries to impose de facto standards for Linux distributions. Redhat history suggests this is unlikely -- they've been great for the community thus far -- but then they've not felt the pressure from owners, either. Pressure from stockholders for bottomline return is, again, measured in dollars and they couldn't care less about quality (just look at MS stock values if you think this isn't valid.)
I wish Redhat the best, but can't help feeling this IPO idea is somewhat at odds with the whole idea of software with freedom. I hope my misgivings on this are unfounded, but the idea of a group of stockholders directing a Linux distribution makes me rather queasy.
Everything in the Universe sucks: It's the law!
>But... RedHat already has commercial investors that in turn have their investors.
>
Yes, you're very right. MS, by focusing on making money instead of making quality product, has in fact created a huge vacuum in the OS market -- apparently markets hate vacuums as much as nature. Are Redhat's investors acting in their own best interest by supporting Redhat with investment dollars? Yes, I agree that's true. MS has shown time and again how foolish it is to expect to do well working with MS in an MS-dominated marketplace. GNU/Linux is a more-than-adequate alternative to MS product and these companies see that most clearly.
> Going "Public", on the other hand, is a different animal altogether.
>
Again, you're very right -- it's a totally different game when and if Redhat goes public. I'm not so sure that would work. (See further comments in a separate reply message, same string, posted earlier.)
> On the flip side, look at Caldera.
>
Yes, Caldera may prove to be another great example of how to blend the profit motive into the GNU/Linux community providing Caldera feeds back into the community to keep it alive and growing. What does Caldera provide the community besides another for-profit distribution? I'm asking because I don't know.
> Money for Linux can't be a bad thing.
>
No, I don't think money is a bad thing at all, in fact it's very necessary (I'm not a socialist; my politics are Libertarian and have been for a many years now.) The problem arises when money in the form of profit takes precedence over quality and this happens to businesses _so_ often. MS makes up for quality with slick heavy-handed marketing and by driving (or buying) any competition out of business. I like to think of GNU/Linux, the DoJ suit and a ton of bad press as being white corpuscles attacking a bad germ (granted, a gooey metaphor, but a good one (Oy, that pun even makes me wince.))
Thus far Redhat has provided the best example of how a profit driven company might deal with the quality driven GNU/Linux community. They give back support for important development projects by funding those projects. The amount of goodwill Redhat has in this community is phenomenal and well earned at that. I can't think of any other business which, within the context of their potential-customer community, has the same amount of respect as Redhat has in the GNU/Linux community. Even people who don't use their distro and don't like the RPM package management format don't bad mouth Redhat the company. This works to generate even more profits for Redhat -- that's the way you do it.
Everything in the Universe sucks: It's the law!
If Redhat is going IPO and if Redhat is smart, they'll introduce some form of poison pill. For those who don't know, a poison pill is basically something which goes into effect if there's a hostile takeover. A poison pill could be just about anything, such as all stock options become fully vested immediately. Poison pills can work quite well. Even without one, M$ wouldn't dare to buy Redhat with the DOJ looming over them. The FTC would likely block it in an instant.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
Every successful start up eventually does an Initial Public Offering of their stock. After that you can become part owner by buying shares. In theory, the company is governed by its stockholders, so if Red Hat ever becomes public, it's current management will lose its independence.
They will probably become more profit oriented, which isn't necessarily bad for Linux, since we'll always have other distributions to fall back on.
Since everything's under the GPL, what assetts does RedHat actually have? Mindshare, a few trademarks, its personel... what else? Albeit, they retain the copyrights on whatever they've written themselves, which could potentially be relicensed (as could future works), but we're not talking about Lucent here. There aren't any transocianic cables or fab plants involved.
"If one is really a superior person, the fact is likely to leak out without too much assistance" -- John Andrew Holmes
Why pay for the hottest technology around, when it can be had free? Like I and others have said, Redhat doesn't develop, they don't "have" a unique or different technology of their own. Acquiring Redhat would serve the sole purpose of obtaining distributive market share.
Sorry though, I have to agree as a businessman, Redhat is not worth $1 billion in equity stocks.
Linux may be everywhere, and it may be the hot technology. Remember when Windows was like that? Windows 1.0... there were small differences in the situations, but frankly if Redhat goes IPO and they start listening to shareholders, then we have a baby M$.
--globalnap.net, product of pure caffeine--
1. A cool company does not necessarily make a wise investment. Good technology investments are companies with a unique product or service, and one that is in high demand and will continue to be in high demand. Niche companies are usually not wise investments, as they may not have the "staying power" of non-niche companies. Niche companies generally file for IPOs for two reasons: a. Majority shareholders get rich; and b. To increase available capital for expansion into new or larger markets. Option a. is a possibility here, obviously with the media paying attention to Linux and Red Hat in particular, uninformed investors (like many people here... "buy RH, it's cool") pour money into an RH IPO, increasing the equity net worth of majority shareholders. Option b. doesn't make a lot of sense, unless RH is planning some top-secret new market penetration move.
That said, I think this is only a rumor anyway... because:
2. The legal duty of the CEO of a publically-traded company is to make decisions based on the greatest profitability for company shareholders. (I could quote SEC regulations, but I can't think of the numbers at the moment). As has been shown time and time again, profits and OSS don't mix.
I for one hope things stay the way they are.
Oh, and by the way, a COO usually has nothing to do with an IPO... that falls under the duties of a CFO.
--globalnap.net, product of pure caffeine--
Red Hat support is unsatisfactory. I got ten responses from a single mailing list before I suspect anyone at Red Hat even read one of my e-mail support requests. In fact, most of my support requests to Red Hat, submitted during the official support period, went unanswered.
If Intel, Netscape, etc. can own a piece, why not us?
Free Software community could dry up pretty quickly under shareholder pressure.
Not if the shareholders are supportive of OSS.
Buy the stock! Have your say!
Actually, right now RH's chief investors (Intel, AOL/Netscape, etc.) aren't exactly poster children for OSS. Some public shareholders could provide pro-OSS balance.
Historically, the pressure of pleasing stockholders has prevented more problems than have been created.
Look at Pfeiffer at Compaq, for example, or Amellio at Apple.
Both were duds that were ousted partially due to shareholder pressure.
Of course, in a perfect world, the perfect manager could work better without having to please the "masses". Unfortunately, many CEOs are incompetent. JWZ should have looked at his own company and realized this.
If in fact MS would ever embrace Linux, they would most likely not buy Redhat. Remember all that Redhat isa brand name and support service. MS already has both, so they could just copy a distro.
Probably they would do something quite similar to what Corel is doing w/ Debian.
~ rt ~