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Red Hat Moves Into European Linux Marketplace
bOnUs (among others) slipped us the skinny on a story @ silicon.com that talks about how Red Hat is gonna use recent cash injections from Dell, Oracle and IBM to increase its presence in the heart of S.u.S.E. territory, AKA Europe. Normal business expansion in an increasingly borderless world? An attempt at creating Red Hat World Domination? This can be interpreted either way.
RedHat could either go and start targetting advertising for people that are already using Linux and try and grab as much of the existing Linux market as they can, or they can try and target advertising towards people that aren't yet using Linux.
Traditionally, RedHat has done both. I've seen RedHat advertising in the Linux Journal as well as in other computer magazines (probably mostly ones aimed at Unix users or programmers, though).
I suspect that RedHat will continue to do both in Europe, too.
At the very least, any attempt to completely only target at potential new Linux users instead of existing Linux users would be suicidal if successful because part of what helps to get new Linux users using a particular distribution is that it's the distribution their long-time Linux using friend (or colleague or random people in a local LUG, whatever) either uses or recommends.
So, of course RedHat moving into Europe will take at least some business from SuSE, in the sense that there are people that might try SuSE and will instead try RedHat.
Hopefully they'll both manage to expand the general Linux market enough, however, that business will continue to expand for both of them.
how will this affect Redhat's ability to include things like SSH, or other packages involving strong crypto, in european releases?
they aren't allowed to ship those things outside the US now, right? so now will they be allowed to just send over the source code to the european offices and have _them_ compile the packages, thus circumventing the export controls?
unless i'm really confused, this would be a _very_ interesting test of the "code-is-free-speech" waiver to the export controls. An american country publishing open source software with strong crypto through a branch located outside the US.. hmm
-mcc-baka
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
No--I'm not writing flame bait. I'm stating brutal, legal, fact in U.S. law.
Everybody got all kinds of enthused a few weeks back when Red Hat did an IPO. Yeah, things got kind of funky about who could get pre-IPO shares and so forth, but Red Hat did the right thing and lots of deserving people got in on the bottom floor.
But guess what? Red Hat is now a publicly-traded company. And the directors of a publicly-traded company have a fiduciary responsibility to their shareholders to maximize revenue. Let me re-phrase that in a different way: the directors of a publicly-traded company must always view the interests of their shareholders as being more important than the views of any group--employees, customers, community--anybody.
So it is entirely fair to assume that Red Hat is moving into Europe intent on dominating the European marketplace for Linux. (Note, BTW, that the Red Hat official doesn't say, "for our distro of Linux"--he says, "for Linux.") Red Hat has to fight for market dominance, and defend their marketplace dominance, or else they're going to join the long list of technology companies that get clobbered by shareholder rights suits.
We might all agree that the people at Red Hat are worthy folks. We might all agree that they are noble of heart, and true of purpose. But once they become a publicly-traded company, they have to constantly increase their share value, or their stock will be hammered. And if their stock price is hammered, and a plaintiff can demonstrate that the directors acted on behalf of another group to the detriment of the shareholders, Red Hat can lose a huge chunk of money. In other words, Red Hat cannot act "for the good of the Linux community" if that means that Red Hat revenues--in this quarter--will suffer.
My little company develops large-scale software projects--but we also develop components for database vendors. Two of our clients have been through this process--when you go public, the rules suddenly change. No more Mr. Nice Guy. No more whim-of-the-boss perks like Free Pizza Day or flying the staff to Bermuda for lunch. And all of a sudden there is no more visiting back and forth with industry chums, no more collegiality, no more "hey, we're all in this together." Suddenly the view--driven by all those guys in ties that Wall Street required you to hire--is that if we're all in this together, "this" must be a knife fight. (More or less verbatim quote from a finance guy--with really good hair--at a client's.)
Red Hat's going to wipe the floor with SUSE--and SUSE won't know what hit 'em. It's not that Red Hat is Evil--it is simply that Red Hat has moved up to a different league, and in that league that's how the game is played.
If we go beyond the things that probably aren't going to go wrong, we have one fear - that Red Hat may achieve name recognition and brand loyalty elsewhere, as it has in the U.S.
Pardon me if I don't throw a fit about this :-)
Thanks
Bruce
Bruce Perens.
Let's look at an example. I own RedApple, which sells apple piesixs. I make all my apple piesix recipes freely and openly available, on the condition that anyone who sells a modified apple piesix without making a special deal with me has to give the recipe to anyone who buys it.
Of course, apple piesixs ingredients are also all distributed under similar licenses, and anyone with some culinary expertise can put an apple piesix recipe together in a short time. So all that RedApple has over the upstarts a recipe that reflects more time in planning.
And what if a competitor sells cooked piesixs for $2, or offers to squeeze them through extra-wide phone lines straight to your house for free? I've got to make money, don't I? So I offer support and consulting, to help you deploy Official RedApple Apple Piesix in your large dining room. I advertise and raise awareness not only about my brand, but about apple piesixs in general, and put apple piesix on stove tops and tables that used to use RottenNOP.
All this time I continue to give back to the apple piesix community with new and improved recipes, even while some of my competitors are turning profits by including proprietary crusts. Yet because RedApple now has a ticker symbol and an insane market value, I'm now more evil than satan himself.
Gates' Law: Every 18 months, the speed of software halves.
No doubt many of us will grab our foreheads in disbelief that Red Hat has chosen to spend its money battling another Linux distro rather than increasing its market presence in the US. But if you take a moment to think about it, you see how much sense it makes.
In the US, Red Hat is the talk du jour, as is Linux itself. The disorganized (or, actually, unwittingly organized) mass media have done a far better job marketing Red Hat Linux in the last few months than any targeted ad campaigns could do.
In Europe, however, SuSe is making the bucks. It's the number one rule of publicly held companies that the stock must go up. That imperative overrides all other converns. It's for this reason that we see companies purchasing their competitors after they have exhausted their slice of the demographic pie. They have to keep growing if they want to survive.
Well, RHAT wants to survive. They can't ride the tide forever, but eventually the journalists will discover some other new fad. Thus they have to send a message to their stockholders that RHAT is a sound, competitive investment. One that will continue to grow its market share and maybe someday (preposterous as it sounds) make a little money.
Thus this maneuver against SuSe. It's the obvious target. The only target, really. They can't pique interest any higher in the US directly, so they're doing it indirectly. And if they happen to gain market share while they're at it, I'm sure they don't mind a bit.
Oh, and if you're worried this will be a bad thing for Linux, don't. RHAT is not big enough yet to be a MSFT, so in the mean time they'll just be one more capitalist company fighting for dominance. And that always brings benefits to users. At least in the short run.
-konstant
-konstant
Yes! We are all individuals! I'm not!