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Red Hat Software Businesses

Red Hat Reports (tiny) Loss, Revenue Slip 205

Posted by Hemos from the keeping-the-dream-alive dept.
Futurepower(tm) was one of the first to write with the news Red Hat reports loss, revenue slips, via Infoworld. Szulik ? is right in his statement that compared to what's going on in the overall technology segment, RH is doing a good job.
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Red Hat Reports (tiny) Loss, Revenue Slip More

Red Hat Reports (tiny) Loss, Revenue Slip

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  • I'm surprised- (Score:2, Interesting)

    by purduephotog ( 218304 )
    Software giant weathers well, Intel slips 15%.

    Guess I know where to invest my money *grins*

    Actually, looks more appropriate to upgrade my firewall. One linux product that tends to work well out of the box... tho I wish it was more secure by default. I don't think I've had any trouble installing it and running... unlike BeOS which failed 8 out of 10 times.
  • Given the statement in this press release [redhat.com], things aren't looking good for next year, either:

    The company reported an adjusted net income of $600,000, or break even per share, for the first quarter of fiscal 2002, compared to an adjusted net loss of $3.7 million, or $0.02 per share, for the first quarter of fiscal 2001.

    Employing those psychic accountants must be very lucrative!

    -Waldo
    • Fiscal 2002 . Not the same as "real years". RedHat's Starts in June, apparently. (September - 3 months == June).
    • Their fiscal year ends in February, 2002, I believe. We are in their fiscal 2002.
    • ...for the first quarter of fiscal 2002...

      ...for the first quarter of fiscal 2001...

      Not to spoil a good joke (psychic accountants! Ha! Much funny!) but it's fairly obvious that their fiscal year started last quarter. For instance, I work at Micron, and our fiscal end-of-year just happened, and we are now officially in "2002". Now, we didn't do *nearly* as well as Redhat, and apart from a couple chicken-little engineers, nobody is talking about how we might as well close shop (not that you did).

      HAND!

      • That press release came out in June. Which means that their fiscal year for 2002 started in March of 2001. If that's accurate, their accountants are smoking so much crack that there's no way they'll ever break even.

        -Waldo
  • Look at VA's stock. All time low. Last time I checked at $0.92

    Things are looking bleak for Linux companies :-(

    • Re:VA Linux (LNUX) (Score:2, Informative)

      by FortKnox ( 169099 )
      This isn't surprising. Lemmie add Intel, AMD, and Transmeta into the mix. Looks like all tech stocks are hitting low. Not to mention that stocks dropped drastically after last tuesday.
    • But what does VA do, now that they no longer make hardware? Also, how does RedHat make money? I've never given money to any "linux" company, but we run lots of Linux servers.
      • "Under its new operating model, which focuses its SourceForge application software business, VA Linux said it expects revenue in the first quarter of fiscal 2002 to fall within a $3 million to $4 million range, excluding August hardware shipments. Also expected during the first quarter is a net loss from operations of $10 million to $13 million, the company said."

        So instead of selling a tangible product, they're a dot.com. What the hell? Isn't this 2001? Aren't dot.coms dead?
        • So instead of selling a tangible product, they're a dot.com. What the hell? Isn't this 2001? Aren't dot.coms dead?

          Actually I believe they are a "dot net" (not to be confused with .NET). I don't think I've heard too many bad things about dot nets and dot orgs, only dot coms.

          Though I've always come to know VA as a hardware company, I guess they do own a few things they can make some money from. Personally I would have thought building and supporting Linux boxen would have been far more profitable than the SourceForge thing, but I guess I would have thought wrong...

          On another note, maybe I'll actually go buy a boxed RedHat distro one of these days (when 7.2 is released perhaps). I've been using RedHat for a long time, never once paid a dime for it. Besides, I'd like one of those tux stickers :)
    • Remember the Eric Raymond "I'm a millionaire" email he sent out after VA gave him some options? Does anyone know what those shares were worth when his options vested? I haven't seen the "I'm a thousandaire" email yet.

      Thanks.

    • how can a company with a site which hosts 30 million hits per month not be worth anything?

      -sam
      • How do you get income on 30 million hits? Marketing with banners (hardly any, maybe the costs of hosting), and selling the emails of all users for spammail (it'll be a cold day in hell before taco does that).

        Where's the income?
        • the point is there should be opportunity for other services. if 30 million hits are coming, that's 30 million opportunities to offer your services to somebody. the VA Linux umbrella supposedly has a ton of services, many of which are supposedly very needed by the very people who are generating those 30 million hits.

          i guess my point is that they have the opportunity to do something more.
      • equity = assets - liability
    • so what did the slashodot crew get when they were bought out?

      what did it equate to at the time, and what does it now?

      and where are my pants?
      • these are andover.net shares, multiply by .45 to convert into LNUX shares.

        From the ANDN Registration statement: (http://www.freeedgar.com/search/ViewFilings.asp?C IK=1093580&Directory=950135&Year=99&SECIndex=5494& Extension=.tst&PathFlag=0&TextFileSize=452369&SFTy pe=&SDFiled=&DateFiled=12/3/1999&SourcePage=Filing sResults&UseFrame=1&OEMSource=&FormType=S-1/A&Comp anyName=ANDOVER+NET+INC)

        Under the terms of the Asset Purchase Agreement between BlockStackers, Inc. and Andover.Net, dated as of June 18, 1999, Andover.Net purchased those assets of BlockStackers relating to the Slashdot.org web site for 1.5 million in cash paid at closing and maximum future cash payments of $3.5 million payable over the next two years contingent on the continued employment of two key employees. Maximum future stock consideration of $7.0 million is payable over a period of two years following this offering. For the purposes of these issuances, the number of shares of common stock to be issued is determined using an assumed initial public offering price of $16.50 per share. Thus, the total consideration that will be paid is valued at $8.5 million and the maximum contingent consideration payable is $3.5 million. All consideration has been or will be paid to BlockStackers. The number of shares paid is contingent on the continued employment of two key employees and the achievement of performance milestones relating to traffic on the web site. - 121,212 shares issuable upon the closing of this offering; - 60,606 shares issuable seven months after the closing of this offering; - 40,404 shares issuable 12 months after the closing of this offering; - 80,808 shares issuable 12 months after the closing of this offering provided that the milestones in the agreement have been met; - 40,404 shares issuable 24 months after the closing of this offering; and - 80,808 shares issuable 24 months after the closing of this offering provided that the milestones in the agreement have been meet
    • Correct me if I'm wrong, but isn't the stock at danger of being de-listed if they don't get it back over $1 in 6 months or something?

      If they delist, isn't that like chapter 11?

      • Re:VA Linux (LNUX) (Score:2, Informative)

        by vanguard ( 102038 )
        Being delisted means that they are not traded on the larger stock exchanges anymore. It's a huge knock on the company's prestige but it's not at all like chapter 11. They company will still be in business and it will be traded on the "pink sheets". There are markets filled with companies like VA Linux on those exchanges.

        There are a number of things that must happen to get delisted. Some of them include trading below $5 for an extended length of time, having a market cap under $50 million, etc. (I don't pretend to have them memorized. I'm just fimiliar with them because I worked for a failing company.)

        Anyway, even with all the methods of staying listed it seems to me that VA Linux is in danger, just like you pointed out.
        • I asked this in another thread several days ago.

          Someone pointed out that NASDAQ has relaxed these rules quite a bit, because otherwise they would have no stocks to trade at all.

  • As Much as people hate redhat (Score:5, Insightful)

    by ConsumedByTV ( 243497 ) on Wednesday September 19, 2001 @04:42PM (#2322142) Homepage
    They are giving a good name to Linux in a few ways. If we didnt have them, linux would still be here (even for the better some might say) but I am sure that it would take people some time to adjust. They need something to hold onto in their head as a sign of quality. Colors and shapes comprise good names, just like a logo that can be drawn in the sand is constant reminder of how it (a company name) sticks with us. Redhat might not be the best (or perhaps you think they are) but they are doing something with Gnu/Linux that might have taken years to do. Thank them for that.
    • This is insightful? It isn't even coherent! RedHat hasn't brought Linux into the mainstream, Linux advocates working inside corporations have. Nice karma whoring though.
    • Well red hats are better than cutsey penguin's,
      that's for sure.

      What I'm really looking forward to though, is
      having a pronouncable name for "postgresql".
      We can say "the RedHat Database" now, and
      people will know what we mean...

      (Do we hate RedHat? I'm getting a little tired
      of releases as buggy as Microsoft products, but
      but I wouldn't say I hat them...)
  • I don't object to Redhat making some money (or losing, in this case, but not for lack of trying), but the price for Redhat 7 is really hard to believe. It's anywhere from $65-$80 everywhere I look (in stores). I remember the first time I bought Redhat 5.2, it was a MacMillan Publications release and only cost $30. When will we see other Redhat 7 distros appearing for less cash in local software outlets?

    And whatever happened to Redhat's 'discount' package, that comes with only the bare bones Redhat6 disc and an installation guide?

    • The base system has sticker of $39.95, I think you're looking at Deluxe Workstation

    • Re:Money issues (Score:3, Informative)

      by quartz ( 64169 )
      Here [compusa.com]'s a cheap one for you. And if I remember correctly from last time I was in a CompUSA store, 7.0 was even cheaper.
    • I don't know where you're looking, the most I've seen the regular version is $39.95. Maybe you are seeing the Deluxe version that is like $79.95, and the 'Professional Server' version is $139.95...

      So, I think you're looking in the wrong places...
    • Compared to the other server-grade OS (win2k) this is more than reasonable - 2k server runs $800 off the shelf, I think. (never bought it that way) You have additional licensing fees on top of that. And you get some pretty good support from RH if you pay.

      You can get the distro images for free from their ftp site if you have the bandwith. So the price isn't that bad.

  • Now ... (Score:2, Funny)

    by halftrack ( 454203 )
    ... if they could convince AMD not to call their future CPUs for AthlonXP [cnet.com] rather AthlonRedHat.

    • Re:Now ... (Score:3, Funny)

      by j7953 ( 457666 )

      Maybe AthlonRH might be a more realistic choice? At least AMD could claim it's not related to Red Hat but stands for Athlon Radiating Heat.

  • I just don't know why in last quarter's report Red Hat loss $400,000 (as I recalled) and says break even because the loss is less than 1c. Now they say loss $100,000 and then loss 2c per share. How's the math?

    Then, FYI, this $100,000 loss doesn't include one-time charges and/or costs which would total the loss to $55.3 million. Is there any "accounting tricks" applied to spiff up the reports or what?

    Your answer is appreciated. Thanks.

    • It's impossible to make money selling Linux. That's the accounting trick!
    • No, not really. Most of those one time items were intangibles.

      See, when a company buys another company, the premium they pay to what the assets of the company are is called goodwill. This goodwill is considered an asset on the buying company's balance sheet. The goodwill gets "used up" over a few years, and gets expensed off, that is, deducted against income (amortizing).

      In other words, most of it wasn't "real" money. The only important one-time charges were the severance expenses, that was real tangible money that had to come from somewhere.

    • The article said that it was also 0 cents this quarter, the 2 cent loss was the year-ago quarter.

      As for 100,000 vs 55.3M loss, it's related to one-time charges and write-offs... i.e. serverance packages that won't re-occur (at least for those people already laid-off).

  • Before getting carried away... (Score:5, Insightful)

    by augustz ( 18082 ) on Wednesday September 19, 2001 @04:48PM (#2322178)
    Before getting carried away:

    Red Hat's second-quarter net loss was $55.3 million, on revenues of $21 million.

    Granted, they've got PR speak down, and slashdot falls over itself reporting these "breakevens". But they've systematically excluded items in almost every quarter they have reported results, and the number slashdot reports are pretty bogus. Most other sites AT LEAST report generally accepted number (GAAP) along with the PR numbers which exclude all losses.

    So let's hope they do well, but please for the love of god lets stick to numbers that are not simply pulled from a hat. And despite what folks like to say about how this gives insight into their business, these numbers are by and large bogus.
    • Excluding one time expenses is GAAP. Moderators, don't fall for this troll just because he used one correct accounting term.

      • Excluding one time expenses is GAAP.

        That is very true.

        However, being in business myself, I know that a loss is a loss is a loss. It doesn't matter what you call it, it doesn't change the fact that there's more money going out the door than coming in.

        Just because things look good on paper doesn't really mean that much. What really counts is how much money you have in the bank.

        So, at any rate, it's good that I swiched to Debian last year. :-)

    • Still, I do not expect this large loss will make the slightest impression on all the people who keep telling me that "Red Hat makes tons of money selling open source." It happens here on /. and on other open source boards as well, and demonstrates a "reality distortion field" that would make Steve Jobs proud.

      Open source has not yet found a viable business model. The reason open source has seemed to move forward in the last few years is because investors have poured large amounts of money into it without getting anything in return.

      Tim
    • yeah I noticed that too. Their rate of loss is 59% higher than that of 2nd quarter 2000. Their cash reserves are also drying up pretty quickly. Kinda sucks, but unless IBM gives another huge cash infusion I don't think that they have much time left.

      check it out for yourself [ccbn.com].

      • >>Their cash reserves are also drying up pretty quickly.

        Wrong.

        Companies with no cash reserves don't buy back shares like RedHat is doing now. How exactly would they buy the shares without cash?

        They increased their cash reserves by 5 million. From 294 to 299 million. RedHat has a large pot of cash that they are sitting on. This is primarily how their current stock price can be justified in light of decreased earnings and a somewhat lacking business plan.
        • you'll have to correct me if I'm wrong, but from how I read it [ccbn.com], it states:

          Cash and cash equivalents $72,459,166 down from $109,989,741 a year ago. They started those quarters with $85,212,830 in 2001 and $248,429,962 in 2000.

          and Total current assets are $144,055,087 down from $179,681,174 a year ago.

          and posted a Net loss of $27,559,775 vs $17,422,183 a year ago. Thus a 59% increase in net loss. Of course, once you "adjust it" they're breaking even, but that's cheating.

          So unless I'm reading it wrong, that's how I see it.

    • A large chunk of that was

      to account for $33.8 million in costs related to acquisitions made in prior periods

      This is typically used to align the books with the 'book value' of any companies they bought. I.E if they paid $100M in stock for company X, yet company X only had $20M of assets on their books, the difference $100M-20M = $80M, must be written off get get all the books to balance, they are not out of any cash, just more outstanding shares of their stock.

    • They will eventually have to report the GAAP numbers. There was an article in the Washington Post dead tree edition a few Sundays back talking about some of this trickery. As you indicate, this is just PR. The official numbers will happen within a few weeks. A little group known as the SEC demands that the public eventually see those numbers.

      BTW, I agree with you. Things are not as rosy as the article or the slashdot 'editor' claim.

    • Re:Before getting carried away... (Score:4, Insightful)

      by miniver ( 1839 ) on Wednesday September 19, 2001 @05:58PM (#2322474) Homepage

      Before you get too carried away...

      Red Hat's second-quarter net loss was $55.3 million, on revenues of $21 million.
      Granted, they've got PR speak down, and slashdot falls over itself reporting these "breakevens". But they've systematically excluded items in almost every quarter they have reported results, and the number slashdot reports are pretty bogus. Most other sites AT LEAST report generally accepted number (GAAP) along with the PR numbers which exclude all losses.

      Apparently you haven't been paying attention to the way accountants keep track of earnings for publicly traded companies. RedHat did the same thing that everyone from Microsoft and GM on down do: they reported their earnings and losses for the quarter, as well as any other earnings and losses that are required to be accounted for in the current quarter, even though they may have been accrued in previous quarters and years.

      To get a better picture, go to the SEC EDGAR database [sec.gov] and search for Red Hat's latest 10-Q filing (the latest one I found [sec.gov] was filed in July for the quarter ending May 31st, 2001). If you read through the 10-Q filing, you'll see that in any given quarter, half of Red Hat's expenses are from the write-down of investments (ie: the stock market has tubed in the last year) and the amortization of goodwill and intangibles (ie: artificial value of companies during a merger). This is Generally Accepted Accounting Practice (GAAP) -- Red Hat traded millions of shares away to aquire Cygnus and other companies, and instead of realizing all of the associated costs of those mergers in a single quarter, the costs are spread across several quarters.

      Look at the bottom line -- at the beginning of the quarter, Red Hat had $72,459,166 in the bank, and even if they lost $24 million, that still leaves them with $48 million in the bank, and these paper losses will be ending in another quarter or so, which will leave Red Hat breaking even. Pretty good for any tech company in the current economy.

      • Right, so what they did is prop up their books in past years with artifically high numbers, and then rather being called on those numbers, they issue PR which basically sweeps that stuff under the carpet. Damn lameness filter made me take out a lot of other points...
  • From article:
    ...Szulik is right in his statement...

    From Everything2:
    Nothing Found
    Sorry, but nothing matching "Szulik" was found.

    If you Log in you could create a "Szulik" node.

    Doh!
  • In a cycle of economic downturn, where IT departments are waiting to determine where to spend their budgets, this is not a bleak forcast for Red Hat. Many IT managers have about a 2-3 year cycle on when they purchase new equipment, and after a large buying period prior to Y2K, it's not inconceivable that their new purchases will start happening this year or the next.

    This cycle, combined with the current economic downturn means a lot of technology providers are not spending large budgets, and new servers are not popping up. When the buy cycle returns, and IT managers look to purchase the systems that will give them the best bang for the buck, Red Hat will obviously be near the top of those systems.

    XP's release will also probably send many systems managers looking into solutions, and may also send RedHat sales upward. If the IT manager gets a new budget earmarked for XP, but decides to spend it more wisely, RedHat sales might see a boost. Then again, it may also take a dent out of RedHat's sales, we'll have to wait and see.

    I think this is pretty good news (considering the state of the economy) for RedHat.

  • This is a company that mainly lives on others work. If it isn't going that great for them, how are things going for those companies who actually has to make products themselfs and live on them?
  • Comment removed based on user account deletion
  • After that date, all bets are off, however... How might the aftermath harm/help Linux/Open Source? Seeing this story [yahoo.com], I expect Microsoft's IIS is now a very serious liability. Also, MS plans to continue on schedule with XP rollout in NYC...
  • While Red Hat says they almost made a profit, its only by excluding other, huge expenses. 37.2 million was excluded, the net loss is 55.3 million. The number to look at is that their earnings went down 15%. This is bad news for Red Hat. Someone in another post said that the price of Red Hat has gone too high. I disagree, you buy one and make copies.
    • Most of their accounting loss is a result of writing down intagibles and goodwill. One of the reasons of this is that previously Redhat has aquired several companies. Whenever they aquire a company they have to account for the difference between the companies assets (cash, property, shareholdings, etc. etc.) and the price they buy the company for. Typically that is accounted as "goodwill" (on the assumption that part of the reason that you are buying the company is that it's customers will buy something from you again).

      Goodwill props up the assets side in a companys financials, and that is good. But it has to be written down over time. Sometimes a company will write it down as slowly as possible, in order for it not to affect their earnings. In this case Redhat has chosen (or been forced to - I don't know what rules are used in the US to determine when they have to write down goodwill) to write down a significant amount in one quarter.

      Yes, this is a loss. But it is not a loss of cash, but of abstract, intangible values.

      In fact, according to their financials, at the end of this quarter, Redhat had 299,9 million USD in cash. On February 28 they had 302.7 million USD cash. So in the last 6 months, their cash position has only been reduced by 2.8 million.

      And if you look at total assets, you will find that their current assets are estimated at 428.2 million USD (of which 82.4 million are goodwill and intagibles), vs. 505.3 million USD (with 147.4 million USD in goodwill and intangibles) on February 28.

      This means that in the last 6 months, they have written down 65 million. Excluding the write down of intangibles, their assets have only dropped 12.1 million USD

      The difference between that number and the reduction in cash comes from reduced outstanding invoices and prepaid expenses.

      In addition, their liabilities now are slightly lower than 6 months ago, meaning that the picture is more positive that it looks (about 2.2 million USD difference).

      In other words, Redhat is doing very well considering the economic climate... And also that they have cash to run for many years at their current cash burn before they actually have to start making money.

      Also note that they have accrued a significant loss in the past which can be used to reduce their taxes once they earn money.

      (Disclaimer: I own a few Redhat shares. And the above should not be taken as investment advice. Go do your own research. Yada, yada, yada)

  • I'm sorry, but I just read the article in question, and this does not seem like a "Tiny" loss to me. According to the article (and you can read it yourself, provided it hasn't been slashdotted) RedHat had a net loss of $53 million. They reported a revenue of $21 million.

    Let those numbers sink in. That means that RedHat's revenue was less than half of their loss in the second quarter. And this bodes well for RedHat because...?

    Between this and the fact that RedHat's stock is at an all-time-low (just look at the charts over on Nasdaq [nasdaq.com]) we have some SERIOUS troubles for Linux. I wonder if Linus has heard about this problem yet?


    • > Between this and the fact that RedHat's stock is at an all-time-low (just look at the charts over on Nasdaq [nasdaq.com]) we have some SERIOUS troubles for Linux. I wonder if Linus has heard about this problem yet?

      I wonder whether Linus thinks Red Hat's share price is a problem.

    • I'm not sure what you mean by:

      "Let those numbers sink in. That means that RedHat's revenue was less than half of their loss in the second quarter. And this bodes well for RedHat because...?"

      The article quoted above says that Red Hat met analysts expectations for the quarter, which usually means they were right-on in their guidance and predictions. In the current market, this shows good financial leadership in a company, and usually makes shareholders happy. (FYI - RHAT closed up today.) This is certainly a GOOD thing for Linux, as it shows that a skillfully-managed company is being successful in the commercial arena, and IMNHO, not "SERIOUS troubles for Linux" as you are purporting.

      Not to be picking nits, but I'm sorry -- I don't see anyone calling this a "tiny" loss.

      I just don't see any grounding for your statements.

      Ken Crandall

    • i think Linus is more concerned about TMTA

      (just look at the charts over on Nasdaq [nasdaq.com] )
    • Most of that is writing down goodwill and intangibles. It is not cash expenses. Which is important. If they'd lost 53 million cash in a quarter, they'd run out of money quickly. But as it is, they hardly dipped into their cash reserves this quarter.
  • Red Hat would make a much bigger profit if they implemented a licensing scheme similiar to MS-Linux (http://www.mslinux.org).
  • Yeah, they're doing such a good job that the Young and Buckley are offloading shares [yahoo.com] as fast as they can.

    • You can make that claim of every company. It's simply a good idea to diversify as much as possible, even more so in this type of market.

      Look, Oracle [yahoo.com] execs are selling stock too? Should we panic over a company who has an 80% profit margin? Let's all tone down the sarcasm a bit, it's not pretty.

      • diversify on a weekly/daily basis? thats odd...

        oracle execs diversify and publicly announce which companies they're diversifieng in and what boards they're on as well..

        is this money being used to pay salaries or exchange for something? cant possibly be diversification.. not enough money to spread out, and it is expensive to sell less them 5,000 shares of stock under 5.00 a piece that many times..
    • With those stock sales that frequent, it is as if hey is paying peoples salary with that money..

      crazy

  • Redhat slightly recession proof? (Score:4, Interesting)

    by Ian Bicking ( 980 ) <ianb@nOspaM.colorstudy.com> on Wednesday September 19, 2001 @05:09PM (#2322289) Homepage
    I think (at least to some degree) that Redhat can do better in a recession than many of its (non-OSS) competitors. Some things do better in a recession, because they represent efforts to save money. Car mechanics, for instance.

    It might take a while to kick in, but Redhat potentially can do well because OSS software is so much cheaper than much of the commercial software. There may be arguments that it takes more manpower to deploy, and it's not turn-key so it takes longer to bring to market -- many of these arguments might be valid (at least some of the time). But the value of cash vs. the value of time might be shifting -- cash has become more valuable. Leaner endevours would be well served to use OSS.

    OTOH, if you really want to save money, why pay money for the support and the box? Linux is pretty much free. Still, even if I don't particularly care for Redhat (the distribution), I wish them well and am optimistic about their fate.

  • Ok, I paid for a full version of Win98, and use it about once every 2 weeks (when I need to transfer pictures from my digi-cam) It cost $75.

    I use RedHat (my distro of choice) 20 times as much as Windows. Let's say it's worth $300 to me, and I want to donate $100 to those who have worked on the software.

    Who do I give the $100 to? FSF? RedHat? Do I just go and purchase $100 of Redhat distros at Sam's Club?

    There might be a good answer to this question, but it's not in my O'Reilly book, and I've never bothered to look into it. So, my $100 is still in my pocket, when it could be doing some good helping someone who's a better programmer than I.

    Why isn't there more press on donation procedures? I know some people would get upset at RedHat ads (for donations) and such, but why not? Especially when they're facing tough times (like now) a couple of "Have Pity" ads on slashdot would do a lot of good.

    There are a lot of people with corn cobs up there butts who won't donate, and would yell bloody murder about requesting donations for software that should be free, but such idiots would just wrong. They aren't being forced to donate. And that would be that.
    • ask redhat if they accept donations, or if you buy distros, buy the distros directly from them. Retailers probably will pocket most of the money that you give them(they gotta make a profit too). So if you're concerned about 100% of the money you are spending going to red hat, just do one of the 2 above.
  • I would really love it, and for a long time it has looked as if it is possible, by offering support, training and other stuff that is really valuable to "sell",and still keeping with the open source idea.

    But. I can't help but think that it is likely to be the same kind of trick we play on our own minds as it was with online advertising, e-business in general and the whole dot-com thingummy.

    Online advertising - I still say that could have worked to some extent if it wasn't so overhyped at the start, and if the stupid mofos would have stuck to banners that don't annoy anyone.

    E-business... well, the ones that succeed is 99% businesses that are well established offline first... with some remarkable exceptions of course. :) And slowly people starts to realize that you don't make money just because you are online. About time. You missed breakfast...

    Dot-com. Well. Um. No comment. Everybody believed in it. Whatever it was. Noone knew...

    Well, anyways - is commercial Open source a "hoax" too? Some parts will most definetely survive, I think. Companies that do open source because they need, or at least can use, the product themselves, for instance. That is beautiful.

    But taking a product and providing services and knowledge about it for money? Hmm... actually, that isn't so stupid. If cars were free, we'd still have mechanics for the non-technical dudes. I guess that the free car of today has too little marketshare, a bit suspect reputation, and has the steering wheel on the wrong side. A bit awkvard for most, in other words.

    This could change. I hope it does... :)

  • If they're doing so well, what's up with this? 1,500 shares bought by insiders in the last year, 1.7 million sold. [nasdaq.com]



    not exactly a killer vote of confidence.

    • Yes, but if you look here [yahoo.com] about 5 million Microsoft shares were sold in August alone.

      So by your logic, M$ must be doing about 30 times worse than Redhat.

    • Within the last year, Nasdaq was trading at extremely inflated levels. That people choose to sell at those levels isn't exactly very surprising. When the economic climate starts improving again I bet you'll see more than enough insiders buying back shares they sold the last year, but for a fraction of the price.
  • As RedHat might be considered by many people (and especially those not currently using Linux) as the flagship of the distributions this is really bad news.

    I am afraid that news like this makes it harder for businesses to adopt Linux. It makes a huge difference to know that your operating system vendor is still in business after 1,2,5 and 10 years.

    So, I just sincerely hope Redhat, SuSE and the others get their business going well and start making nice profits.

    -- jukal at cyberian.org [cyberian.org]



  • Odd that Slashdot, a VA-owned website, will report on Red Hat's losses, but somehow neglect to inform their readers that VA Linux Systems stock has finally slipped into penny-stock territory [excite.com] as of yesterday, closing at a whopping $0.95/shr.

    But wait..that would mean that VA is fair and impartial when it comes to informing the Linux community..hmm.

    • Uh oh, man, prepare for a bitchslapping.

      • Actually, Bowie J. Poag is a well known VA hater. These are the kinds of posts that we have come to expect from him in the past couple years...

        If he didn't post we would worry that he was ill.

    • Why would it make the slightest bit of difference to me, an Average Slashdot Reader, what some suits are paying for imaginary pieces of some Linux company? I don't own any VA stock. If I wanted that kind of information, I'm sure I would know where to find it.

  • Red Hat is terrible at marketing. (Score:5, Interesting)

    by Futurepower(tm) ( 228467 ) <M_Jennings @ not ... futurepower.org> on Wednesday September 19, 2001 @06:19PM (#2322541) Homepage

    I feel really uncomfortable when people wonder whether open source software can have a profitable business model.

    My company makes plenty of money by supporting the computer operations of businesses. My company provides the software at cost, without profit. The cost of the software is small compared to the support costs for training, hardware and software glitches, and specialized programs.

    Open source software is more reliable, but support is still needed.

    Red Hat, and other companies that provide support for open source software, are unbelieveably terrible at marketing. They just have no clue. That's part of the reason they have trouble making money.

    If Microsoft were as bad as Red Hat at marketing, Microsoft would still be trying to sell Microsoft Basic. What's worse, Red Hat is better than most of the others at marketing.

    When I look at most open source projects, I can't even understand the home page! Even the home pages are written with the idea that you work on the project, so you already know everything.

    If you have a project involving GNU/free software, and need help with communicating to your prospective users, I may be able to help, as a volunteer. Send me email. Even when software is free, there is still a need for marketing communication.


    Want to understand the situation in the middle east? Read What Should be the Response to Violence? [hevanet.com]. Most important lesson? Understanding the corruption in the secret agencies of the U.S. government. They have a conflict of interest; they are supposed to help prevent trouble, but they get more money if there is more trouble.
    • If Microsoft were as bad as Red Hat at marketing, Microsoft would still be trying to sell Microsoft Basic....

      They still do:
      Visual Basic [microsoft.com]

  • Microsoft.com infected with That Worm!

    http://www.microsoft.com/frontpage [microsoft.com]

    (From the Incidents mailing list)
  • I have purchased various RH releases three times in the past. Each time I found the same problems.
    Lousy bug database. Lousy support. Problems reported keep getting dupped out. Unless you pay the bug db doesn't work very well for you. It works but reallllly slow and doesn't show the hits very well.

    Their servers are not usuable to download with , again unless you pay.

    I just bought the product but the bad service turned me off. The lack of resolutions to failures I was having didn't help either.

    I thought they would do better but they forgot their beginnings in the name of greed.

  • Releases (Score:2)

    by Micah ( 278 )
    Well, last quarter when they earned $600,000, they released Red Hat 7.1, which may have helped their sales numbers. There was no distro release this quarter.

    However, 7.2 should come out shortly, and it will almost certainly drive their numbers up again.

    Not that distros is all they sell, but it does help and could easily be the difference between quarters.
  • Normally a story like that would have made at least passing mention to the layoffs RH is taking, if for no other reason than to make the institutional investors happy (because they'd see them as "belt tightening" or some such). But this one makes no mention of them. The closest it comes is saying they "restructured [their] operations".

    Could it be that the reporter doesn't really know that much about the company? Or possibly they don't want to draw any parallels with the others in the dot bomb crowd for fear of tainting RH's staggering $3.11 share price? Or maybe then someone would ask which areas did they cut (to make sure it was fat and not mussle that was being trimed) and then they'd have to explain that some of it was part of the very group that they had just mentioned was responsible for "[a] significant portion of that revenue"?

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