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Red Hat Software Businesses

Red Hat In Business News 239

jferg was one of the first people to write about the coverage in today's Observer in regards to the latest business happenings at Red Hat. The article touches on the launch of RH Advanced Server, but one of the most telling statistics was "Red Hat now has 90 percent of its 630 employees working to lure corporations looking to move their computing platform from expensive systems running on the rival Unix operating system to Linux, widely considered to be the more cost-effective choice."
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Red Hat In Business News

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  • Hmm... (Score:2, Interesting)

    by klocwerk ( 48514 )
    I guess it would make an easier move for a corporation to go from Unix to Linux, but imho Linux's real threat is MS/Unisys, not Unix.

    Guess I'm just another anti M$ shashdotter though.
    • "I guess it would make an easier move for a corporation to go from Unix to Linux, but imho Linux's real threat is MS/Unisys, not Unix."


      That may be true but I am sure it would be easier for a corporation to go from Unix to Linux.
      The real question for RH at this time is not what is the bigger threat but what is the biggest market oportunity. In this case and at this point in time I would say it would be getting businesses to switch from Unix to Linux IMHO


      "Guess I'm just another anti M$ shashdotter though."


      Aren't we all?



      • i'm not so sure i agree there. most offices/shops are filled with small pentium file/email servers. sometimes IIS servers crep up there and again as well. IMNSHO, this is the market that RH and Linux needs to be targeting. Linux systems, and *nix systems in general, are scalable. such that an email/file server that handles an office of 20, could quickly and easily be migrated to a system that handles 500/1000 users. throw a web server on there. add a database server. first, you're not spending upwords of 10k on software each time you add one, and secondly when an email system outgrows it's quad-xeon box, you can move it to a nice sun or alpha machine and keep it going smoothly. it's the same reason that java is suppose to be attracting people: portability and scalability in an open component based system.
        • I would love to replace our Netware file/print environment with Linux/Samba, but I still haven't found a suitable replacement for Novell Zenworks. I have to manage 2500 windows workstations, and without automated software distribution/inventory management, I can't do it.

          RedHat: If RHN worked for windows PCS the same way it does for my linux boxen, and I could run the server myself INSIDE the firewall, you can sell me support.

          • I would love to replace our Netware file/print environment with Linux/Samba, but I still haven't found a suitable replacement for Novell Zenworks.

            If the workstations are going to stay windows, try Altiris Express [altiris.com]. I use Zen 2.0 and am Altiris Certified. Next to Zen, Altiris is the best for workstation inventory/app delivery and adds workstation imaging. You could even use the Zen app packages with Altiris. One drawback is that it is for profit so there will of course be a fee. I don't know if you are MLA with Novell, but if not, then the cost of switching would be negligible.
          • What is your reason for wanting to do this? Just so you can say that you did? Are you having problems with your NetWare boxes? Novell doesn't force you to upgrade every time they release a new product, and with an environment with 2500 workstation the cost of NetWare shouldn't be an issue. You're either a medium sized business with a bit of money, or in education, in which case you qualify for deep discounts.

            Not only would you be losing Zenworks, which is great, but what about rights management for system resources? Samba just doesn't offer the fine grain controls that NetWare does.

            Now using Linux as an eDirectory server in a NetWare environment would be a cool choice... They work great for all kind of Internet related stuff (NEVER use BorderManager).

            Use the right tool for the right job. Usually if you go to work at a larger site and all services are delivered by servers all running the same OS, it's usally because that's all they know about or they have some strange religious devotion to the platform.

            The mark of a truely experienced SA is to know all of the options that are available from different vendors to solve a specific problem, what implications are involved in each of them, and untimately choosing the one that works the best with the least negative impact on existing systems.

            .

            • My reason for wanting to do this are many:
              1. Netware is expensive! Not as bad as MS, but we are shelling out serious, serious moneies for our support/upgrade protection agreeement
              2. With linux, I can do more things with the same hardware. For instance, I can run Domino on it (now we use AIX and NT for that)
              3. Novell is dying. A lot of the 3rd party apps we use require an NT domain to work properly. That means even more NT servers. Most of these apps work with samba.Many of these companie's tech support types don't even know what a Netware is!
              4. Novell is dying (part 2) Have you tried to staff competent Novell admins? They are getting hard to find. We already have a stable of AIX admins here, so staffing is less of concern.

    • by emil ( 695 ) on Wednesday April 10, 2002 @12:57PM (#3317438)

      If they were to get a hold of Openmail, they really might be able to slash MS right out of the server space - as long as they could keep MS from messing with the protocols.

      AFAIK, Exchange is the number one reason to have MS anywhere near the datacenter.

      • by nehril ( 115874 ) on Wednesday April 10, 2002 @02:38PM (#3318323)
        absolutely. I work as a consultant and get to see lots of different kinds of corporate environments. Everyone wants Outlook and shared calendaring, which means Exchange, which means NT Server/Active Directory, which means Why Not Replace Novell While We're At It, etc.

        the draw of the shared email/calendar/public folder/contacts cannot be understated. Nobody cares what's running in the data center, as long as they have groupware that doesn't suck.

        Evolution is the outlook killer, but until there's a real Exchange killer, linux servers will not get far past the web/database market. When redhat has THAT, the PHB's will start returning phone calls.
        • the draw of the shared email/calendar/public folder/contacts cannot be understated.

          Yes, yes, a thousand times yes.

          Will we have a true competitor to Exchange before it's too late? I guess we'll see.

    • Linux is not threatened. It will live on. Just like Linux doesn't threaten FreeDOS.

      _Red Hat_ may be threatened. But then, who cares? "Can't take the heat, get out of the kitchen."
      • I care, because the more people run Linux, the more likely it is that I can be paid to write software for Linux instead of Windows. Business isn't going to switch to Linux if there isn't a company behind the distro. RedHat is in a position to be that company, and so I hope they are able to make it.

        If they go under, Linux will continue, but not at the pace it has been so far.
    • Re:Hmm... (Score:4, Interesting)

      by 4of12 ( 97621 ) on Wednesday April 10, 2002 @01:01PM (#3317477) Homepage Journal

      I guess it would make an easier move for a corporation to go from Unix to Linux, but imho Linux's real threat is MS/Unisys, not Unix.

      You're half right. It is relatively easy to go from one of the high end flavors of UNIX to Linux. Reliable, familiar software at close to zero licensing costs that takes advantage of in-house UNIX experience is a no brainer decision for any corporation in that situation with a CIO that has a clue.

      The second part is reversed. MS has been hoping to climb up into the server room from the desktop, leveraging the dominance of various complicated lock-in file formats and protocols it owns at the desktop. It's been partially successful since Intel compatible hardware is cheaper relative to traditional high end UNIX RISC platforms. And, with Win2K, they've finally got reliability up to the point where they aren't laughed out of the room.

      But Linux is MS/Unisys' real threat, because while they focus on trying to climb up into the lucrative high end of the server room, Linux is coming up from behind, offering an even lower cost option than MS on Intel.

      If I were MS, I'd see the biggest problem being high end UNIX shops tunneling through the mid-cost option of Wintel to the even better option of lowest-cost Lintel.

    • Linux isn't at stake, RedHat is. Linux's threat is from apathy, not from another company. RedHat's threat is not having a revenue source. They can't be in a defensive posture, they have to be aggressive and go after the best possible customers - and customers using Unix are definitely in that category. Replacing MS systems means chores like migrating entire databases from MS SQL server to Sybase or Informix, hand-scripting all rules currently on an Exchange server, hand-editing new ACLs, and the such.

      Maybe we can turn this into an Ask Slashdot (although only 5% of the people who will chime in will actually be qualified to do so, I suspect) - are there any migration tools to automate the transition from MS based to Linux based services?

  • by Jucius Maximus ( 229128 ) on Wednesday April 10, 2002 @12:31PM (#3317221) Journal
    "Red Hat now has 90 percent of its 630 employees working to lure corporations looking to move their computing platform from expensive systems running on the rival Unix operating system to Linux, widely considered to be the more cost-effective choice."

    So does Red Hat have the way out [wehavethewayout.com] or the way in [wehavethewayin.com]?

  • Sliding sales... (Score:5, Insightful)

    by Totonic ( 549615 ) on Wednesday April 10, 2002 @12:34PM (#3317239)
    Do you think that the sliding sales, not only in Redhat but others as well, could be due to these factors: 1) An increase in broadband over the last couple of years by home users. 2) The popularity of ISO's days after a new release. Instead of going to the store to buy a distribution, I can sit on my ass at home and download three ISO's, burn em to CD, and have everything except documentation. Mandrake has the right idea IMO, with their users club or whatever they call it..Reaping profits through other means.
    • RedHat doesn't and will never make money from home users, so they don't care about home broadband. They make money, or at least try to, from business customers who need phone support because it is cheaper for them to ask for help then to hire or train someone to baby sit.
    • Totonic is right. Mandrake has a *great* idea. This is a bandwagon RedHat should jump on immediately. I would definitely join the Redhat club in a heartbeat.

    • Broadband had no effect at all. You could always buy package deals of RH's latest (and Slackware, Mandrake, FreeBSD etc..) for $5-10 online at copy shops like Cheapbytes.com and Walnut Creek, and it is included in just about every Linux for Dummies book.

  • that means that less than 10% of the company are developers. Quite a topsy-turvy situation for a software company.
    • by Indras ( 515472 ) on Wednesday April 10, 2002 @12:38PM (#3317277)
      Certainly better than Microsoft, which is 90% lawyers.
    • its not like you need more than a handfull (25) of good coders to keep redhat updated - not to mention its not like there making an office product although if they did could it ever become the basis for having them be like the M$ of linux?
      • its not like you need more than a handfull (25) of good coders to keep redhat updated

        No argument there, but what about support people? Based on 630 employees, if 90% (~560) of the people are selling, 4% (25) are developing, that leaves about 40 for support, janitors, admins, shipping, etc. I thought support was their primary revenue stream?

        Based on my experience, and paying $300/hr, they could barely serve. The guys I dealt with were good, but obviously horribly disorganized and way over-worked.
    • I would bet that this number is out there for the benifit of the stock spin-meisters. All of the developers are probably included in the 90%.

      How do you think Alan Cox feels about being lumped in with the "marketers"?

      ~Sean
    • by sultanoslack ( 320583 ) on Wednesday April 10, 2002 @12:46PM (#3317361)
      Redhat isn't a software company. -- No really. Redhat sells support; they sell consulting; they sell pretty much anything that you'll pay money for that happens to be Linux related -- "solutions" and whatnot.

      But they don't sell software. Sure they make a nominal amount of money off of selling boxes-o-software, but you just can't really sell something to geeks very easily that they can download.

      I think that a marketing shift like they're doing is trying to funnel more people into the parts of their business model that allow them to hire that many people. Pretty much they're a huge consulting firm that just happens to find it convenient to maintain a distro that they have control over.

      • This is true. The essence of this business, especially "free" software, is support. This is what IBM does, and does so well they're kicking everyone's butts. Redhat has a long way to go to beat IBM. But if they keep at it they can be the IBM of 2015, if they don't screw up too much along th way.
  • Uhh (Score:3, Insightful)

    by NiftyNews ( 537829 ) on Wednesday April 10, 2002 @12:35PM (#3317247) Homepage
    I'm no mathematician, but shouldn't 100% of your employees be making efforts to get the software sold (be it in marketing, coding good products, etc)?

    Where are the other 10% of the guys, on nap duty?
    • by funkman ( 13736 )
      I want the HR group (and other non-product related groups) working for my benefit - so I can concentrate on making a great product.

      (Not a red hat employee)

    • 90% are focused on getting new + corporate customers. The other 10% are working on sustaining old customers and making things nicer for new non-corporate customers.

      I assure you, no one is napping. My friends at Red Hat barely get any sleep at all.
    • Alan Cox should be doing whatever he feels like doing (as long as it's linux). Hopefully Red Hat management has the Tao, in which case he'll want to do things that will profit them.

      --Charlie
      • Last I knew, Alan eats, sleeps, breathes, watches rugby matches, drinks beer, socialises and probably even has sex with Telsa now and again (sorry for being personal).

        I suppose all this contributes towards a healthy state of mind for kernel development.
  • They are more interested in the fact that demand for Linux continues to grow. Market researcher IDC reports that Linux's share of new server operating system software sold in 2000 -- the most recent figure available -- was 27 percent, compared with 41 percent for Microsoft and 14 percent for Unix.


    So what is counted as Unix? Solaris and ____...

    • So what is counted as Unix? Solaris and ____...

      HP-UX, SCO-Unixware, AIX...and these are just the ones in use at my office...there are others.

      • I'm thinking they mean "everything thats like linux but isnt actually linux".


        And I wonder if their count was able to figure out which distros were linux even though their name doesnt have linux in the title. Or vice versa.

      • HP-UX, SCO-Unixware, AIX...and these are just the ones in use at my office...there are others

        Probably counting BSD and its derivatives (including OS X) in there as well. A more meaningful number would be FreeNIX vs. Non-FreeNIX vs. Windows.

    • AIX, NetBSD, HP-UX, OpenBSD, Irix, and FreeBSD...
    • Re:What is "Unix"? (Score:4, Insightful)

      by dnaumov ( 453672 ) on Wednesday April 10, 2002 @12:46PM (#3317358)
      What bothers me more, is the way the article is writted. OF COURSE Windows server software sales are higher then those of Linux server software. It's because 90% of Linux servers are being installed from CD's burnt by system administrators themselves, seeing as Linux is free, DUH! It's a waste of time to say that 41% of all server software sold in 2000 was done by MS, while only 27% is Linux. The "sold" part is indeed true, but if you look at this from the "amount of new servers installed" point of view, the whole thing turns upside down.

      The article implies that RedHat tries to make money by selling RedHat software to large corporations. That's not entirely true, selling software has ALWAYS been only a fraction of things providing RedHat income. "Services" is mostly support. Corporations want support, support sells, thus, services makes money. Simple.

      The only problem with selling support that I can see is the "ethical" side. GNU/Philosophy tells us we should be selling services and software support to people who use our software. The side issue is, if you really DO make great software, why would anyone buy your support ? Do you have to specifically make you software buggy so people can ask you for support and pay ?
      • Well, it is an of course. How many boxes of Linux do you need for your server farm?

        How many boxes of Windows?

        Of course that may not be the way they are counting ...

        P.S.:
        You don't need to burn a separate CD for each server. That's wasteful (of time, basically). You just need one, and a backup. Maybe an offsite backup too, but the product is cheap enough and available enough that that's probably overkill.

      • The only problem with selling support that I can see is the "ethical" side. GNU/Philosophy tells us we should be selling services and software support to people who use our software. The side issue is, if you really DO make great software, why would anyone buy your support ? Do you have to specifically make you software buggy so people can ask you for support and pay ?

        Ah! Support and ease of use are linked...but not in the way you are thinking; making a product easier to use does not reduce support demands, it increases them .

        Does that make sense? Here's one example, though after checking with other support departments it seems to be universal.

        Back in the stone age, I worked Technical Support for a year and then trained new support techs, ran a testing lab tracking down issues discovered in support, as well as testing and debugging before releasing the software.

        The company's main product was a complex, hardware-specific, DOS utility that required the users to fiddle around in hex to figure out the optimal way to use it. Needless to say, our sales were low.

        In support, the questions were fairly hard but there were only a half dozen of them...so once you learned the answers, helping the customers was quick and fairly painless -- that, and the fact that the timid customers were scared away before even buying the program.

        Though most customers never called, for each box we sold we would get about one 5 minute call.

        Even though this was the case, the number one request we had was a tool that would auto-configure the program. That sounded like a good idea, after all if it installs automatically the number of calls would drop and the product should become much more popular. So, we did it. After a year of hard work and tweaking, we released an automated version that did such a good job that our chief programmer found it very difficult to hand tune any better results.

        We released the new version and it sold very well. The half dozen types of calls we were getting vanished, and in thier place we ended up with two different types of support requests;

        1. "Where is that 'Any' key again?"
        2. Damn difficult problems that even the chief programmer would spend weeks figuring out.

        For every box sold, we still recieved about 1 phone call, but now each call averaged about 15 minutes .

        After watching the TS managers and a few other departments struggle, they were able to cut the average call time down to about 5 minutes again. It was not unusual to hear that some calls would now last a few hours with follow up that stretched over a few weeks. Yes, quite a few of those calls were because of real problems but it didn't take us long to track them down and fix the really nasty ones. The ones that remained were typically due to broken hardware or hardware/software that was Broken As Designed. More and more time was spent finding how other products failed, and then patching around the bad behaviour in ours. (Also known as "It's not our fault, but it is our problem.")

        I have no doubt that RedHat will do well with the support model, even if they continue to make thier 'free' product as easy to use and as defect-free as possible.

    • Sun is the number 1 high-cost platform that RH can effectively attack. At the midrange, RedHat can effectively claim to run on faster hardware than Solaris, at a lower cost.

      At the high-end it is likely that linux is not feature competitive, but at the low and mid-range, RedHat can effectively market.

    • I imagine:

      • hp-ux
      • aix
      • irix
      • sco

      PS. I would have capitalized those as necessary, but the lameness filter bit me in the ass.

  • by s.a.m ( 92412 ) on Wednesday April 10, 2002 @12:38PM (#3317280) Journal
    Lets look at it this way. They've got the big name companies saying that they're using RH. However as the article states, they didn't pay for a copy of RH for every server. They may buy a couple of licenses and then get the ppl at RH to provide some service.

    They need to expand their business, and the way to do that is to go out and let people know who you are and what you can provide them. We have seen from the article that the software itself isn't sustaining them. They need to get the services division up and running and racking more money.

    We've all joked about MS having a huge marketing dept and how their product sucked. Now look at RH, their product doesn't really suck, lol barring the RH Linux sucks comments. So if they put the same marketing force out there they might be able to increase their revenues.

    I say it might turn out to be one of the best things they've done...or it may bomb and send them back to the drawing board. But either way, it's a start.
    • Uhh... what we sell to big partners like this are not "1000 shrinkwrapped copies of RHL".
    • Red Hat is starting to branch out into specialty products, e.g., the Red Hat database server. This is basically a packaged job based around the latest version of Red Hat, and a good copy of PostGres. But they have it nicely packaged, and they market it as a good solution at > $2,000. Presumably this comes with support.

      They probably also have upgrade contracts available for the people who buy these. You wouldn't need to save too many hours for that to be a reasonable price. It's not reasonable for me, because a part of what I want to be doing is learning how to build this, but for a company ... quite probably yes.

      They are selling a non-Linux embedded OS, for places where Linux won't fit. There will always be places too small for Linux. It's an open source OS, I think it's even GPL, but who's the expert in how to use it? Where does everyone else get training?

      They really need to work on their advertising though. If they advertise that what they provide with the distribution is support, then people will expect that this is what they would get if they paid for a support contract, and I sure hope that isn't true. O boy do I...

      The "support" that comes with a box is basically how to understand the words on the screen. Maybe a few of the most common glitches that occur. Their real support of the distributions is the error patches and updates that they release. And the major benefit that they provide is a consistent set of applications that work together. They need to clearly separate this from the support that they want people to pay extra for.
  • It may just be that building large publicly traded coporations is not the way to go with open source software.

    I'm no economist but I see no reason why this should be a terrible thing.

    Personally I don't care how corporations fare. I care how individuals fare.

    If individuals can succeed, without a corporation then I think that is better anyway. Large organizations tend to carry along overcompensated freeloaders. (Read CEO, CFO, etc.)

    I would like to see an economy where individuals are compensated on their merits.

    Like I said, I'm no economist and I don't have all the answers but I don't understand why I see articles that intimate that Open Source may fail because it does not work with the old business model.

    In my eyes it is the old business model that is failing and a new one needs to be found.

    .
    • by leviramsey ( 248057 ) on Wednesday April 10, 2002 @01:08PM (#3317531) Journal
      It may just be that building large publicly traded coporations is not the way to go with open source software.

      Exactly.

      I'll take it one step further. Large corporations are not the way to go with the Internet in general.

      The Internet is a naturally decentralizing force. At the protocol level, it's amazingly decentralized, by design. The tendency is for anything it touches to be decentralized.

      Consider software. Open source is the ultimate in decentralized software. Could Open Source exist in anything approaching its current scope if there were no Internet? To be blunt, it couldn't. Look at the progress of the GNU project in 1993, the midpoint of its life to date. This was also just before the great explosion in the 'net.

      Consider media. Ten years ago, the average home in the US got, what, 30 channels of TV, plus a newspaper and a few magazines. Now, there are thousands of websites, each offering a different focus and a different point of view.

      Consider entertainment. Ten years ago, if you wanted to distribute music on any sort of scale, you had to go to the RIAA or to an indie label that was limited in its reach. If you wanted to have your writing published, you had to go to a publisher of some sort, or pay exorbitant fees to a vanity press. And let's not get started on motion pictures. Now the Internet is allowing real distribution of entertainment media at huge savings (especially when P2P is taken into account).

      As the Internet becomes more interwoven into business, business will decentralize. As business decentralizes, wealth and power will decentralize.

      In short, it was the great fallacy of the 1990's that you could become rich thanks to the Internet, the dominant effect of which, ultimately, is decentralization.

      • I disagree. (Score:5, Insightful)

        by FallLine ( 12211 ) on Wednesday April 10, 2002 @02:30PM (#3318261)
        I'll take it one step further. Large corporations are not the way to go with the Internet in general.

        The Internet is a naturally decentralizing force. At the protocol level, it's amazingly decentralized, by design. The tendency is for anything it touches to be decentralized.
        That does not follow. Just because the NETWORK infrastructure CAN support decentralization does not mean that it WILL. Yes, decentralization allows for niche markets to develop that are otherwise not possible. However, it simply does not follow that ALL, or even the bulk, of commerce will follow that trend. Put simply, a well run larger company is often able to put things together more efficiently than a small company. Take, for instance, the PC industry. There is nothing with putting together a PC that requires or demands a large company per se. Virtually anyone can buy the necessary pieces and put them together. However, we have a handful of very large companies (e.g., Dell, IBM, Gateway, etc.) that have something like 95% of the market and a bunch of smaller niche firms fight for the remaining 5% (and barely managing to stay in business). The reasons are many, but amongst others, the larger firms are able to develop the economies of scale to do it for significantly less AND generally offer better service for most customers. Thus the larger firms continue to dominate. The internet hasn't really changed this much either, quite the opposite in fact.

        Consider software. Open source is the ultimate in decentralized software. Could Open Source exist in anything approaching its current scope if there were no Internet? To be blunt, it couldn't. Look at the progress of the GNU project in 1993, the midpoint of its life to date. This was also just before the great explosion in the 'net.
        And yet what has it done for consumers? Relatively little.

        Consider entertainment. Ten years ago, if you wanted to distribute music on any sort of scale, you had to go to the RIAA or to an indie label that was limited in its reach. If you wanted to have your writing published, you had to go to a publisher of some sort, or pay exorbitant fees to a vanity press. And let's not get started on motion pictures. Now the Internet is allowing real distribution of entertainment media at huge savings (especially when P2P is taken into account).
        Here again, you focus too much on the delivery protocol and ignore the surrounding facts. While the internet and technology may technically enable artists to remove the so-called middle-men from the actual act of transfering the music/data, it really doesn't make RIAA or its respective labels any less relevant. Their function is primarily one of marketing and capital/risk taking. Even if distribution changes radically (which I could well argue against), RIAA continues and will continue to dominate the industry.

        Consider media. Ten years ago, the average home in the US got, what, 30 channels of TV, plus a newspaper and a few magazines. Now, there are thousands of websites, each offering a different focus and a different point of view.
        Again, this is not terribly different than the PC OEMs. We have the emergence of MORE choices amongst major companies, that continue to retain some 95% of the market, and a bunch of little guys fighting over scraps. The technology may bring offering choices more into the cost effective region, but there's nothing to say the major media conglomerates will not dominate. The major companies enjoy many significant advantages over the little guys. In any event, there's no real significant decentralization happening here if you measure it as consumer mind/hour share or in dollar figures, just the emergence of increased choice.

        In short, it was the great fallacy of the 1990's that you could become rich thanks to the Internet, the dominant effect of which, ultimately, is decentralization.
        Here again, I disagree. While I was no cheerleader of the DotComs, the fallacy of the internet WAS that you could get rich quick without really working for it and without having to generate any real value for society...it was thought of as more of an act of arbitrage than anything else. There is still money to be made by exploiting the benefits of the Internet, but it requires some sanity, risk taking, honest to god effort, and willingness to scrounge for capital and take on all the nay-sayers.

      • Consider software. Open source is the ultimate in decentralized software. Could Open Source exist in anything approaching its current scope if there were no Internet?

        Unfortunately most open source software these days appear to be centralised at SourceForge. That's a massive weak spot that I worry about sometimes.

    • I would like to see an economy where individuals are compensated on their merits.

      And how does Open Source software compensate individual coders based on their merits? Seems to me that Open Source is geared towards not compensating *anybody*.
    • Large organizations tend to carry along overcompensated freeloaders. (Read CEO, CFO, etc.)

      Do you have any supporting arguments/ Yes, CEOs make poor engineers. There's a culture within Slashdot that assumes if someone doesn't have anythign supremely technical to offer they are useless. But experience at a lot of tech companies shows most engineeers also make extremely poor CEOs.
  • by xrayspx ( 13127 ) on Wednesday April 10, 2002 @12:41PM (#3317314) Homepage
    But does this actually lend some amount of truth to Microsofts stance that Linux is only really gaining the marketshare that is being lost by proprietary Unix systems? If RedHat is concentrating on stealing commercial Unix accounts, rather than getting either new businesses or MS shops, it would appear so.

    This isn't bad. Commercial Unix is the easiest target for RedHat, it's far easier to convince someone to drop AIX off their 390 and replace it with RedHat than it would be to convince them to ditch Windows on 5e10 little servers. Especially in a "Microsoft Shop" type culture, which is unfortunately where I spend a lot of my time.

    My belief is that RedHat has as much chance of success as the next company, and if they need to steal business from Sun, Compaq, HP, IBM to do it, so much the better. At least the customer can still get their hardware from the hardware co's and get their software from RH, best of both worlds.

  • by Baki ( 72515 ) on Wednesday April 10, 2002 @12:44PM (#3317334)
    Of course "UNIX" (whatever that is, Solaris, AIX, FreeBSD?) is an easier target than Windows. Still I think it is wrong to focus on the 'easy' targets; in the end it does not help Linux (including Redhat) if UNIX as a whole (including Linux) looses marketshare. The outside (Windows) is what we must gain from.

    An internal healthy competition in the Unix camp is not necessarily bad, but if the UNIX camp is primarily focussing on getting each other, all will die soon. The only long term hope for survival is to withstand or push back the outside (non-unix).
  • Slow sales? (Score:4, Informative)

    by digitect ( 217483 ) <digitect&dancingpaper,com> on Wednesday April 10, 2002 @12:45PM (#3317345)

    I spent half the article waiting for the writer to provide some facts, but by the end, there still weren't any.

    She says:

    Red Hat now has 90 percent of its 630 employees working to lure corporations looking to move their computing platform from expensive systems running on the rival Unix operating system to Linux.

    Does this mean RedHat is moving all their employees to the marketing department? Does it mean everybody is told to make 9 cold calls a day? All we're given is the typical investor information, share price, projections, etc., but little information about how the business plan is working or changing.

    Frankly, the few real facts that are provided show a mixed bag, hardly worthy of the article's pessimistic title. Yet another Linux story trying to make news rather than report it.

    • It's kind of a meaningless statement. I read it to mean that 90% of the 630 are working on this -- some are in development, some in sales and marketing, some on project management, etc etc.

  • by fleegle ( 572523 ) on Wednesday April 10, 2002 @12:46PM (#3317356)
    Isn't that just the regular distro without all the man pages and howtos?
  • Acquisition target? (Score:2, Interesting)

    by Mannerism ( 188292 )
    As the article points out, it's hard to make money selling a free product. IBM is likely to succeed with Linux because they can sell the hardware, non-free software, and (most importantly) the services associated with it. Red Hat might do best if it joined the HP-Compaq family, which might be the best candidate to challenge IBM on the Linux front (especially with Oracle as a partner).
  • It's about time (Score:3, Interesting)

    by Darth RadaR ( 221648 ) on Wednesday April 10, 2002 @12:58PM (#3317459) Journal
    "Red Hat now has 90 percent of its 630 employees working to lure corporations looking to move their computing platform from expensive systems running on the rival Unix operating system to Linux, widely considered to be the more cost-effective choice."

    Eventually, this was going to happen. Sure, using 90% of the employees is kinda harsh, but IMHO RedHat's going to have to push at the big iron if they plan on making any sort of success. MS and everyone else is banging on the doors of big server farms already.

    Maybe they could hire Brian Valentine [theregister.co.uk] to give their sales staff a boost and some spin-doctoring. Just imagine him being a Linux advocate. :)
  • by SkyLeach ( 188871 ) on Wednesday April 10, 2002 @01:02PM (#3317495) Homepage
    We bought some copies of RedHat because we needed the support.

    We recently switched all of our hosting equipment from M$ to RehHat (thanks largely to yours truly and the M$ machines' continued insistance on crash-and-burn computing).

    The problem for RedHat is that I can get more and better support from #linuxhelp (take your choice of IRC undernets), Linuxdoc or just about anywhere else than I can from some guy at the corporation. I know the OS, and it doesn't take much time to find answers to stuff I don't know.

    When I start trying to do undocumented stuff or I start having bizarro problems with the JVM, shared libraries or something else then the RH support guys don't know as much about the problem as I do.

    I want to go to people who write the kernel, the libraries, the product or whatever isn't working and ask them. Online. For free.

    I think the comments about going to a "club" style support system makes a hell of a lot more sense.
    • I've had the same experience with Redhat. The support they include with boxed software is a joke- I get better, faster help from Linux newsgroups. I don't have any experience with their premium support. It might be really good, but the basic stuff is so bad I'm not about to give it a try.
    • It's about fixing blame. If you have a vendor to blame, and some people who you can call to make it look like the problem is getting resolved, you can have the blame (whether it is your fault or not is really not the point) shifted away from yourself in your point-headed bosses eyes.

      Of course, the problem with this scheme, which is really what the last 10-15 years of IT has been all about, is that it's been blame that's been fixed, not problems. Eventually businesses decided that building IT infrastructures and doing stuff besides e-mail and web was so problematic and expensive that it is simply easiest to keep it to e-mail and websurfing and leave it at that. When businesses and consumers en-mass stop buying computers because they are so disgusted with the way their computers don't work, you have the economic mess we have today. Some people point out that the dot-com speculation is really what caused this problem; I agree--you can't make a profit selling dogfood over the internet to people who are digusted with the way their computers work.

      I've really gone off on a tanget. Mod down to off-topic at will.

  • It's refreshing to see RedHat put away the Linux vs. Microsoft philospohy that so much of the Slashdot community favors, and focus on building their market share through UNIX conversion.

    Extrapolating from this, they look like they're building a solidified UNIX market share, allowing them to eventually focus on the desktop and small server shops where Microsoft truly thrives

    Today UNIX, Tomorrow the World! Muhahahah

  • That's excellent, both for Red Hat's continued success, and the greater acceptance of Open Source / Free Software. As geeks we like to think that the best technology will prevail, but in truth it's all about your marketing and salesmanship. I'd like to think that TrustCommerce [trustcommerce.com] is experience so much success due to the cool technologies that we have developed, but I know that it's really our sales staff that brings in the green. (In fact, we have a ratio around 90% of sales to other staff as well...)

    Good for Red Hat. I hope that they can pull through this recession intact; and I think they will, because they seem to understand the basic premises of business.
  • I like RedHat I use RedHat , I made a bundle early with RHAT stock.

    Ive been watching the RHAT stock for the last month VERY close waiting to buy at 4.75 (A mark I set, arbitrary at best)

    Rhat has AS(advanced Serve) Is it out of beta ?, and 7.? In beta , its the first beta Ive seen with a Beta2 revision from redhat in....well ever....

    People are saying nothing but good things about RedHat from a business and finacial standpoint and yet still the stock slides. 7 is a fair value if I can buy at under 5 , rich I tell you Rich Ill be, ok so a little overenthusiasm on my part.

    But why in gods name, does the stock continue to slide ? Ideas anyone ?

  • by Slackrat ( 128095 ) on Wednesday April 10, 2002 @01:35PM (#3317806)
    Being a student at NCSU, home to RedHat's new corporate offices, I had the privelege yesterday of sitting in on a presentation by Matthew Szulik, CEO of RedHat. Though his presentation was on entreprenuership in NC, the talk quickly diverged into discussions of Open Source and how in the heck they plan on making money. I took the following things away from the lecture:

    1) Szulik is a decent guy. His message of measuring entrepreneurial success in social terms instead of the quarterly shareholder statement was quite refreshing. He honestly seems to embrace the ideals of Open Source.

    2) He stated during the lecture that despite having spent less than $1 million on advertising, RedHat is the 12th most recognized brand name in technology. Though the N&O article may suggest that 90% of their staff is in marketing, it probably suggests instead that they are simply working at making RedHat a better replacement for Unix (this takes marketing AND coders).

    3) A number of skeptical members of the audience asked how they would ever make money. There were two answers: subscriptions and services. IBM is the best example of the tremendous market value of services, however Matthew spent more time on the subscription side. Let's be honest. Your average sysadmin doesn't want to have to deal with package management and keeping a system up-to-date. The RHN is a step in the right direction for managing the herculean task... it worked for me. I paid them $60 for a priority membership and I'm most pleased with it.
  • by doomicon ( 5310 )
    With Unisys and Microsoft supporting an Anti-Unix campaign, on the basis of Unix being overall more expensive than Windows. Wouldn't this just help Linux? While they spend the money convincing corporations that Unix is to expensive, Linux could ride the wave. Convince customers there product is cheaper than Windows, and no retraining of Unix personnel needed (for the most part.) Not to mention from where I sit (Telecom), it would be a whole lot easier to port existing applications to Linux, than to Windows.
  • A prediction: (Score:2, Insightful)

    by Anonymous Coward
    One year from now Sun Microsystems will be the largest distributor of Linux systems. Not because they will have converted from Solaris to Linux, but because by offering their own hardware and Linux version they will provide enterprises the proverbial "one neck to choke". If they are really on the ball they will give their Linux a Solaris flavor and make administering Solaris and Sun Linux systems as similar as they can. All the telcos and hosting companies currently running Solaris will be able to migrate leisurely to Sun Linux without disrupting their current business relationships. Why would I buy support from IBM/Compaq/HP/Dell for hardware and support from Red Hat/SuSE/Mandrake for software when I can get both from Sun? Sun can then continue concentrating Solaris at the midrange and high-end. Red Hat is dangerously close to being the skinny man of the tech industry: a stiff breeze may blow them away.
  • in short (Score:4, Funny)

    by WildBeast ( 189336 ) on Wednesday April 10, 2002 @01:58PM (#3317993) Journal
    RedHat's staff :
    90% marketing
    09% coding
    01% managing

    You can make fun all you want. But I think that's the way to go.
  • by RunzWithScissors ( 567704 ) on Wednesday April 10, 2002 @02:01PM (#3318025)
    90 percent of hatters are not marketing people. I don't know where the article got that statistic, and would be quite interested in knowing.

    Most of Red Hat's revenue does not come from selling the box set, but from other sources; check out their last quarterly report [corporate-ir.net]. Not that the company doesn't make money on people buying the box, but that's not the companies largest revenue stream. Red Hat is a service company and it makes sense, stratigically, to target enterprise customers; they have very deep pockets and are willing to pay for an all encompassing solution, including services like consulting and support. Unlike you and me, aka the cheap bastards!! Well, I don't know about you, but I'm definitely one. Pay for software, you must be mad! Sorry little rant.

    As for the fact that Red Hat is targeting a Uni* to Linux migration. Well, some people will disagree with me, but Linux, even with all it's graphical user stuff, is not ready for my Grandmother to use. It's getting there, but I don't think it's there yet. So if a large chunk of the population is unable or uninterested in your software, who do you sell it to? Is it reasonable to think that the people who would be interested in Linux are people who are already interested and are using Uni*? The two are very similar and it's far easier for an administrator or developer who is familiar with Uni* to switch to Linux rather than one who is used to Window$. Corporations have been employing Uni* for quite some time and have been paying people like $un a hefty price for hardware, OS, and support. In the current economic climate, I think it's a great strategy for a company to move to a lower cost IT solution. Why shouldn't Red Hat be the people to turn to? I say kudos Red Hat!

    -Runz
  • Code Monkey: "Hello, I am calling to speak to you about the infinite possibilities Red Hat Linux offers your company."

    IT Manager: "Oh? What are they?"

    Code Monkey: "RTFM!"

    *click*
    • You know, this would be funny, except that the few contacts I've had with folks at RH have convinced me that they have a good number of technical folks who would quite cheerfully screw over their company just for the chance to tell someone how stupid they are.

      You know who I mean... the type who would be on the other end of this conversation:

      Customer: Hmm, you've made a pretty good case... what about scheduling groupware? We're using Exchange right now, and we'd like...
      RH Guru: Then run Windows, looser.
      Customer: Excuse me?
      RH Guru: You mean you've never set up a distributed calendaring system using ssh and perl? What kind of company are you?
      Customer: Um, an insurance company...
      RH Guru: Then what the HELL do you think you're doing, touching our software?
      Customer: Uhhh...
      RH Guru: Come talk to us when you've bothered to write a few device drivers. Frickin' loosers...

      *click*

  • Another good sign (Score:4, Interesting)

    by NineNine ( 235196 ) on Wednesday April 10, 2002 @02:53PM (#3318427)
    which doesn't typically boost investor confidence. In late March, Chief Executive Officer Matthew Szulik filed to sell 425,000 of his shares after filing to sell 600,000 shares in February, according to documents filed with the U.S. Securities and Exchange Commission. Company co-founder and Chairman Robert F. Young has unloaded nearly 700,000 shares so far this year, part of a plan in which he sells shares automatically on a daily basis.

    When the founders/owners/top execs of a company start dumping shares, that's not a good sign. These guys know how the company is really doing.
    • What rubbish. (Score:2, Interesting)

      by Jules ( 2226 )
      You're viewing stock and finance as an emotional decision rather than a business decision. If I buy a stock or investment, I set a goal based on time and value of the investment. When that goal is reached I sell. Period. Unlike Enron where the top brass lied to everybody, Red Hat's management seems to be following a planned decision that at lot of execs (and peons) do all over the place.
      • Well, it could be "I'm going to make or lose x amount, and I'm gonan stick to it" or it could be "well, shit, this company isn't going anywhere... I'm gonna get what I can while I can." Unless you can read the mind of the people doing the selling, you'll never know. But, it's generally accepted as common sense that when an owner of a company begins to sell pieces of it, and he/she's not planning on retiring any time soon, or starting something else, or selling for any particular reason at all, that's a bad thing. When multiple owners/execs/founders of a company do it at the same time, common sense says that chances are, it's not a coincidence.
  • Last time I checked Big Blue still owns Lotus Domino Mail Server. It does do calendar/contact/to dos just like exchange.

    Least my copy does.

    And, if I'm not mistaken, it runs on Linux....

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