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Red Hat Software Businesses

Red Hat In The Black for Q3 146

Posted by timothy from the green-is-a-nice-color-too dept.
wheeeee! writes "Red Hat has posted a profit for the third quarter. Well, a meager $300 grand of actual net, but still a profit nonetheless. Their total revenue of $24.3 million was higher than expected. The cash flow appears to have been spurred by an increase in sales of RH's Advanced Server, of which 12000 were sold, compared to 8000 the previous quarter. RH says they're now following the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies."
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Red Hat In The Black for Q3 More

Red Hat In The Black for Q3

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  • Better poor than broke. (Score:5, Insightful)

    by Troy H Parker ( 600654 ) on Wednesday December 18, 2002 @06:46AM (#4914659)
    300K may not seem like much, but at a time when many companies arn't making a dime, it's not bad at all, especially for a company with an "alternative" business plan.

    • Re:Better poor than broke. (Score:4, Insightful)

      by tim_maroney ( 239442 ) on Wednesday December 18, 2002 @09:18AM (#4914818) Homepage
      This quarter's profit is so slim that it doesn't say much of anything. Even under GAAP there's enough wiggle room in the accounting for a money-losing company to juggle the books and come up with a small faux profit every few quarters. In this case we're talking about a profit that is only 1.25% of revenues, well within that wiggle room. It's too early to say whether this is a real profit or creative bookkeeping; the next few quarters should give a much better indication.

  • This is great-or is it? (Score:4, Interesting)

    by Martigan80 ( 305400 ) on Wednesday December 18, 2002 @06:47AM (#4914662) Journal
    Well it is great news that a company how's business is solely about linux_is_turning a profit, and especially since they have been not struggling, but watching what they do. It is also good to see that they are doing this with out memberships or asking for more donations. What also helps is that their Distro is what many American business use, and what certification are measured against (some not all). Now is this good? After the 8.0 release I didn't see so many people praising Red Hat as with the 7.3 release. I see Red Hat push for a standardization in the Linux community, but it is more of "their" standards, not what the community wants. This is a double edged sword, good for them and getting Linux more coverage, but possibly bad for the community with a muscle like Red Hat who as we can tell is starting to flex a bit. Please tell me what you think on this.

    • Re:This is great-or is it? (Score:1, Insightful)

      by Anonymous Coward
      I wouldn't say it was "their" standards, it was the standards for the general Linux community. You can't satisfy the needs for everyone, so its best to try and satisfy the needs of the masses.

      Just like Microsoft, alot of people complain about their products, but one of the reasons they're successfull is that they are made and marketed for the general computer user.

      Would you say that people who made Linux floppy distributions are implementing "their" standards more so than the communities? No, they're making a product for a specific market/need. The same with Red Hat standardising with their latest release.

      I think what is really evident here with the news of Red Hat's Q3 report is that with the right business plan, you can give away, and contribute to the development of Open Source software, sell services to support those products and make money, and do it very well.
    • After the 8.0 release I didn't see so many people praising Red Hat as with the 7.3 release.

      I've been on RH since 5.0 and I don't expect to ever "upgrade" to 8+. The push for a one-size-fits-all desktop based on KDE/GNOME means that it is getting incresingly hard to administer a system that does not use either of those. It is not helped that so many KDE and GNOME programs do not even bother including a man page.

      So, I think all the systems I have RH on will in future be upgraded a package at a time; I currently compile the kernel from source anyway.

      New systems will probably either be Gentoo or I might try SuSe; Debian is now so far behind that I wouldn't feel confident trying it on new hardware.

      TWW

      • Debian is now so far behind that I wouldn't feel confident trying it on new hardware.

        You haven't even looked at Debian lately. Admit it. If you had you wouldn't make such an incorrect comment.

        Just out of curiosity, what do you consider behind about Debian but not about redhat or suse? Redhat and suse both ship 9 month old hacked to deat kernels while debian has 2.4.19.
        • Redhat and suse both ship 9 month old hacked to deat kernels while debian has 2.4.19.

          What is the difference? Surely RedHat has included a lot of the same patches that has went into 2.4.19. And IIRC RedHat 7.3 was released before 2.4.19, so they couldn't possibly have used anything newer than the 2.4.18 they picked from the stable series.
      • The push for a one-size-fits-all desktop based on KDE/GNOME means that it is getting incresingly hard to administer a system that does not use either of those.

        Real users use xterm for eveything :-).

        I don't know about doing admin for desktop systems, but using the system as a server hsn't changed much. As far as systems go, I use a mix of RH 7.2, 7.3, and 8.0 and I have a couple of Debian unstable distros for fun. I have KDE on some of them, Gnome on others and to be honest, I don't usually notice much difference. My main issue with RH is the odd placement of some config files. So it goes... Life's too short to bitch about desktops.

      • /me takes the bait...

        The push for a one-size-fits-all desktop based on KDE/GNOME means that it is getting incresingly hard to administer a system that does not use either of those.

        Sorry, but what have you been smoking? Are you operating under the assumtion that because they ship Gnome and/or KDE that they're going to rip tar/gzip/vi/emacs/etc out of your hands? For the most part, RedHat has been -adding- new GUI tools to make it easier to perform certain tasks. If you want to edit /etc/modules.conf or compile your own kernel, or whatever, you can (as a general rule) still use the same old tools, and edit the same old files.

        It is not helped that so many KDE and GNOME programs do not even bother including a man page.

        Sigh. No, they don't come with man pages. Both Gnome and KDE have well developed help subsystems. They are GUI environment with GUI programs. Using their GUI help system to read the documentation is not an unreasonable requirement. (If documentation in man format is that important to you, might I suggest OpenBSD [and probably any of the other *BSDs]? It [they] tend to be much more thorough about writing man pages for all config files and programs on the system.)

        You don't provide a single piece of evidence in support of anything you said. I've been using RedHat on my desktop and in server roles since 6.1 (with a brief pitstop with an OpenBSD then a Solaris desktop). My opinion of RedHat 8.0 is very high.

        Pretty much every app supports Unicode (utf-8 encoding). I'm learning Japanese and multi-language support worked out of the box. I have standard version of gcc (not that 2.96-RH b.s.). I have (relatively) current releases of KDE and Gnome. And you know what else? I don't use either KDE or Gnome. I've been using Fluxbox and/or WindowMaker. I still have vi. I still have tar and gzip and bash. The config files are (more or less) in the same places RedHat has been keeping them for years and years. RedHat 8.0 is nothing more than a further refinement of the same damned thing they've been working on for years.
        • For the most part, RedHat has been -adding- new GUI tools to make it easier to perform certain tasks.

          But their documentation of the system revolves more and more around KDE/GNOME.

          I'm not saying I'll stop using RH but that the development of RH is now totally geared towards their idea of the desktop and if you don't need that then there is little point in upgrading RH as a system. It is precisely because they still include vi, emacs etc and keep all their config files in the same place that I don't see any need to go to RH8 rather than just updating packages from rpmfind.net. I don't need more GUI bells and whistles that I never use, even on my desktops, so why bother with them?

          TWW

    • Re:This is great-or is it? (Score:5, Interesting)

      by IamTheRealMike ( 537420 ) on Wednesday December 18, 2002 @07:10AM (#4914696)
      After the 8.0 release I didn't see so many people praising Red Hat as with the 7.3 release. I see Red Hat push for a standardization in the Linux community, but it is more of "their" standards, not what the community wants. This is a double edged sword, good for them and getting Linux more coverage, but possibly bad for the community with a muscle like Red Hat who as we can tell is starting to flex a bit. Please tell me what you think on this.

      I think you're exaggurating :)

      Actually I think RedHat got lots of praise for 8.0, especially considering it was such a big leap. Desktop unification was a brilliant move, and for distros that ship both desktops you can expect to see more of this in future I am thinking.

      Redhat have been sponsoring (through Havoc) the desktop standards effort for some time now. The standards are hardly "theirs", they are developed in conjunction with the community and the only ties to Redhat are the fact that Havoc is the organiser and the mailing lists are hosted on a Redhat box. Redhat have never been about forcing control on people, far from it.

      I personally think 8 is great, it looks extremely slick and professional and the admin tools are nicely integrated into gnome2. The fact that they're now in the black tells me it's going to be alright - the hype has passed, but Linux is still here and going strong.

      • Here! Here!

        I really don't know what the big deal is all about. Have been running RH 8.0 since it was ISO-available. Haven't experienced a single problem -- and I use it on the KDE side.

        Have heard some bad stories from others, but they seemed to be hardware-related issues, every time.

        When I go from home (RH 8.0) to work (RH 7.3) I often wish I had the time to upgrade my workstation at work! (Yes, it's that much better.)

        Your milage may vary...

        Oh! And if you do use KDE (or want to play MP3s on XMMS, etc.), this [osnews.com] really helps.
      • I agree. For the first time, many system configuration files are in one spot, which is a big plus for new users (If you don't like it, you can always use vi, like I still do). Each RH release keeps getting better. I also really enjoy Bluecureve - it melts the gnome2 and kde3 worlds together, in a concise way. Now if we could get the old gtk 1.x apps to look like bluecurve, the user wouldn't notice any difference.


        To all those naysayers about RH and Bluecurve: This is still Linux under the hood - dig in, and customize to your hearts content! Isn't that why you are using linux in the first place?

    • Jebus Fscking Chirstmas, time for a killing spree (Score:4, Informative)

      by bogie ( 31020 ) on Wednesday December 18, 2002 @10:32AM (#4915013) Journal
      You know how many times I heard these "Redhat is getting too big" comments since the 90's? Linux is free, GPL, and can't be "owned" by any vendor including Microsoft or Redhat. I'll tell you what I think on this...*?#!$@*!! up about it,and stop bringing it up!

      • Yes, all that is true, but, in practice, to the extent that Redhat becomes the de facto standard for professional use, they have a certain amount of control. If 3rd party binaries have more chance of working (ever tried installing random rpms with Suse?), Linux staff have RH-flavoured skills and the bookstores sell RH-flavoured guides, you are close to 'no-one ever got fired for running Redhat'. Sure, you can fork, or install Debian, or something, but most commercial users want some sort of road map.

        Personally, I'm rooting for Redhat all the way. A bit less variety in the Linux world would make for a less exciting but more productive life.

    • Re:This is great-or is it? (Score:5, Insightful)

      by lunenburg ( 37393 ) on Wednesday December 18, 2002 @10:35AM (#4915044) Homepage
      Now is this good? After the 8.0 release I didn't see so many people praising Red Hat as with the 7.3 release. I see Red Hat push for a standardization in the Linux community, but it is more of "their" standards, not what the community wants. This is a double edged sword, good for them and getting Linux more coverage, but possibly bad for the community with a muscle like Red Hat who as we can tell is starting to flex a bit.

      That would probably come from listening to drooling Slashdot fanboys whose only reaction to hearing the words "Red Hat" is "d00d!!11 r3d h@t si evil!!!! my Distro is more 31137 than j00!" or some other nonsense. Remember - you can't be cool" if you look like you're supporting the most popular thing. It happens with everything - the hip little bar downtown suddenly becomes "a sellout" and uncool once everyone discovers it. Same with bands, TV shows, etc. It's just very disappointing to see the Linux community turn on one of their own just to earn 31337-points. Shit-talking Red Hat just to show how cool you are doesn't help the Linux community gain credibility - it makes people think that the community is filled with a bunch of immature back-biters.

      Nobody has ever come up with anything more than half-baked conspiracy theories to show that Red Hat is out to become "the Microsoft of Linux." The 8.0 release was a big jump in terms of functionality and overall direction. Some people liked it, some people didn't. There are lots of things I like, and several things I wish they'd have done differently. But business and technical decisions by a company whose product is open-source is not evil. I find it hard to believe that when you can take Red Hat 8.0, strip out a couple of minor packages, do s/Red Hat/MyUberDistro/ in the source code, and resell it, that Red Hat is the evil behemoth that people claim.

      And do you know how Red Hat flexes its muscle? By GPL'ing nearly everything it produces, supporing the LSB, and employing people to work full-time on Linux, thus contributing their work back to the community for everyone from you to SuSE to Debian to use. Ooooh, how deliciously evil.

      So I think that the only people who rail against the evils of Red Hat are paranoid conspiracy theorists who don't have the slightest idea of what they're talking about, and are only looking to score cool-points at Red Hat's expense. If Red Hat doesn't do the job for you, use their bugzilla or email lists and attempt to convince them to change things, or by all means use the distro that works best for you. But demonizing Red Hat simply because they happen to be the biggest and/or most
      popular distro hurts all of us in the long run.
      • And do you know how Red Hat flexes its muscle? By GPL'ing nearly everything it produces, supporing the LSB, and employing people to work full-time on Linux, thus contributing their work back to the community for everyone from you to SuSE to Debian to use. Ooooh, how deliciously evil.

        Did Red Hat not support Software patents? You are correct they do pay the employees, I don't think they could have such great programmers if they didn't. What you say about GPL'ing everything is very true, not like SuSE what wont release YaST (Thank god).

        I'm not trying to say they are evil, I think MS uses evil business tactics, but then again would other people who wanted to stay on top? I was really wondering since Red Hat can be technically called the biggest monetary power house in the Linux community, are they using this power to "enforce" their standards. Sure they don't need anyones permission and I can use what Distro I like, BUT since they have a great market share already and most non-techs tend to keep loyalties more than others, It will be easier to acquaint your customers, correct that PAYING customers to your standards. And for a business to survive you need to go where the money is, and right now Red Hat is establishing that arena.

        • You have discovered the secret to RedHat's ability to make money. Congratulations. I'ts no secret that building brand loyalty has been what they've been all about since their inception.

          But, if RedHat were ever to turn evil, and start making descisions that didn't benefit their customers, it would be much easier to switch away from them to somebody else that it is to switch away from Microsoft. They have to keep on making their customer's happy and maintaining their brand image in order to survive.

      • THANK YOU. (Score:5, Insightful)

        by Ars-Fartsica ( 166957 ) on Wednesday December 18, 2002 @11:17AM (#4915442)
        The anti-Red Hat rants on this site are utterly baseless and sophomoric. If Red Hat were to exit the market, a significant force for the advancement of linux would vanish. Thank you for your post.

    • Re:This is great-or is it? (Score:1, Interesting)

      by Anonymous Coward
      I've actually been a RedHat user since 5.2 and I've tried a few other distro's along the way, specifically Mandrake, Debian, and SuSe.

      RedHat 8.0 is without question the best Linux distro I've used and has had less "minor issues" than any other distro. I like the Bluecurve look and even if I didn't I would shut it off and not use it, like any sane person would.

      I think it's the loud minority who have been bashing 8.0 and I really don't pay much attention to the zealots. For real world usage RH 8.0 works better than anything I've used previously and that's all that matters to me.

      Warmest regads.
    • but it is more of "their" standards, not what the community wants

      I, on the other hand, see Red Hat giving users exactly what they want. They make timely releases. They issue timely errata for security problems. When users proclaimed that Linux would never succeed because the distinction between GNOME and KDE's look-and-feel confused new users, Red Hat did the grunt work for a new theme and menu system so that both environments had a more coherent look-and-feel.

      Red Hat produces the best system available for general use, and some damn fine work in Advanced Server. Anyone is free to flex as they like; users will choose what they like best. You don't get to complain when the majority of people choose Red Hat Linux.
    • On the contrary, Red Hat 8 is what got me to switch from Mandrake. And I ditched my last Windows 2000 machine at the same time. Now all my computers run Red Hat 8.

      The desktop integration thing wasn't a big deal to me, I prefer to mostly use gnome apps anyway. But it looks good, the font rendering and display control panel with resolution switching is sweet, it has all the latest n greatest development tools, and an up-to-date-enough Ximian Evolution that I didn't need to install Ximian RedCarpet - so I can update and manage the whole thing just with up2date instead of up2date + redcarpet.

      I'm really pleased with it. There are just a few little things I need to fix from a default installation:

      - add /sbin, usr/sbin, usr/local/sbin to every user's path, not just root,

      - fix rc.sysinit to start the firewire drivers before attempting to mount /home (I keep my /home on an external firewire drive)

      - Compile and install lame from source, and install the XMMS mp3 plugin for mp3 support...

      - Install the real Java SDK and JRE from Sun.

      And that's about it. Everything else just works fine.

      I even paid for a subscription to the Red Hat Network.

  • Quite impressive (Score:5, Interesting)

    by Lebannen ( 626462 ) <slash@iroMENCKENwan.com minus author> on Wednesday December 18, 2002 @06:50AM (#4914668) Homepage
    I'm always impressed when relatively 'public' offerings such as Red Hat can turn a profit, really showing how important the business sector is. They may want free software, but they're more interested in low-cost software with some guarantee of support and an upgrade path. What I also found interesting was that those sale on advanced Server aren't actually sales - they're actually a subscription charge. 800-900 dollars for a year, product launched in May, and 1200 buyers (subscriptors?) by the third quarter - so that comes to just over $10,000,000 *if* they all pay a year's charges in advance. Not bad, and a revenue stream which will keep going year-over-year. Not bad at all. And I thought it was mainly online games charging subscriptions...

  • Missing zeroes (Score:4, Interesting)

    by KecCu ( 614885 ) <Spook_be@yahoo.c o . uk> on Wednesday December 18, 2002 @06:51AM (#4914670)
    According to the article, that should be $305,000 profit.

    More important though, they will lower they prices:
    "The average selling price of an Advanced Server subscription in the second and third quarters was $800 to $900 over a year, but it will decrease to $600 to $800 in the future, Red Hat said"

    What I particularly like:
    "overall gross margins were 66 percent"

    Now there's a healthy company!


    • "RH says they're now following the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies."

      When I last checked GAAP-based accounting has been around since the 1930s although they were not known by that name. In the USA, FASB is reponsible for establishing US GAAP. If Red Hat previously chose not to follow these standards and cook their books instead, we should hardly applaud them for finally doing what they should have done all along... especially now that deceptive accounting practices are no longer in fashion in the corporate world.

      From the American Institute of Certified Public Accountants [aicpa.org]:
      Between 1938 and 1959, the AICPA's Committee on Accounting Procedure (CAP) issued fifty-one authoritative pronouncements known as Accounting Research Bulletins that formed the basis of what became known as generally accepted accounting principles, or GAAP. In 1959, the CAP was replaced by another part-time body, the Accounting Principles Board (APB), which during the next fourteen years issued thirty-one new standards.

      From the Financial Accounting Standards Board [fasb.org]:
      Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports.

      • I know several people have mentioned GAAP already. I know it has been around for ages because I have family that has worked with it for many years.

        But the posts I have read do not mention that GAAP is just one method of accounting. The article mentions that this is the first year Red Hat has reported a profit using GAAP.

        Although I believe what they are saying is that they have previously reported a loss using GAAP, they may also be saying that they have previously reported a profit using other methods.

        I do not know where the original poster got the idea that GAAP is something new.

  • Good news (Score:5, Funny)

    by dipfan ( 192591 ) on Wednesday December 18, 2002 @06:52AM (#4914672) Homepage
    At last, someone gets to the 3. Profit!!! stage.

    There's a better Reuters coverage of the subject here [reuters.com].

  • Overvalued (Score:4, Interesting)

    by nuggz ( 69912 ) on Wednesday December 18, 2002 @06:52AM (#4914673) Homepage
    Redhat has 170 million shares outstanding.
    A Market capitalization of 1 billion dollars.
    $300k isn't going to cut it. (annually, quarterly, monthly or even weekly.)

    Daily earnings of $300k would be decent.

    1% profit on their sales is a little slim.

    They've still got a way to go to justify their price
    • Of course you are right about the overvaluation - the current market cap is in no ways appropiate.
      But I disagree about the low profit margin - to judge about this, you need to know, which amount of revenues comes from products and which from services.
      Products in the software industry tend to have fixed (development) costs, while production costs are marginal. That means, if you sell more, your profit may rocket as costs stay at the same level.
      Services tend to have mostly variable costs (workforce), so higher revenues from services produce higher costs, too. So the profit margin may not rise if revenues from services grow.
      • They need to VASTY increase their sales to justify their market cap
        But even if any sales generate 100% profit, they need to double their sales to justify their market cap.
        • There is every reason to think a factor of two increase in sales is absolutely possible.

          They have less than 1% of the desktop market but a reasonable chance of that rising by over a factor of 10 (to 10%) in a few years.

          Linux use continues to grow expontially and they have the biggest concentration of linux talent anywhere.

          Plus quarter on quarter growth of advanced server is around 50%! If that continues over a year or so so a factor two in revenue will be a piece of cake.
          • Quarter on quarter growth of 50%, for 2 quarters after a new product.
            I don't think that will continue for a year or so, you're suggesting 500% in the next year (1.5^4)

            Linux use is growing, but that isn't all Redhat, and that isn't all Advance server either.

            I think there will be growth, lots in subscriptions and valuable service, but I don't see Redhat growing profit by 100x in the next few years.

            I do think that they are doing better, and will probaly be somewhat successful, just not what hteir market cap suggests.

    • Quarterly earnings are at best a snapshot and are hugely overemphasized. This latest is really just breaking even and change. Still, Redhat is not bleeding cash like many other companies in similar markets. I think their long term prospects are respectable.

      They're trading at around $6.55 this morning. The prospects for a quick killing at that price are poor, but haven't we all learned our lesson?

    • True, but potential market is enormous (Score:4, Insightful)

      by Ars-Fartsica ( 166957 ) on Wednesday December 18, 2002 @11:23AM (#4915496)
      I agree with you 100% about valuations, and if you read my journal, you will see at least twenty long rants about market valuations being out of whack.

      That said, RH is potentially addressing a gigantic market. Even if 20% of Solaris and Win2k installs migrate to RedHat, thats in incredible jump in the number of installed cusomters with credible purchasing power.

      I would confidently place RH in the same league as some biotechs in terms of market potential.

    • Correct me if I'm not calculating this properly...

      Ok, so let's say they can continue this out... $300 per quarter for 4 quarters. That's $1.2 Million in profits.

      There are 170 Million shares outstanding. So that'd make their EPS about $.007... so less than 1 cent per share.

      So then their Price to Earnings ratio would be about $6 divided by $.007 or 857.

      Yeah, I'd say they are overvalued. :)

  • I suppose the appropriate response would be... (Score:3, Funny)

    by TrollBridge ( 550878 ) on Wednesday December 18, 2002 @06:53AM (#4914674) Homepage Journal
    "It's official, Red Hat is NOT dying".

    Can the same be said for FreeBSD?

  • It's good to see a Linux and open source-based business model succeed.
    • Now we know that people are willing to pay $800 not to have to compile things (bad news for gentoo).

      Turns out we had the whole business model idea wrong. Don't charge for support, charge for compilation!

  • OK, now that they are out of the red... (Score:5, Funny)

    by tsvk ( 624784 ) on Wednesday December 18, 2002 @07:04AM (#4914681)
    ...will they change their name to Black Hat?

  • Red Hat Linux pricing: 7.3 vs. 8.0 (Score:5, Interesting)

    by johnraphone ( 624518 ) on Wednesday December 18, 2002 @07:05AM (#4914684) Homepage
    Anyone notice the Redhat 7.3 prices vs 8.0 pricing?

    Red Hat Linux 7.3 Personal - $59.95
    Red Hat Linux 8.0 Personal - $39.95 ($20 cheaper)

    Red Hat Linux 7.3 Professional - $199.95
    Red Hat Linux 8.0 Professional - $149.95 ($50 cheaper)

    Redhat 8.0 is actually cheaper than 7.3. Its pretty interesting if they will end up making more money doing this.

    • well, what you want as a company, that the users buy the older version(and by buying it buy support for it) and then call your support staff until they die and then magically drop the support and make people angry?

      noo i'm not saying that one cough*ms* was doing anything like this but..(oem 98's are still sold at some places here!!cheap too..)
    • Alas, I was unable to find Red Hat 8.0 Personal locally. Granted, I didn't check more than a couple stores because I didn't have the time, but all I saw was Pro. I'm building a system for a friend of mine with Win XP and RH 8.0 and really wanted to send some money Red Hat's way for a fine product. Unfortunately, $150 was just too steep. :-( Instead, I picked up a $50 book that included the installation CDs. I hope some portion of that goes to Red Hat, but I doubt it.

      Regarding the price decrease, I think it's definitely a good idea. A Win 2k -> Win XP Pro upgrade can be had for $200; it's important for RH8 Pro to beat that. The Win XP Home upgrade is $100, so $60 wasn't too bad, but hopefully the $20 drop will attract more people due to a more favorable perception of value.

      As an aside, I always find it amusing to see the "included software" list on the retail Linux distro boxes. It's not bad stuff or anything, and I'm sure a large number of people like to have it all there right away, but the first thing I do with a new Linux installation is to download the latest Mozilla, OpenOffice, NetBeans, jEdit, etc. The boxed versions have to be tested with everything else in the distro, so they're often a minor revision or two behind the latest stable release for most packages. Of course, I typically install these in /opt on a separate partition, so reinstallation of the OS doesn't require anything but a PATH change (I like to use /opt/bin for symlinks to apps on that mountpoint). Beat that, Microsoft. :-)

    • Re:Red Hat Linux pricing: 7.3 vs. 8.0 (Score:1, Interesting)

      by Anonymous Coward
      If you look at the financials, neither Personal
      nor Pro make up significant portions of RedHat's
      revenue: the bulk of it comes from corporate
      sales of Advanced Server.

      Bill
  • If Redhat is pushing (or wants to push) the linux community towards more standardisation, why don't they join the unitedlinux [unitedlinux.com] effort then ?
    If suse, caldera, conectiva and openlinux can put aside their own goals for the sake of profitability errhm standardisation then Redhat should be willing to make this step as well.
    • I bet the unitedlinux thingie is just a way for the smaller dists to compete with redhat.
    • Because they are not interrested ? They want people/companies to standarize on Redhat.
      • And they are slowly succeeding. Red on Blue with IBM supporting the OS, Oracle databases on Red Hat. VMware's use of Red Hat as the Console OS for the VMware ESX Product. and ISS RealSecure network/server sensors on Red Hat.
        If you are a great fan of Linux and want to applicate it to a business environment, Red Hat is the most 'corporate' oriented choise you can make.

    • Re:so what about unitedlinux (Score:5, Informative)

      by teg ( 97890 ) on Wednesday December 18, 2002 @09:31AM (#4914861)
      If Redhat is pushing (or wants to push) the linux community towards more standardisation, why don't they join the unitedlinux effort then ?

      The standardization effort is LSB [linuxbase.org]. "UnitedLinux" is more of a marketing tactic from Suse than a standardization effort...


      If suse, caldera, conectiva and openlinux can put aside their own goals

      Two of these, caldera (openlinux is a product of them) and TurboLinux, are dead companies (as far as Linux development goes... their developers are gone). This isn't four companies pooling their efforts, this is SuSE desperately trying to counter Red Hat and signing up dead/severely hurting companies and give the impression of something more.
    • None of these companies have the best track record for contributing to the community -- unlike Redhat. No, I'm not a Redhat fan, but they're much better than the those slimeballs.

  • I guess... (Score:2, Redundant)

    by leomekenkamp ( 566309 )

    I guess in the light of recent financial changes it might be more appropriate if they company would rename itself Black Hat?

  • The GAAP (Generally Accepted Accounting Principles) were not developed recently, and achieving compliance with the GAAP could not be considered any kind of special accomplishment for a new company, any more than would adherence to the laws of arithmetic.
  • It's the first time Red Hat has reported a profit using Generally Accepted Accounting Principles (GAAP), according to the company.

    What you mean not telling lies like enron & others.

  • This is pretty damn good! (Score:5, Insightful)

    by wiredog ( 43288 ) on Wednesday December 18, 2002 @07:17AM (#4914709) Journal
    $300k profit isn't tremendous but, considering that the third largest bankruptcy in US history has just been announced [washingtonpost.com], it's not bad. Not bad at all.
    • Has nobody in corporate America heard the phrase "You don't shit where you eat"? They will screw their own company, co-workers, employees and such, risk going to jail and paying fines in the millions because they want to feel extra special important and make some fraction of their insane income *more* in self-awarded bonuses?
  • I feel cygwin [cygwin.com] is
    one of the best products in the RH stable.

    the purchase of cygnus was a great move.

    -greg

  • Wooo (Score:2, Flamebait)

    by Orne ( 144925 )
    Oh boy!, $300,000... throw a parade. err, yay.

    That's going to go real far against the $63,846,000 [yahoo.com] in losses that they've raked in in the last 4 financial quarters...

    • Re:Wooo (Score:2, Informative)

      by socratic method ( 15936 )
      $64mil in losses does NOT mean that they have $64mil in outstanding loans

      That $64mil in losses is not so significant when you consider Red Hat's balance sheet [yahoo.com]. The company has far more than that in current assets (i.e., cash, cash equivalents, and short term investments). Going into the last quarter, Red Hat had $375mil in total assets and only $47mil in total liabilities.

      SM

      • Re:Wooo (Score:3, Informative)

        by Orne ( 144925 )
        $113,383,000 of this was liquid assets, compared to $47 mil puts them at about 41% debt load. Not a good place to be, when normal industry worries when they're at 10-15% debt ratios.

        • Re:Wooo (Score:2, Informative)

          by socratic method ( 15936 )
          Worried about 10-15%? Get real. Look at MSFT:

          Total liquid assets: $50bil
          Total liabilities: $16.7bil

          So, is MSFT "worried" about their whopping 33% "debt-load?" I think not.

          Again, RHAT has a 41% liquid assets/liabilities ratio. MSFT is at 33%. Not a real big difference there.

          Learn a little about corporate finances before making misleading doomsday postings about Red Hat's crushing debt.

          SM
  • ... the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies.

    Correctly if I'm wrong but the GAAP were developed weren't developed in the wake of recent accounting troubles, but the bulk of them were developed during the 60's and 70's. I can certainly remember being taught them 10 years ago when I did my degree.

    This site [cpaclass.com] seems to agree.

    Unless these are some new US ones. Anyway it is nice to see a tech company doing well.

  • products vs. services (Score:3, Insightful)

    by MadFarmAnimalz ( 460972 ) on Wednesday December 18, 2002 @10:46AM (#4915146) Homepage
    Red Hat said about 70 percent of its revenue comes from direct sales of products to its customers, but over time, it expects 65 percent to 70 percent of sales to come through indirect sales channels such as its partnerships with IBM, Oracle, Dell and Hewlett-Packard.

    Hmm. So either way, 65 to 70% of the revenue is coming from shipping products; I find that interesting in light of the fact that RedHat appears to me to be uniquely positioned to be the biggest player in the support arena; this must surely be the cash cow par excellence?

    How about an Ask Slashdot session with a RedHat exec?

  • Not to nitpick (Score:3, Informative)

    by pbur ( 88030 ) on Wednesday December 18, 2002 @10:53AM (#4915230)
    But the Generally Accepted Accounting Principles (also known as GAAP) have been around for a LONG time. Not just since the recent accounting problems showed their face as the poster implies.

  • Congrats RedHat, continue ignoring naysayers (Score:5, Insightful)

    by Ars-Fartsica ( 166957 ) on Wednesday December 18, 2002 @11:15AM (#4915429)
    In a down economy, particularly in the gutted software market, RedHat's move to profitability is a great sign.

    This company has combined great a great technical staff with the ability to market and profit from products that differentiate them. I have not had any experience with the Advanced Server product, but as a RH8.0 user, I can say that the product is showing great improvements.

    The linux market will not support a "Microsoft of linux" if that is your fear, the market for distros is very liquid, in fact, almost infinitely liquid. RedHat will only survive by providing true value above and beyond the hundred or so other distros that happen to be marketed at any given time, most of which are solid products in their own right.

  • between Red Hat's first profitable quarter and an evil hacker who's girlfriend is on the rag?


    One is a Red Hat in the black, and the other is a black hat in the red.


    Ba-doom-ching!

  • Is this real profit or like when they "broke even" a while back and it was a lot of funny accounting?
  • I don't think the generally-accepted accounting principles are a recent development. Just because *you* only heard about it recently doesn't make it recent.

    Companies advertising their adherence to the GAA might be recent. I would have hoped RedHat had always been adhering to the GAA, but I do remember their IPO and the fact that their stock price peaked at an outrageous value before dropping back to ~$10.

    I also remember some major underwriting house (First Boston Credit Suisse or some such?) admitting to high-tech IPO hanky-panky some months ago.
  • That's funny, I seem to remember learning the Generally Accepted Accounting Principles when I took Accounting I five years ago. And I remember my professor said that she learned them fifteen years before that. So what is this recently developed crap all about?

    Maybe recently embraced by those who weren't following them, but not recently developed.

    Of course, anyone who can get people to invest in them when they've never posted a profit and never will, like the dot-bombs and Sprint PCS, is a pure genius.

  • RH says they're now following the Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies.

    GAAP?

    I learned about GAAP in grade 11 accounting. That was over seven years ago.

    Nice to see major corporations are finally catching up to public school classes.
  • IBM quits giving money to them? Or any other large company that hands cash to them because they want the tax writeoff? I'd bet there wouldn't be a profit, but rather a huge deficit. Good God, everyone knows you can't give something away and expect to make a profit. Be honest, how many boxes of RH REALLY have been sold? Not enough to cover Alan Cox's salary (I'm quite sure it is massive). Why? Because the software is given away and also sold for $5 a disc. Can't make profit like that. Now Microsoft knows how to make money, RH should look at their model to see how a successful company is run. Be honest, you know it's true.
  • "Generally Accepted Accounting Principles, developed in the wake of recent accounting troubles at some companies"

    Gee, so are those different than the GAAP rules that I learned in college? or different than the rules, going by the same name, that have existed in the US for many years. (International accounting has different rules, as well as each country)
  • that you can make money with Linux and with open source.

    I'm at work and on a Redhat 7.3 box and I got Redhat 8.0 workstations directly behind me and all my servers run Redhat. I have 10 remote locations connected by Redhat gateways running FreeSwan. Everything is very stable ( I can tell how long I've worked here by the uptime on the file servers ) Thanks Redhat your success is well earned and for real.
  • The company predicted net income of $1.3 million to $2.5 million for the current quarter, which runs through February. Revenue should be between $26.5 million and $27.5 million. Cash generated from operations should increase to between $2 million and $3 million.

    So... where does the other 25 million come from?
  • No matter how slim a profit may be, there are tons of large, reputable companies out there that are
    losing money. Breaking even is good, a profit is merely icing on the cake, and hopfully a sign
    of things to come.

    On a related note, RedHat's stock is down today. As a shareholder, I'm interested to know why it would
    drop on good news. Any ideas?
  • $300K is noise to any company with as many employees as Red Hat. It's a negligible profit that would be easy to create ex nilhilo, merely by making perfectly permissible accounting decisions (which companies are allowed to make under GAAP).

    Alas, Red Hat still attempts to sell copies of GPLed, rather than commercial, software, and so will never be able to gain a true market edge over competitors. Not a horse to bet on if you're a betting man, IMHO.

    • Out of curiosity, what's so bad about not making billions of dollars off of people? Non profit organizations do this all the time.

      So people won't become rich from buying Redhat's stock, that doesn't mean the company can't create good GPL software, create some new jobs, and make a few extra dollars at the end..
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