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Linux Business

Businessweek Covers Linuxworld 124

Posted by CmdrTaco from the places-to-be dept.
MadFarmAnimalz writes "BusinessWeek has coverage of Linuxworld up, and it makes interesting reading in places. Amongst things touched upon are the open-source business model, how vendors will be tempted into locking in customers into their offerings, and other things." I'll be out there tomorrow for the Golden Penguin Bowl, as well as judging exhibitors. Busy day.
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Businessweek Covers Linuxworld More

Businessweek Covers Linuxworld

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  • How about news networks? (Score:4, Interesting)

    by MacGunner ( 611205 ) on Tuesday January 21, 2003 @12:25PM (#5127763) Homepage
    ABC, Fox News, NBC... etc. Its time for some REAL tech in everyday coverage.
    • ABC, Fox, NBC, Reuters, and AP carry news that the majority of people reading it will care about. Linux is a niche market, most people don't (and won't, for years) care.

      Linux had its chance in the past few years, and poorly performing stocks (LNUX, etc) have left a bad taste in many mouths across the world.
    • Yeah. I see MSNBC doing excellent coverage of Linux.

      Do you know what the MS in MSNBC means? MSNBC is partnered, joined, together, as one.. with M$.

      I'm just suprised that the other networks don't attack their competitors by giving LINUX better coverage.

    • Well how many stories on Windows do you see in the news? Besides TechTV I can't remember the last time I saw something on Windows on mainstream news. The only time in the past several years MS has been mentioned is at major product launches and during the antitrust trial. So considering how sparsely windows is mentioned is it surprising that Linux doesn't get mentioned? In general mainstream news sources could care less about technology unless its biotech.

  • Slashdotted already? (Score:5, Funny)

    by grub ( 11606 ) <slashdot@grub.net> on Tuesday January 21, 2003 @12:26PM (#5127772) Homepage Journal

    LinuxWorld was a huge success!

    Bob Young gave out 23 free red velvet fedoras. He commented that he would have liked to have given out more but being that RedHat only made $300K last year "times were rough".

    Across the hall, 6 gentlemen from the RepoDepot were clearing out the Mandrakesoft booth.

    VA Software had a good showing, several dozen slashdot fans shared pizza with Cowboy Neal and CommanderTaco was demoing a beta version of his GPL spelling software.

    • Bob Young gave out 23 free red velvet fedoras. He commented that he would have liked to have given out more but being that RedHat only made $300K last year "times were rough".

      Well, at a time that many computer companies were losing money....Well, except for Microsoft.

  • CNET story, not Businessweek (Score:2, Informative)

    by Anonymous Coward
    Hey, that's a CNET story re-run on Business Week. Duh

  • Apple chose BSD over Linux

    LNUX is worth a few pennies and in danger of being de-listed off the NASDAQ stock exchange

    MCSEs are getting more jobs than Linux sysadmins these days

    Apple chose Trolltech/KDE over the Gecko/Linux renderer

    OS X already won. Any geek or scientist worth their salt who wants a UNIX home computer already has an iBook or a G4.

    • "# LNUX is worth a few pennies and in danger of being de-listed off the NASDAQ stock exchange"

      this should be funny, right? "silly, Linux isn't a company, you must be jesting?" should be going through the moderators head not, "interesting . . ."

      ah, forget it, /. is going down the toilet.
      • silly, Linux isn't a company, you must be jesting.

        Linux isn't a company. LNUX is.

        LNUX was the symbol for VA Linux, who has since changed their name to VA Software (aka: slashdot's parent company).

        LNUX IPOd during the boom, and was well above $200/share for some time, and is now trading for barely over $1/share. For more details, check out your favorite financial site.
      • http://finance.yahoo.com/q?s=LNUX&d=v1

        LNUX == VA Software Corporation

    • Re:What's there to celebrate? (Score:5, Insightful)

      by tewfik ( 643344 ) <tech&opennet,ae> on Tuesday January 21, 2003 @12:45PM (#5127883) Homepage
      is that pessimistic or what? Those are sad headlines, but Linux future is being readied in the background. Indeed in todays world economy the fresh money linux companies need to survive is to come from the formerly-3rd-world countries. These recon there is no point in using expensive software and are switchig steadily to open source solutions. The same applies for the tech certs. We expect there will be far more people certified RHCE or LPI than MSCE and the like in the near future.
      One never knows where the salvation is to come from.

    • Re:What's there to celebrate? (Score:1, Insightful)

      by Anonymous Coward
      Apple chose BSD over GPL.

    • Re:What's there to celebrate? (Score:4, Insightful)

      by JordoCrouse ( 178999 ) on Tuesday January 21, 2003 @12:54PM (#5127931) Homepage Journal
      OS X already won. Any geek or scientist worth their salt who wants a UNIX home computer already has an iBook or a G4.

      Won what? Was there a race?

      It is my contention that nobody cares about Linux on the desktop any more outside of a small group of Linux afficiandos (such as me).

      And I gotta say, that I'm ok with that. There are many more interesting places to do operating systems battle, so as far as I am concerned, OS X can try to win the pissing match over the ruins of the desktop market while the rest of us start concentrating on the next generation of computing.

      Have a great time.
    • The best part of Apple/BSD/Linux is dead headlines is that you can recycle. Pick a headline, and insert Apple, BSD, or Linux as appropriate. The best source of headlines is the Apple archives. They've been dying since 1984, longer than anybody.
      • The best source of headlines is the Apple archives. They've been dying since 1984, longer than anybody.

        Actually, Unix in general has been dying since the mid-seventies. I think it might even have been pronounced DOA. Between DEC with VMS and IBM with their "minis", Unix never had a chance, poor thing. *sniff*
    • You seem quite ignorant. Let me inform you.

      • "Apple chose BSD over Linux"


      • Wrong. Apple chose BSD over GPL. OSX is OSX. not BSD, not Linux.. it could only be considered a Unix. They chose the BSD license because it is less restrictive. Mod -1 WRONG

      • "LNUX is worth a few pennies and in danger of being de-listed off the NASDAQ stock exchange"

        So? I fail to see how this has anything to do with Linux. VA Software !=Linux, and asserting that it does is idiocy. Mod -1 OFFTOPIC

      • "MCSEs are getting more jobs than Linux sysadmins these days"

        Perhaps in number, considering the multitude of mcse's, it's not suprising that some of them find work. In reality, however, this statement is ridiculous and uninformed. The average RHCE makes twice as much as the average MCSE. It's a fact. Mod -1 WRONG

      • "Apple chose Trolltech/KDE over the Gecko/Linux renderer"
        Gecko/Linux eh? That's pretty stupid. Gecko is independent of Linux. This is about as stupid as saying apple chose BSD over Linux. Mod -1 WRONG

      • "OS X already won. Any geek or scientist worth their salt who wants a UNIX home computer already has an iBook or a G4."


      • OSX has already won what? Nothing. Only Mac users use OSX. The statement about any geek or scientist having mac hardware is just ridiculous ranting, PC architecture dominates the market and takes an equal percentage of geeks and scientists and everyone else with it. If anything, OSX has lost because it is an apple product, and apple has been dying since 1984.Mod -1 INANE RANT

        So tell me now, how is it that you don't deserve to be modded out of existence? Every single one of your points was either completely in err or misleading. Putting your post in an unordered list won't get you a +5 Informative if your content is crap, which it was.
    • # Apple chose BSD over Linux

      BSD is Free software. The Mac used to use entirely non-Free software.

      # LNUX is worth a few pennies and in danger of being de-listed off the NASDAQ stock exchange

      Red Hat made its first profit. IBM's doing great off of its Linux business.

      # MCSEs are getting more jobs than Linux sysadmins these days

      Whatever. There's probably more MCSEs than qualified Linux sysadmins, so that's to be expected.

      # Apple chose Trolltech/KDE over the Gecko/Linux renderer

      Both options are Free software. The Apple used to ship with Internet Explorer as its default.

      # OS X already won. Any geek or scientist worth their salt who wants a UNIX home computer already has an iBook or a G4.

      Can't comment on who "won" when the contest isn't defined very well. Is it the vitally important contest to sell UNIX home computers to geeks and scientists?

      -Gareth

  • Linuxworld 2003 news links (Score:5, Informative)

    by dietlein ( 191439 ) <(dietlein) (at) (gmail.com)> on Tuesday January 21, 2003 @12:32PM (#5127817)
    Computerworld [computerworld.com]

    Cnet [com.com]

    Internetnews [internetnews.com]

    Infoworld [infoworld.com]

    And, of course, Microsoft Watch [microsoft-watch.com].
    • >And, of course, Microsoft Watch [microsoft-watch.com].

      from teh article...."Microsoft is sending some of its crack GotDotNet evangelization team into enemy territory"....i am gonna visit there just to see their faces [gotdotnet.com]....r we having a plan for an attack yet?? hehehe..

      how dare they trample in our territory???? lets show the .netters some /.er effects.....
  • I just don't see how you can have a profitable buissness solely on open source software. The only thing you can actually make money on is either documentation or support. But how are you supporting your development team?

    www.1001InsomniacNights.com

    • Re:Open Source Shmopen Source (Score:5, Insightful)

      by gpinzone ( 531794 ) on Tuesday January 21, 2003 @12:52PM (#5127920) Homepage Journal
      That's somewhat true, however what's the other option? Come up with your own OS? Why? Who needs it? Besides, I don't think these companies are offering open source software. They're offering closed-source software on an open OS. Big difference.

      The reason Linux is seeing this recent resurgence is due to the natrual evolution of the operating system's relevance to the overall picture. If programming languages are at a high enough level such that porting applications (i.e., the real moneymakers) is easy between different OSes, then why not go with the one that costs zero? Mind you, I said "relevance" of the OS, not "importance." For example, deciding which CPU and chipset to use is important, but has no (little) relevance to OS and application selection.
      • "The reason Linux is seeing this recent resurgence is due to..."

        One of the reasons is that the distros are coming up with very good installers and that more and more hardware is supported. It was easier for me to install RH 8.0 next to Windows than it was to install Windows 98 by itself.

        Linux is viable on the desktop. Note that I didn't say that it's dominant. I'm still trying to get my scanner working :-), but it's very, very close and has grown as much in three years as Windows has since 3.1.
        • It was easy for you. However, don't underestimate the amount of R&D Microsoft has put into hardware support since Windows 95. Plug and play works very well in the newer versions of windows. The only thing even close to it was the Knoppix CD (and it even bombed out on a few systems).
          • don't underestimate the amount of R&D Microsoft has put into hardware support since Windows 95.

            I would venture a guess that the hardware mfrs spent more r&d than Microsoft has in this arena. If you manufacture hardware, it is imperative that it work with Windows or you will not sell much hardware. If they support other OS's it is only an afterthought.

    • "How do you make money....." (Score:5, Interesting)

      by mao che minh ( 611166 ) on Tuesday January 21, 2003 @12:53PM (#5127927) Journal
      The same way proprietary companies do: sell the software, and make it worth your customer's while to purchase future upgrades and/or support. An open source license doesn't render software free of cost.

      IBM doesn't seem to be having a problem with their open source solutions.

      • But IBM doesn't sell Linux. They sell Hardware that runs linux and closed source software that runs on Linux. Besides making products that support Linux on a whole, how are they supporting the market share of the linux community?

        www.1001InsomniacNights.com

        • Re:"How do you make money....." (Score:5, Informative)

          by rgmoore ( 133276 ) <glandauer@charter.net> on Tuesday January 21, 2003 @01:26PM (#5128136) Homepage
          Besides making products that support Linux on a whole, how are they supporting the market share of the linux community?

          One thing that they're doing is helping developers to improve the Linux kernel to improve its performance for tasks that their customers consider important. They've contributed their journaling file system, and they're currently working on improvements to Linux scalability to make it possible to run Linux efficiently on SMP and NUMA systems with very large numbers of processors. They're also working on the applications software side; ISTR that they've been a contributor to Apache development.

          And, of course, that's just IBM. Other major hardware vendors have contributed to other Free Software projects that they see as strategically useful. Sun, for instance, is a major supporter of GNOME because they see it as a viable replacement for their crusty and outdated CDE desktop. Intel has contributed to GCC and (IIRC) the Linux kernel, specifically to help give them better support for the IA64 architecture. NeXT and now Apple have contributed to GCC; Objective C was built on top of GCC back when it was just the Gnu C Compiler. Those are just some examples, mind you. I'm sure that there are plenty of other hardware makers who have contributed to Free Software because it makes plenty of business sense for them to do so.

      • I think the point is, you CAN NOT run a business by selling GPL'd software. It is impossible. All it takes is for one person you sell it to to put it out on the internet. All GPL'd software can legally be copied and redistributed.

        • This depends on how strictly you want to take the description "selling GPLed software". People are willing to spend decent amounts of money on Linux distribution boxed sets despite the fact that the same disks can be downloaded from the net or purchased for much less from a third party. You can argue that what people are really paying for is the documentation and the update services those distributors offer. Maintaining a coherent distribution where all the software plays nicely together and is patched against the latest bugs and vulnerabilities is tough, and people are willing to pay to get such a thing. That's a close enough approximation of making money by selling GPLed software that it seems pedantic to argue otherwise.

        • you CAN NOT run a business by selling GPL'd software. It is impossible.

          The point is you cannot be the next Microsoft by selling gpl software, but just because you cannot become the richest man in the universe does not mean you cannot build a decent business.

          The best model so far is the Lindows strategy:

          1. dumb down Debian to bare minimum, and change the names of the apps to "cd player", "email", and "Word processor" so people who are afraid to click on things they do not understand will not be afraid to click on them.
          2. sell subscriptions to the 1click download site
          3. avoid at all costs the impression that you are just another "distro" (even though that's the simple truth)
          4. market to people who really don't understand what they are getting, so they won't really understand that they don't have to pay $ for the OS.
          5.Profit! For real.

          Someone is going to eventually make the breathrough to the mainstream, and that company is going to have a lot of power over what people do with thier computers. Imagine if the bastards at RealPlayer put out a distro, and it became hugely successful, and you can imagine some of the ways that a company could make a few bucks off of gpl software. Geeks can always roll their own, so marketing to geeks isn't the answer, marketing to the average luser is potentially very lucrative, just not as lucrative as proprietary software, but neither is it as expensive or risky to produce.
    • 1) I don't see that there's any reason to base a business purely on open source. You can write proprietary software AND open source software (e.g. modifications to open software you interact with).

      2) Even if for some ideological reason you choose to write open source software only, you can do it on a fee for service basis (e.g. other people who need custom modifications but don't have the wherewithal).

      • 1) I don't see that there's any reason to base a business purely on open source. You can write proprietary software AND open source software (e.g. modifications to open software you interact with).
        So far it hasn't been easy to do that. Look at Sun and Corel and their efforts to sell Linux-based office suites. It's largely an issue of demographics. Linux users have proven to be a poor customer base because it's hard to sell to users who are already used to getting everything for free. There is also the inherent problem that as soon as you develop a popular app, someone is going to make a free alternative and you won't be able to compete.

        2) Even if for some ideological reason you choose to write open source software only, you can do it on a fee for service basis (e.g. other people who need custom modifications but don't have the wherewithal).
        I think you vastly over-estimate the market for customized software. End users aren't going to pay for stuff like this, so you immediately eliminate a big chunk of your customer base. I'm not saying some businesses won't want it, but they aren't going to pay an arm and a leg for some silly feature if the free version works almost as well. And you neglect the oft overlooked fact that developing a GPL'ed feature gives them zero advantage if their competitors use the same software.

        -a
        • Amen.

          Been there, done that.
        • Look at Sun and Corel and their efforts to sell Linux-based office suites.

          This is really irrelevant. Both tried to sell these packages as proprietary commercial software first and failed at that too. Bad software is bad software; open source or not.

          I think you vastly over-estimate the market for customized software

          Perhaps. Or perhaps you're completely nuts. There are -- for example -- over 300,000 users of Macromedia Director -- an expensive niche multimedia development tool that can only be used to create customized [multimedia] software.

          SAP turns over -- what? -- a billion a year writing customized software for clients.

          Microsoft goes to significant effort to provide a number of fairly sophisticated development tools for its Operating Systems, and sells hundreds of thousands of SKUs to corporate users.

          And then there's all the Perl, Python, Java, etc. etc. programmers out there.

          Just exactly what do you think all these users are doing?
    • I'll bite on this troll.

      You don't sell software.. You sell the development services and write custom coding to fit a business.

  • Standards? (Score:3, Interesting)

    by mcoko ( 464175 ) <mcoko15 AT yahoo DOT com> on Tuesday January 21, 2003 @12:48PM (#5127895) Homepage
    I see an issue here that is similar to all of the problem people have with Windows.

    IMO, there are 3 distinct pieces to a computer. The Hardware, OS and Software. We all hate M$ because they Have crappy software that only runs on Windows and they force good companies to develop software for there OS, which alot of people don't like. That would be fine if there was an alternative OS to use with the same software.

    Similarly If you use Linux/Unix software you can only use it on Linux/Unix.

    What I see as the next revolution is some sort of Stanard Interface between OS and Software. This would allow for new companies to startup that create OS's by the handful allowing for more competetion, profit and cheaper prices which all fuel innovation.

    This is similar to Java, but Jave fixed this with a compiler solutions.

    Maybe some sort of OS/Software interface Object can be created to make the connection. That way you choose the best OS and the best software you want.
    • I agree that this would be a great thing to happen, but what happens when people decide that interface translater object is too inefficient. Will they create another such interface to solve the issue? And then have a translator that translates to the second interface? As you can see over time this could become very cumbersome and would only be useful for the newest software.

      www.1001InsomniacNights.com
    • What I see as the next revolution is some sort of Stanard Interface between OS and Software....This is similar to Java, but Jave fixed this with a compiler solutions.

      This is exactly why Java is slow as hell. More layers means more overhead.

      Maybe some sort of OS/Software interface Object can be created to make the connection. That way you choose the best OS and the best software you want.

      Wine and Cygwin are something like that. And yes, they're both slow as hell (buggy as hell too, but that's another story).

    • I don't think having standard interfaces is really that bright of an idea. Sure, it'll allow software companies to create software that works on multiple OS's, but think about it. You have linux and Windows. Windows has it's large userbase, but at the same time, Linux has the power and speed. It also take a little more to understand. If they were based on the same standards, we would get software that would have to deal with the limitations of the lesser OS. The whole idea of having more than one OS is to create a better OS. Compitition speeds creations. I would rather have to deal with software written for one Os or the other, than deal with software written for both with the limitations...

    • Re:Standards? (Score:4, Insightful)

      by zulux ( 112259 ) on Tuesday January 21, 2003 @01:19PM (#5128074) Homepage Journal
      This sort of exists already:
      There are really neet libraries that abstract the OS to a vague blur. I forget somtimes that I'm using Emacs/Cygwin a Widnows XP-based laptop to code for a Unix/Mac/Windows client that communicaes to a SQL server that could be on any OS.

      Increasingly, the OS is becoming irelivent.

      MS knows this and wants to push their own abstratios laywer, with a new set of lockin : .NET and all of the .NET Microsoft Libraries.

      Beware.

    • Isn't this exactly what the Portable Operating System Interface (POSIX) is all about?
    • You mean POSIX? You ought to try it sometime. "Write once, compile everywhere." It's only drawback is that no one wants to conform to standards they didn't write.
    • Wasn't Taos supposed to be just what you're talking about, or was that mainly hardware (not OS) independent program execution?

  • Golden Penguin Bowl? (Score:5, Funny)

    by burgburgburg ( 574866 ) <splisken06@nospAm.email.com> on Tuesday January 21, 2003 @12:49PM (#5127902)
    I got 5 large riding on that. I gave Red Hat with 8 points.

    I hear they got Angelina Jolie (dressed as her character from Hackers) to sing the National Anthem, and MIT Marching Band for the half-time show.

  • it's called the killer app ... (Score:3, Interesting)

    by HealYourChurchWebSit ( 615198 ) on Tuesday January 21, 2003 @12:50PM (#5127913) Homepage
    Amongst things touched upon are the open-source business model, how vendors will be tempted into locking in customers into their offerings, and other things.

    Not until there is agreement and cooperation between the gnome & KDE contest -- and not until Star/OpenOffice begins a concerted campaign to replace MS Office (e.g. marketing, money, superbowl advertising) -- not until those things happen will Linux win fealty.

  • Open-source ethics (Score:5, Interesting)

    by Neophytus ( 642863 ) on Tuesday January 21, 2003 @12:52PM (#5127917)
    Amongst things touched upon are the open-source business model, how vendors will be tempted into locking in customers into their offerings, and other things
    Part of the good nature of the open source community is the sense of freeness and sharing. Locking people into certain 'offerings' and related things is completely against these values. All the hassle of open source without the benefits of the community that surrounds you - rather pointless if you ask me.

  • Are the analysts really the experts? (Score:4, Insightful)

    by kingLatency ( 624983 ) <alex.kahn@comc a s t.net> on Tuesday January 21, 2003 @01:00PM (#5127981) Homepage
    These guys have to figure out how they're going to generate some money

    What Red Hat and SuSE have to do is create an annuity revenue stream

    These seem like the kind of things these companies either already know to do or already know how to do. It seems like these analysts aren't really providing any new insight. Obviously Red Hat and SuSE have to make money... After being in business for years, surely these guys know a thing or two about how to stay afloat.

    • Obviously Red Hat and SuSE have to make money... After being in business for years, surely these guys know a thing or two about how to stay afloat.
      Yeah... do a massive public offering when your stock is overvalued, stick the money in the bank, and then slowly bleed to death while you wait for the economy to recover. That's Red Hat at least.

      I dunno about SuSE; they're a privately held company so they don't release revenue figures. They don't have any jobs posted on their website though.

      -a

  • Development Costs vs. Profits (Score:5, Insightful)

    by sterno ( 16320 ) on Tuesday January 21, 2003 @01:16PM (#5128059) Homepage
    From the article:

    These guys have to figure out how they're going to generate some money," said Aberdeen analyst Bill Claybrook. "If Red Hat Advanced Server is part of a deal with Oracle (9i database software) on a cluster of four Dell machines, each of which has four CPUs, Oracle gets $60,000 a CPU, or $960,000, Dell gets $150,000 or so for the hardware, and Red Hat will get $10,000.

    The dollar figures are totally meaningless here without a context for what the costs were going in. How much does it cost Dell in time, resources, personnel, etc, to build that server? How much did it cost Oracl in developer hours to get their product out the door?

    The thing is that, revenue numbers can be a hell of a lot lower for an open source driven business and still be profitable because their outlays are substantially less. Sure RedHat pays for some development work on Linux, but it's not nearly the amount they'd have to pay in if they were a proprietary software vendor.

    RedHat probably has lower margins than Oracle, but does it really matter? As long as they make profit sufficient enough to maintain the business over the long term, it's irrelevant. Sure, RedHat may never be as big as Oracle or Dell, but maybe that's a positive sign of change in the industry. Less people working at software companies, and more people doing real work with the software that is now cheaper and higher quality.
    • What's embarassing is that Red Hat is the most successful OSS company out there and they still can't make a profit. What you don't seem to understand about starting a business is that the reward has to compensate for the risk involved. Maybe Red Hat will make a profit someday, but I doubt they'll ever make billions.

      You see, to vindicate a business model it is not enough to show that it worked once. For every financially successful OSS product there will be 10 failures. If the best a successful OSS company can hope to earn is a couple of hundred million (in an industry where the previous market leader was making billions) then the risk is quite simply not worth the reward.

      -a
      • Maybe Red Hat will make a profit someday

        Check this out...

        http://www.thestreet.com/_yahoo/tech/software/10 05 9137.html

        Someday is here.

        Enjoy,
        • It's a step. They've been making money above the line for the last year, but suffering a net loss. This is their first net profit, but quarterly earnings are BS. They made a $300k profit... big deal.

          Let me know when they:

          1. Make an annual profit.
          2. Recover the $140 million they lost last year.
          3. Recover the $279 million they have lost total.
          4. Provide a fair return on the $600 million or so that has been invested in them over the years.

          -a
          • Redhat was a profitable company before it went public iirc. Usually when large companies start (or when small companies go public in order to become large ones) they are not profitable for a number of years, because they are sinking so much money into expansion and gaining marketshare/customers. The whole point of issuing stock is to get the money the company needs to invest in order to expand. While the expansion is happening, you have current costs but future benefits. So complaining about redhat's past "losses" isnt really a factor, investors are making a long term bet that redhat will be a profitable company. It was a given that redhat would loose money for a while. Actually its quite amazing the redhat broke even in a down market when many traditionally profitable companies have been seeing lower earnings.
            • Whether Red Hat was profitable prior to their IPO isn't really relevant to this discussion. Most companies get financing in order to fund new products or buy other companies. When you start a new product, you spend a lot of money, but in return you develop assets which have book value. Red Hat doesn't have tangible assets because they don't own the software they produce.

              Red Hat spent most of their money on sales and marketing. S&M basically erased their entire profit margin. So this suggests that they are either selling their products too cheaply or they are really bad at S&M. But they probably can't sell them for any more money because they are still selling something that you can get for free. I don't see them making in the 100s of millions any time soon.

              -a
      • Actually, the most successful OSS company out there is IBM. Granted, they are by no means a pure OSS company, but they understand how you leverage OSS effectively. They use their open source products to build a platform upon which they sell proprietary products and consulting services.

        It is impossible to run a business selling something that people can get for free. You have to add value to it somewhere or people aren't going to bother with it. I can download RedHat 8.0 from the website, so why would I buy it? I might buy it for support. I might buy it to take advantage of the update tool they have available for it. But they have to give me a reason to send them a check other than out of the goodness of my heart.

        RedHat started off as a company doing the very low end of this business, just packaging and selling the software and now they are trying to work their way up the food chain. They take their software and bundle it with higher-end proprietary products, they offer support, and they offer consulting services. It's going to take a long while to build up consulting services, so it makes sense that, for now, they have a hard time breaking even. Eventually having an established brand and knoweledgeable people will make it possible for them to succeed.

        • IBM is such a big company that it is impossible to look at their financial reports and figure out How much of their revenue comes from Linux consulting. Additionally, IBM invented FUD and they are excellent snake oil salesmen.

          IBM is still a different category from Red Hat, though. I don't see them developing OSS products. They just target Linux as the OS.

          -a

          • IBM is such a big company that it is impossible to look at their financial reports and figure out How much of their revenue comes from Linux consulting. Additionally, IBM invented FUD and they are excellent snake oil salesmen.

            You have a point, but my sense of things that IBM at least has a good sense of how to leverage OSS. They don't tend to put OSS investment into products that can legitimately compete with their proprietary apps (DB/2, WebSphere, etC). But anything that can make it cheaper and easier for people to run those apps is all good for them.


            IBM is still a different category from Red Hat, though. I don't see them developing OSS products. They just target Linux as the OS.
            Actually the do quite a bit of OSS work. Eclipse is a big project by them to develop an open source Java IDE environment. They contribute heavily to existing OS proejcts like Linux and Apache. For a quick list of OSS stuff they work on, check out this link [ibm.com]
    • RedHat probably has lower margins than Oracle, but does it really matter?

      You're right, it doesn't really matter. Margins are nice and they might indicate that you are in a strong bargaining position but they are not an indicator of financial success by themselves.

      For example Walmart has margins that are really quite low but is anyone going to argue that they are not a very successful company? Of course not. Because their business model is actually predicated on having lower costs than their competition. If it costs less to operate, then they can drive prices down to a point where the competition cannot match them. This means that their margins aren't going to be great, but they don't depend on having large margins anyway for success.

      Red Hat has the potential at least (all other things being equal - which they aren't) to do the same thing. Given equal products for a given customer need, Oracle cannot compete with Red Hat on price. And since not all users need all the extras Oracle provides, that puts Red Hat in a good position to undercut Oracle. This doesn't mean Oracle is going to go out of business, but it means that there is room for someone like a Red Hat.

  • Open Source Business Model (Score:5, Interesting)

    by DeadSea ( 69598 ) on Tuesday January 21, 2003 @01:17PM (#5128064) Homepage Journal
    I have quite a few bugs in Mozilla that I have reported, or for which I have voted, so I get quite a bit of email from Bugzilla. I have seen an increasing number of posts of people who attach a comment to a bug saying "this is really important to me, it needs to be implemented ASAP". The usual response is "Please stop spamming us. We have limited resources and will get to bugs in time (possibly a long time). If you really want this bug fixed, fix it yourself, or pay somebody to fix it for you."

    The problem with this is that there are not many people who (even if they are programmers) are up to speed with the Mozilla code and can fix bugs. This mostly rules out do it yourself. That also means that it is probably rather expensive to hire one of these people for the time it takes to fix some bug. I'm thinking $200 to $5000 depending on the amount of work it would take (especially for some of the more far reaching feature requests.)

    How hard would it be to add a distributed "pay for development of feature" option to open source projects? The idea is that if 1000 people want a bug fixed and each can pledge $1 to the person that fixes it (and contributes the open source to the project), you might be able to get a lot of bugs fixed and have some revenue stream for developers.

    The first hurdle is setting up the pledge system. I don't if Paypal or another mircopayment system could be rigged for "pledge mode".

    After the pledge system is in place, you would have to decide who can say if a bug is "fixed". It can't be the person that gets the money. It could possibly be a vote of the people paying, or it could be some designated third party.

    People contributing money would probably also want a time limit on their pledges. "I'll pledge $10 if this gets fixed in the next three months", but not "I'll give $10 whenever this gets fixed".

    Does anybody here have any insight as to how this could be implemented?

    • First, I think it would have to be initiated by someone offering to fix a bug. Bugzilla already shows bug popularity, right? So a programmer makes a post somethingn like, "I'll fix this bug when this tip jar < link > reaches X dollars."

      I don't think a pledge would cut it. You would either have to have the dollars held in escrow until the work was completed or just pay the dollars up front. The latter option would be dependent upon the reputation of the person offering the service. I think that's how other "software ransoming" schemes have worked. Escrow would be tricky because who's to say when the work it done to everyone's satifaction?

      Actually, it could be really interesting if voting for bugs could include monetary value. Programmers could be like bounty hunters, looking for the bugs which have racked up the most loot. They pick a bug, fix it, then collect the loot. For such a thing to work, I think the Mozilla people would have to collect real money from the bug voters beforehand, perhaps a small account (~US$20) from which bug voters could pledge dollars. The Mozilla people could distribute the funds when they think the bug is fixed. Maybe Mozilla could make a little money, like a small initial setup fee then a percentage of each bounty payment. I don't know much about how the Mozilla project is run so I don't know how off-base this is.
      • I'm with you, but I don't think that anybody would pledge anything if they didn't get the money back if the bug were not fixed. Holding the money in escrow might work, but paying the dollars up front would not. Know of any escrow services that would be willing and able to work with many small payments for one item?
      • An other and maybe much simpler idea, is to imagine a subscription scheme. i.e if you have a paying account for Bugzilla, then you can vote for bugs, the most popular bugs will have a priority in treatment. Every month you will have a new credit you can spend the way you want. This is not very different from the Mandrake club, apart that in Mandrake it's only used to vote for packages which will be included. The subscription model is intersting because it's easier ta manage, and will assure Mozilla a loyal base and a constant money feed. It will be then of the responsability of Mozilla Organization to share the subscription money collected among developers the way it suits it.
      • Programmers could be like bounty hunters, looking for the bugs which have racked up the most loot.

        In a perfect world, that may work, but this isn't. People will go for the highest dollar mark, missing the cheap little bugs that may make the difference in a programs sucess. What if there is no money on a critical bug while people are piling a goldmine on something stupid like window transparency or a faster in-line find.

        Men work only for that which will bring them glory, riches, or both.
        • Men work only for that which will bring them glory, riches, or both.

          As things stand, the men in question only have the option of working for "glory" or perhaps "fun." If fixing a bug isn't going to give them either, it doesn't get fixed. The idea that a person or company will pay someone to fix a bug is unrealistic. This option makes the possiblity for another motivation, "riches," more realistic by spreading the financial burden over many people. One would hope that people would pledge money to fix the bugs that aren't getting fixed because there's no fun or glory in it.

          Note that I'm not suggesting that all bug votes include assigned monetary value. I would expect most bug votes would keep their 2 cents metaphorical. I don't think there would be any goldmines, everyone would see what a bug's total was and if the total was in the hundreds of dollars, it would make no sense to pledge more until it remained unfixed for an extended period of time. Money won't replace glory, critical bugs will still be fixed for non-monetary reasons. And if a bug is really critical, it's probably critical to someone who can pony up some cash to see it fixed.

          Short of having programmers on salary, some bugs just won't get fixed because no one capable of fixing them wishes to do so. The monetary reward complements the existing motivations, it does not replace them. What could happen is delays in bug fixes, programmers could wait to see how high the total gets rather than jumping in and fixing it right away. Of course the programmers would also be competing so they'd have to weigh waiting against the possibility someone will be them to it. Anyhow, it would be smart to keep the default pledge totals small, if the sums really became large it could hurt the community. People will do bad & stupid things when there's serious money at stake.

    • I think this is a very interesting idea, and if it was easy and safe enough to make the transaction, I would certainly participate in this.

      I think the money should be up front, so that the hacker who does it gets the money the moment when bug is marked as fixed.

      The problem is the implementation, and this goes for micropayments in general. It has to be easy and safe, and we have to have todays financial institutions into it, so that money can be transfered from your account. The problem is that their costs in performing a transaction is pretty much constant regardless of transfered amount, and this cost is currently prohbitively large for micropayments. That is a very big problem.

      OTOH, I think we must get something like this working. If we don't, the *AA's are going to destroy everything, so we have to make something that allows people to make money without taking people's rights away. "They" won't do it, cause they are allready making huge piles of cash, so it is up to us to do it. When we have proven that we make money, then they will come running.

    • Although your idea is novel, I believe this solution will only hurt the quality of Open Source Software and Free Software and thus the movement. It already has a reputation of being buggy and difficult to use

      A few rotten developers might get the idea to purposely plant bugs so they can "fix" them later and profit. Or they may make code extremely difficult to read and overly complex so that only they can work on the project. This may work with corporations such that Transmeta goes to Red Hat and says "Here's 20,000 USD, make a kernel that supports 15 of our new processors" (And corporations like Intel already do that, as pointed out by one thread).
      When this ideology gets down to SourceForge and home brewed projects, someone may say "here's 20 bucks, make sure your word processor can cut and paste."
      That is when we get hurt.

      Development trees may include less features with hopes that some wealthy individual will finance the growth of features.

      Donate to your favorite project as a whole, not to the individual developers. Those funds pay for servers and other stuff too.
      • Open Source software is so buggy that the fear of an unscrupulous developer inserting bugs purposefully is just unfounded. Thats like fearing some farmer would add fertilizer to the farmlands around the nile river. That farmland is some of the most fertile in the world. Its just not something you need to do.

        I'm pretty sure a developer could make more than enough money to buy a ridiculous amount of Bently's and Jaguars from just fixing the inherent bugs in OSS and suppliment that income by adding missing features that have existed in proprietary software for decades now.
  • While the heart of Linux itself legally must be available for free, nearly every major computing company is trying to find ways to profit from it.

    Okay, I understand it's a business publication, but they should really know the difference between libre and gratis.
  • 1) Linus Torvalds is one hunky piece of gourmet man-candy. [goatse.cx]
    2) Richard M Stallman cannot say "GNU/Linux World" three times fast.
    3) This year will feature the first shooting spree in Linux World history.
    4) As a result, next year's Linux World will be devoted to the memory of Bill Claybrook of the Aberdeen Group [aberdeen.com], gunned down while interposing his body between the shooter and the visiting school children from Greater Houlton Christian Academy [linuxjournal.com].
    5) This will cause all Linux users to be branded as terrorists, even though the shooter is a disgruntled BSD user, because the authorities don't even know the difference.
    6) When MS memos surface planning a publicity stunt / shooting spree at one of their own trade shows, no one will even care.
    7) MS has secretly rented a theatre to showcase their line of Linux apps, including a Windows/GUI that runs on top of the Linux kernel. [pbs.org]
    8) No such products exist. Those entering the theatre will be brainwashed.
    9) The Society of Women Engineers [swe.org] is sponsoring a special recruitment event for high school aged future women engineers in my hotel room; any woman aged 15-19 with an interest in pursuing a four year degree in engineering or the applied sciences is welcome to attend. Dress should be informal and not too complicated as I intend to be blasted.
    10) Despite the best efforts of the conference organizers, funding was unavailable to spike the drinking water in the hotel with acid. Your generous donations [debian.org] could help make next year's Linux World that much more surreal.
    11) Spinal Tap [spinaltap.com] will play a free concert in front of the Expo on the last day. Yes, the volume will be turned all the way up to 11.

  • linux is dying (Score:1, Funny)

    by Anonymous Coward
    Boy, attendance and interest in linux sure is down from the heydays for 2 or 3 years ago. It's a good thing BSD is picking up the free software banner and carrying it forward into the future.

  • Are you whining??? (Score:1, Offtopic)

    by Anderlan ( 17286 )
    "I'll be out there tomorrow for the Golden Penguin Bowl, as well as judging exhibitors. Busy day."

    Yah, must suck to be Taco. Damn, glad I don't get to go to all the shows for free, am not just married, etc, etc.

    Maybe I'm just being negative, and "Busy day." Is intended to be positive. But seldom does anyone say "busy day" and mean it amelioratively. Perhaps "Finally, a day where I do something other than sit on my fat ass, not correct misspellings, and double post old stories!!!" would have been more clear.

    ;-)

  • Well, aside from the fact that SuSE has bundled Crossover - you can now get OpenExchange [suse.com] to manage "enterprise" email in a format that is compatible with MS Outlook and apparantly PDA's as well. Does anyone know if this really works? It claims to be "open" but I'm wondering what that means exactly.

  • Now better than proprietry? (Score:5, Insightful)

    by Michael Woodhams ( 112247 ) on Tuesday January 21, 2003 @04:04PM (#5129401) Journal
    From the article:

    "HP ... will announce customers including ASP Futuro Bolivia, which uses Linux and Oracle 9i RAC using four, four-processor HP servers to manage the pensions of about half the retirees in Bolivia."

    An interesting point here is that once you've paid for an Oracle 4 proc license, the cost of adding a proprietry Unix likely won't even change your second-most-significant digit in the price. This means these people believe Linux is better than proprietry, independent of the free/gratis factor.
  • There are some media passes printed out for the fickle beasts. No-one wanted to come, and then suddenly word gets out that Linus is coming.. and oh, guess what.. there's hundreds of people calling up wanting tickets.

    Official word.. there are door sales. About 50 of them.. First come, first served. Flying in next-day from Auckland doesn't count. This conference was announced months ago.

    Of course, you would be well advised to get there within the next hour if you wanted to get in and hadn't registered already ;)

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