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Red Hat Software Businesses

Business Week on Red Hat CEO Bob Young 38

Posted by Hemos from the sources-say-he's-a-scientologist dept.
A reader sent us a recent BusinessWeek article interviewing Red Hat's Bob Young. More indepth then most of them usually, I learned some of the odder tibits about Red Hat interesting, including the toliet in the first apartment and other such stories.
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Business Week on Red Hat CEO Bob Young More

Business Week on Red Hat CEO Bob Young

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  • IBM has made a large portion of its income in the support of it products. Nobody buys old mainframes, but lots of companies still have them. Along with this, Linux provides an excellent upgrade path for said systems, and specializing in tailoring the environment certainly can be very lucrative. SAP/BAAN systems are a classic example of this ideal in that they require a large threshhold of expertise to setup and configure correctly. If it runs forever, that much the better. An old boss of mine once observed in frustration that he'd much rather pay a nominal 'peace of mind' fee to a software company whose products required little or no maintenance as opposed to feeling the VAR's worth through countless hours of sweaty palm troubleshooting of critical systems. If Redhat makes it easier for corporate america to sleep at night, they *WILL* make money on service and configuration/installation contracts. All it's going to take isthe right kind of marketing, and god help Microsoft if Redhat's IPO kicks over well and they apply the dollars well. On that note, I'll say I do hope they maintain the R&D budgets and continue to contribute to the Linux community technically rather than depending on GNU and other sources. Good luck to them in their IPO (I know for better or worse I'm buying in *LOL*).
  • that Young needed to point out that theres no Micros~1 technology in RedHat. I'm sure that will be a shocker to some people.... I also found the part about the place that has 100 boxes deployed without a service contract interesting. This is what happens when you have competent IS staff, I guess.
  • First and foremost Red Hat does not sell Software, they give it away for free.
    ... Red Hat Sells Marketing and packaging...
    Everything you say sounds great.

    The problem is, nobody has reached this point yet! Red Hat AND SuSE both report that their biggest revenues come from the sales of Software. You're analyzing Red Hat the way they see themselves, or where they wish to be. There's nothing wrong with that, but your presentation made me say "right on! ...oh wait...." because I WANT Red Hat to be a service-oriented company...but right now, they're making money by selling CDs full of software...and in my book, that makes them a software company.

    So...the real question then becomes, can they GET there? Can they switch from being a company that sells CDs with books for a living to a company that provides all-encompasing enterprise-wide solutions to corprorate problems? ( buzz... [sapien.net])

    I think it's going to be a lot harder than people think.

  • Why not share your knowledge by helping others with their new Linux systems?
    I think you're missing the point here. To answer the question using my own personal views, it's because the learning process is more important than the knowledge gained.

    I would be hard-pressed to name a UNIX guru not willing to share experiences and help. However, simply saying ``Joe Newlinuxuser wants to set up apache, I'll go ask him some questions and do it for him,'' is insufficient, and this is what a lot of these tools do. It assumes that Joe Newlinuxuser has the background to know that he wants Apache installed, and that he wants to do something relevant to his larger goal, etc. The UNIX guru rather feels that, in order to give Joe the proper background to be able to ask relevant questions and to be able to get relevant things done in a secure and efficient manner, Joe needs to spend some time in the trenches.

    An easy installation, easy system administration, etc. are valuable and useful tools. But they don't equate to ``intelligent sysadmin in a program.'' I tell people to not use an easy Linux install for the same reason I don't tell people to use Visual C++: there's so much you need to know for anything other than a routine drag and drop moment, that most drag and drop utilities can't tell you. A lot of people that learn to program using Visual C++ or Borland C++ never know what Makefiles are, and how you can get them to work magic peripheral too, but a necessary component of, compiling and installing a piece of (software/documentation) or doing something.

    In each simplification step (assembly->C->C with lots of useful libraries->C++->Borland C++), there are assumptions made that don't always apply. When doing something as important as secure system administration on a machine connected to the internet, just as with software that is supposed to compile on five different platforms, you need to know the assumptions made, and how to get around them.

    My own personal beef with Red Hat has nothing to do with this, but rather I don't like RPM's and I don't like the defaults they set and it's a pain to change all of their assumptions to all of my assumptions, or stick in the tools simplifying toosl that simplify the things I want simplified. In a phrase, their distro is fine but not the one I want to install.

    There is a place for easy tools, simplification, etc. -- and it isn't in increasing the audience of the lower level tool. It's in making a busy, well-informed user of the lower level tool more productive.

    In my (obviously not) humble opinion, let Red Hat reap massive benefits and continue to funnel that money into Linux, and I will like and support them. If they just make massive amounts of money, no skin off my back; and if they just die, my sympathies to a company that was doing some nice things.
  • >Red Hat AND SuSE both report that their biggest revenues come from the sales of Software.

    But, at least in Red Hat's case, isn't that selling packaging (handy CD and printed manual) and basic support?
  • OK I know that the "from the xyz department" lines are just jokes, but I don't think it's a good idea to start rumours about someone being involved with _that_ organisation.
  • Don't go there, Spyky. Are you *really* prepared to subject all employees of all distributions to an RPC (Religious and Political Correctness) test? Dealing with multitudes of licenses is bad enough without having to account for the beliefs and/or habits of everyone who had a hand in making my systems run.

    ---------------------
  • "When was the last time you saw a Windows user spend all night helping a Newbie do domething simple and tedious to the rest of us?"
    Well, I used to be a lab monitor at the local community college, does that count?

  • Support For Corporate Environments (Score:4)

    by Pretender R*S ( 8816 ) on Thursday July 01, 1999 @07:34AM (#1823534) Homepage
    As far as I understand, Bob Young has stuck by a couple of key principals.

    Red Hat does not sell Software.
    Linux is a loss leader for a deflating market.

    First and foremost Red Hat does not sell Software, they give it away for free. I downloaded 6.0 of their website just fine. Didn't pay them a dime. They were happy to have me install it at my work even though they didn't know I had it.

    Red Hat Sells Marketing and packaging. Just a company in Seattle we know, but Red Hat doesn't make any pretentions. People by label and brandname, and in return get piece of mind. If Red Hat can stick by that they will do reasonably, they will FAIL to become a monopoly, and they have a chance to make money. People will buy Branding, remember designer Blue Jeans in the 1980's? People payed lots of cash for manufactured images.

    #2

    Redhat wants to deflate the computer OS market, they want to take a (can't find the numbers from the Sizing the Linux Market article that Bob Young wrote right now) large market and reduce it to 1/10 its current size (total $$ per year spent on server software) and he believes that in that Market Red Hat will take over a larger and larger share. Also it is reasonable to assume that in the Internet server market as prices drop more people will want more servers (small business under 30 people which the plurality of people are employed). Again they can make lots of profit per sale, not have very many sales per people using the product and as long as they stay lean still make a profit.

    Also in a market where the services/products are being commoditized (and since they are standards they can be implemented by multiple vendors, increased compition, lower prices, lower profit margins) the biggest way you distinguish yourself is via "exteriors". The biggest exteriors are support/professional services. Will everyone buy them? NO

    Most people will never buy proffessional services, but if you have a brand that establishes you as the "Expert" (Red Hat is the biggest distributer of Linux in the US, that makes them an expert), then peole will come to you. It is service where Red Hat is really taking on Microsoft! Microsoft has legendarily poor service especially for corporate support, it is Digital/Compaq who has more NT Service Proffesionals than Microsoft, It is IBM who is selling massive NT Service solutions and your handfull of the usual consultancies (PriceWaterhouseCoopers, Anderson Androids, .... ) who are actually supporting and servicing NT.

    And it is those orginizations who have their hands tied. Linux offers them freedom to produce "value added IT services" It alows them to fix late and broken projects by working on the OS, and who are they going to turn to for experts? Whoever has the best branding!

    From what I can see Red Hats strategy isn't pretty in the Freedom Software sense, but it is not at odds with it. Red Hat is a scary marketing company, but they are doing the right thing. Red Hat is not a tech company but a marketing company, they need some techs so they have something to help drive their marketing. I wish them the best of luck, as I would love to see a world where the best product wins, and Red Hat is helping that come true.
  • ...the paper version of it in the recent BW?
    What I have read in BW yesterday had added hints on how the mighty MS can crash competition. The very last phrase by Mr.Young, about how he does not fear MS was commented that he should remember that computer industry landscape is littered with the bodies of companies who thought likewise.

    Indeed, guys, compare that to the printed version. WTF does it mean...
  • Furrfu! Another group of examples of why Linux users keep getting a black eye.

    Nice article, by the way. Having met Bob at two different LUG meetings, I think he's the best evangelist to the Corporate community.

    Jerry
  • I use NT here at work. The NT crowd I know constantly kids/picks on the Win 9x crowd about their OS. Here it's mostly for fun because the users don't really have a choice.

    So, it does happen, but not to the Linux distro extremes.
  • Somebody got up fricking early and his first thought was that RedHat sucks ??

  • I'm also sick to death of hearing how "awful" RedHat is. I've heard countless times how everyone should start with Slackware or some other difficult distro to "learn". Then there's the "oh my gawd! They're trying to make money!" folks.

    If it wasn't for RedHat, a lot of the new people in the Linux community wouldn't even be here. Getting assaulted with the all the details of UNIX isn't the best way for everyone to learn UNIX. Sometimes people like handholding. Maybe they decide to use Debian later. Maybe they don't.

    Why the hell do people care which distro other people are using?
  • Stupid me, I thought that Linux users use Linux because they're *intelligent*. fuckin' /. ACs are the blight of the linux community.

    kmj

  • Comment removed based on user account deletion
  • True, Windows Users tend to love all windows versions, but they aren't a community. When was the last time you saw a Windows user spend all night helping a Newbie do domething simple and tedious to the rest of us? I haven't, but Linuxers generally do, regardless of the Distro.

    BTW, that rivalry does exist in the AOL world. Compuserve users tend not to like AOL, AOL users tend not to like AOL, and then there are the radicle users who not only think AOL is the "best ISP" but they also think that AOL should be integrated into IE5, which they think is "the best browser"

    c'mon, its friendly competition anyway, like at Apple, the Apple II people Vs the Macintosh guys. Its the same with linux really, we all compete with each other, and that is what helps our OS become great, because of the Competition.
  • I'm failing to understand the diversity in the Linux community. Personally, I use Windows at home and work. I have no choice at work, but at home I'm testing a few different configurations. Win box, RedHat box, and BeOS box. I personally don't have any trouble with Windows on my home machine or at work. The only time I really see blue screens is when NT boots. I find it odd and somewhat hypocritical that there is this element that will proclaim that Windows sucks, blah blah blah, yet turn right around and reinforce that different flavors of their beloved Linux sucks along those same lines. How widespread is this amongst the community? I started out attempting Slackware about 4 years ago and found the install process tedious and not worth my time and training my users worth even less of my time. After putting it on the back burner for a couple years I broke down and bought RedHat a couple months ago and yet to find fault with it. Amongst the Windows crowd I never hear Win95 users say "NT sucks ass" or NT users who say things as intuitive as that first poster said, about the other flavors of Windows. So why is this the case in Linux? Are the differences so widespread such that users of one distribution are moreelite than others? If that's the case then I've seen 100x more "community" within the Windows crowd. And before you jump on me, I've never browsed the Linux support newsgroups, for obvious reasons, so maybe what I'm looking for is there :)
  • Again, I must apologize for my ignorance in the matter, but is there certification for supporting Linux?
  • I agree with your main point about making money from services and not products... however:

    1. IBM sold more new mainframes this year than any previous year (about 1000, I think).

    2. the fault tolerance/reliability of IBM's mainframes is really hard to beat... for instance, the CPU contains error detection hardware - if a fault is detected the CPU is shut down, the state is extracted by the OS, and the job is transparently shifted to another CPU. How many linux based systems could do that? Unix based? NT? VMS?

    3. The current rush towards E-Commerce really suits said mainframes!

    4. Linux has only recently started to head towards monster servers. I expect it will improve really soon, but it's not there yet... follow the links from the recent slashdot story on the PC-Week followup to the mindcraft study for details.

    I use linux at home and at work (I installed and maintain our group server, which replaced a tired old SCO 3.2.4 server), but being the best solution there doesn't make it ready to replace mainframes or really large Unix or AS/400 or VMS servers.
  • And I don't think Redhat would benefit at all from leaving SC.

    Pedantic note: NC.

  • [I found it ironic] that Young needed to point out that theres no Micros~1 technology in RedHat. I'm sure that will be a shocker to some people....

    You mean the ones that think Gates invented BASIC and DOS, right? =) I can see it:

    Yah, so, like he invented the personal computer, right? And, so, like he must have invented that Yoo-nicks stuff too, right?

    I guess Young felt that BusinessWeek's readers need to hear that sort of stuff.

    I also found the part about the place that has 100 boxes deployed without a service contract interesting. This is what happens when you have competent IS staff, I guess.

    ... and a stable OS. This makes me wonder if part of MS's strategy is to make buggy OSs so they can clean up on support and ... hmmm ... training support staff. That's one of the things that's bugging me these days when I go to B&N or Borders and see a wall or two of MCSE training books , most of which come from Microsoft Press. There's a racket for ya.

    As long as Linux' technical success doesn't get in the way of people making money off it (and wouldn't that be ironic!), I suppose that Linux advocates should be mentioning that place as an example of what software CAN be ...

  • No, they're either newbies or MSFT plants come to pick our brains and spread FUD.

    Will in Seattle
  • My guess is they didn't get any allotment and just want to drive the price down, so they can pick it up later at a bargain.

    Will in Seattle
    who's up for $150K in RHAT, so I'm biased
  • Yes, there's at least one company doing that. Does anyone know if they're any good?

    Given what's happened in the IT field, I've found Oracle, MSFT (yes, stop snickering), and Novell certifications are quite useful. Also Cisco.

    We know it's not that much, but the pointy-headed bosses seem to throw money your way when you get it ... so ...

    Will in Seattle
  • As we were explaining last night at a French gathering in Seattle to someone who "moved to Seattle" but lives in Bellevue (on the other side of the lake where Microsoft has its HQ in Redmond (and offices all over that side)), Redmond and Bellevue are NOT Seattle. Adobe (in Seattle/Fremont) is 40 miles away from Microsoft (in Redmond).

    All the best firms are in Seattle - all the worst are on the other side of the lake.

    Will in Seattle (the real thing)
  • oops! thanks.

    MicroLITH proceeds to the article, and realizes his goof up...
  • But you realize that those ACs aren't actual linux users, they just know someone (or heard of someone) using a distribution, and feel they must rant and rave about it. Most BBSes require Registration to post, i think these people are why that is so.
  • I reccomend that those posts be deleted. They aren't necessary. Redhat has done a lot for linux.

    Anyways, that's kinda interesting. Redhat started like many software companies, in some sort of makeshift office. And I don't think Redhat would benefit at all from leaving SC.
  • Woah, hold up a sec. Where did this come from. Is it just a joke or is this really a rumor. Can anyone tell us more about this?
    While seems rather superficial to *not* use a particular distribution because one of their leaders *might* be involved with $cientology, but with so many other great distribs out there, its just too easy too switch. That kind of rumor could really hurt a company like Redhat. Especially in the generally anti-institution Linux community where RedHat is already viewed with a certain amount of scorn among the intractable Linux purists out there, for their announced IPO.

    Spyky

  • test (Score:1)

    by wanted ( 66025 )
    just testing.. sorry

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