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Subject:  Re: RHAT, Get a Grip Date:  12/11/1999  2:36 PM
Author:  dewyn Number:  2476 of 9070

Ay caramba, here we go again. Why is it that this guy, among a couple of others, decide to make something like this their first entry into the Foolish message boards?

The standard answer is that we've been over all of this before ad nauseum. Now's the time where I tell you to go back and read the prior couple of thousand posts, get a clue, and come back when you have something new to say. But I'm not going to do that this time. I'll actually treat your questions with more seriousness than they deserve. Let the parsing begin.

Everyone seems to love a stock if it made them money, but have no explanation of how the company can make money.

Initially plausible, but ultimately shallow. I'm certain you can find a sampling of posts on this board that are purely momentum-driven or consist of baiting the other side. Those are, however, outweighed by the far more meaty posts that indicate that those involved DO know how Red Hat can make money. Indeed, the company DID make money until it started to gear up for its IPO. The question then becomes whether the business can make BIG money; that's where the business model analyses, number-crunching, and patience come into play. You've overgeneralized here.

LINUX is hard to use and has no software.

I challenge the usability claim. I can use Linux's various graphical interfaces quite easily. Having learned the command line interface and its underlying logic, I can get things done faster and easier than point-and-click. Linux also has thousands of utilities and programs to fill just about every niche of computer functionality. The real complaint here is the lack of brand-name certification, and even that is a dated objection as more and more significant brands are coming on board.

It can only be successful if MSFT is forced to publish their codes for MS/EXCEL etc.

False. It is already successful according to all kinds of criteria: functional, financial, social. The system works on all kinds of platforms and is remarkably stable and reliable. Several people make a good living or have become rich and/or famous. It has nurtured an amazing community of thinkers and programmers all over the globe. Now, which part of this was dependent on Microsoft again? Your claim seems to define success as "dethroning Microsoft"; not only is that but one measure of success, but I also challenge the assertion that it's dependent on the openness of Microsoft's code. Provide an argument to bolster your claim.

However, MSFT is famous for being second in and taking over. If courts rule for publishing their codes (unlikely), then wait for MSFT to distirbute their MSLINUX version and crush everyone. It is open code, right???

The first sentence is historically accurate. The second one is incredibly flimsy. Consider that according to the provisions of the licensing for the kernel, Microsoft must make public its changes to the source code. They would need to change the code to enable compatibility with current applications; those would have to be made public; developers would pounce and remove the advantage of application compatibility that Microsoft could boast. Microsoft thereby becomes incredibly vulnerable by itself diminishing the application barrier to entry. (Your third sentence, by the by, ignores the fact that there indeed are licensing strings attached to the free code.)

Doubt it. Look at IBM (DOS), Wordperfect, QuarttoPro, Netscape, etc. MSFT is not a good developer, but a great marketer, and they move fast when needed. If they can't crush it, they join/absorb/replace/outmarket it.

If they "join" Linux as per the above, they're in trouble. They can't absorb it because (a) it's got some fundamental incompatibilities with their OS (and worldview) and (b) it's not the kind of entity you can absorb. Their "replacement" would probably be W2K like NT's tried to replace Unix, but I suspect it's too big to scale down into Internet devices (CE would be the other option, but it's already being whipped.) As for "outmarket", they might have more of a chance if it weren't for all the PR black eyes they've had over the last several months. Keep in mind, too, that Linux and its various players have gotten where it is with virtually no marketing to the general public. Before MS could market against Linux, it'd had to inform Joe User what it is, which will do part of Linux's work for it.

So before you start investing your life savings and flant your success, explain to me LNUX's business model. This is product you can get for free, right?

LNUX is the stock ticker for VA Linux; its business model is much like Dell's. It is largely a hardware shop, and its products are not free. Red Hat Software is a distributor, among others, of the Linux kernel along with various utilities and extensions gathered from various places online. You can get the equivalent for free by either (a) collecting each piece and assembling them on your own, or (b) downloading the Red Hat version directly from the Internet where they've done all the work for you. Nevertheless, there are many reasons to pay: convenience, online help, custom design and configuration (for businesses, especially), community loyalty, etc. Moreover, I think that Red Hat itself is taking the view that the shrink-wrapped era is coming to an end. The next era is one of services and support where you charge not for one-time purchases of products but for continual business in which you help a business face its financial and technical challenges. Think of it, if you will, as outsourcing at a fundamental level. In this scenario, Red Hat continues to prosper and Microsoft fades not necessarily because of head-to-head competition but because of changes in the underlying technological terrain. Red Hat is trying to be poised to be the trusted name in that new world; Microsoft is trying to resist that world or warp it into MS's own image.

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