Disclaimer: I like Linux. I use it as a desktop OS most of the time. The only reason I still use Windows is that my job requires Photoshop and Gimp is not quite as good (yet) for professional image manipulation.Previous post focused on strength of Linux and that's where I agree enthusiastically. However, he seems to imply that if Linux becomes as widely used as Windows RHAT will automatically enjoy similar growth. That is certainly possible but not nearly as certain as the poster implied. Let's look at what Redhat will have to face:1. There is a certain backlash against Redhat among most technically-minded Linux users. This is not something I can prove but that's the impression I get. Considering that these are the people who are developing Linux, this is analogous to Microsoft development stuff deciding that Linux is by far superior to Windows. It's not quite as bad because Linux developers cannot restrict access to their code to anybody due to the nature of GPL license, but this is not a very good thing for RHAT in my opinion.2. Mandrake is a distribution based on Redhat. Due to the GPL license, anybody can take the whole of Redhat and improve it or simply sell it at any price they wish. Generally, it is believed that Mandrake is a more polished and secure version of Redhat. They can't use Redhat brand but AFAIK they can say 'we are based on Redhat'. It's like heinz ketsup being sold at 1/10th of price (see next point) and that said on the label 'Heins ketsup - same ketsup as Heinz but in a different bottle'.3. cheapbytes.com and linuxmall.com sell Redhat cdroms for ~$2, minus support. These cds are exactly like the ones you get from Redhat for $50. Talk about commoditized market.4. LinuxCare specializes on support. They don't pay for any development like RHAT does. Also consider that right now majority of Linux users are very technical and most will probably look at the source code rather than calling Redhat. Will Redhat be able to keep it's pricing model on support (which is pretty inexpensive right now) when Grandpas and Grandmas start calling and asking how to com.. compile a kernal or whatchamacallit? Ouch.5. Imagine a large company with 5,000 computers buying one single Redhat cd for $50 (if not for $2 at cheapbytes) and installing it on all systems. Yes they can do it and this is one of the attractive selling points of Linux.6. Debian. The distribution, Redhat competitor that I personally use. It's not developed by a commercial company but rather by a number of enthusiasts just like the Linux kernel (base system on which all distributions are based) is developed. Generally it's considered to be a better than RHAT when used for servers while it lacks in polish and ease of installation and setup. Server market is where Linux is currently getting more share at amazing rate. Desktop, where Redhat would be more likely to beat Linux competition is still dominated by Microsoft and it's not clear if Linux will capture desktop share any time soon. I like Linux as a user and developer but I don't like it as an investor. RHAT is even less attractive. Betting on RHAT is a speculation.Also, in my opinion large companies like Intel investing in RHAT probably means that they're trying to use their stake in it as a way to get their own linux offerings more exposure and support. This does not mean that RHAT itself will make alot of money, although it is a good sign for RHAT.Please note that this post is NOT rigorously researched, I think that most of what I said is true but might be a little bit off (for example, the prices I quote).
Please note that this post is NOT rigorously researched, I think that most of what I said is true but might be a little bit off (for example, the prices I quote).Most of what you say is indeed true, but you're missing the emphasis that Redhat is putting on services and support, and not in sales of CDs. This blunts your points 3 and 5, and to some extent 2.
There is a certain backlash against Redhat among most technically-minded Linux users.I don't really think that's accurate. There is a lot of noise out there, it's hard to sort out the signal sometimes.There are a lot of young kids who are pretty vocal, who don't really contribute much to Linux except for making screenshots of their K-Rad desktops... I think that a lot of these types are the ones who badmouth Red Hat out of some unfounded fears that they are becoming the Microsoft of Linux.The fact remains that Red Hat pays some of the very best Linux developers, and they have contributed immense amounts of code to Linux, all under the GPL. There is always room for disagreement whenever design decisions are made, but I think most "technically minded" users have more warm fuzzies than they have cold pricklies for Red Hat.
I think you raise some very valid points, and I hope you don't take my response as an attack because that's really not where I'm coming from.1) You wrote: There is a certain backlash against Redhat among most technically-minded Linux users. I'm unaware of any backlash from the "most technically-minded Linux users." A few years back there was (unbelievably) much complaining about RHAT's and Caldera's efforts to make Linux easier to install, and later there was some complaining when RHAT began taking certain liberties with file placement and location (primarily involving /etc). Most, if not all, of these concerns have been alleviated by RHAT's active participation in the Standards committee. Alan Cox (to many people he is Mr. Linux) works for RHAT, and it's hard to get more technical than this guy. I've read that Linus incorporates Cox's kernel changes without even testing them anymore. Cox is just that good. At any rate, the war between the distributions as to which is best, is never going to end. Frankly, I've always thought this much more of a friendly war than one approaching the vile and bitterness associated with MSFT vs. Linux (which is normally discussed with the equivalent mentality of a junior high school debate comparing Slayer and Metallica).2) Mandrake was originally based on RHAT. It was the starting point for their development, but I do not believe Mandrake continues to rely on RHAT for any of Mandrake's current and future offerings. I address this further in my post #3137, Thoughts on the Business Model.3) Yes, cheapbytes does offer this. It's a great way to get an overall feel for the market. However, the cheapbytes CDs normally run one release behind. Again, I address this concern in my post #3137.4) You wrote: LinuxCare specializes on support.This point used to bother me greatly. However, after reflecting on my years spent on the various Linux newbie/user lists, it doesn't bother me as much. While the majority of Linux users are quite technically adept, many are not and more and more non-technically oriented people are trying Linux.It is true that a company could easily grow their own in-house Linux expert, and I expect that most probably already have or will. The same can be said for any computer-related industry. However, if you're experiencing a network problem, it's comforting to know that Alan Cox works for RHAT and that RHAT is providing your support.5) You wrote: Imagine a large company with 5,000 computers buying one single Redhat cd for $50 (if not for $2 at cheapbytes) and installing it on all systems. Yes they can do it and this is one of the attractive selling points of Linux.Absolutely. It's a great selling point.6) You wrote: Debian. The distribution, Redhat competitor that I personally use. To each his/her/its own. I'm glad you like Debian. I tried it and never could get it to properly install. But there's a very real possibility that the problem lay with me and not the distribution. RHAT has consistently, reliably and dependably worked worked for me.You wrote: Betting on RHAT is a speculation.Life is speculation. If you view investing as "betting," then any investment is highly speculative.You wrote: Also, in my opinion large companies like Intel investing in RHAT probably means that they're trying to use their stake in it as a way to get their own linux offerings more exposure and support. This does not mean that RHAT itself will make alot of money, although it is a good sign for RHAT.While any company expects to profit from any investment it makes, INTC had other, very specific reasons for investing in RHAT that were not related to any specific product. At the time INTC and DELL approached RHAT, they had no Linux position. They recognized the growth and potential of Linux and the future necessity of having a Linux position. I find it very telling that RHAT did not seek out these companies. These companies approached RHAT. And that speaks volumes as to RHAT's progress toward developing a brand name.Great post! Thanks for making me think.
You wrote: Betting on RHAT is a speculation. Life is speculation. If you view investing as "betting," then any investment is highly speculative.Well, what I really meant is that it's much more speculative than others. I think this has to do with 2 things: first of all, there are alot of loyal Linux users who bought RHAT and hold it; and that market on the whole assumes that RHAT is somewhat like Microsoft of Linux and has some milder level of control over it, therefore translating every positive news about Linux into RHAT direct benefit.Otherwise, thanks for undermining my self-confidence with well-researched critique :-)
Don't get me wrong. There are several things about translating open source into earnings that concern me. For example, corporations growing their own in-house support. If I had a corporation, this is exactly what I'd do. My technical staff would have every Linux certification imaginable.However, I have faith in man's ability to overcome obstacles, and I've seen RHAT overcome more than their share. And, I have confidence that they will continue to do so.And I didn't mean to undermine your confidence. <bg>
I'd like to add another comment to this interesting thread.There has been natural concern about the underlying business model that would allow RedHat to grow and prosper over time, and that, in particular, neither distributing open-source software nor selling support services gives one the gut-level sense that "Here is a great business concept."However, consider: In a new and rapidly-changing business area, we encounter new and unexpected business opportunities. These ultimately become the big growth engines that in turn spawn breakthough products and businesses. I believe that such opportunities WILL develop in the wake of Linux market growth. What will they be? Who knows? (And that's another topic.)So who will be in the best position to exploit these opportunities? Some newcomers will certainly be able to launch and survive; but I believe that Red Hat will be in an ideal position to expand its business model, leveraging its technical strengths, human resources, brand image, market capitalization, and existing relationships. Red Hat is a technical and business powerhouse in search of "the next big thing."So I'm more optimistic about Red Hat as a company than those who only consider Red Hat's potential in terms of its service and CD revenue streams.JMHO -- Trevor
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