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No. of Recommendations: 8
Everyone seems to love a stock if it made them money, but have no explanation of how the company can make money. LINUX is hard to use and has no software. It can only be successful if MSFT is forced to publish their codes for MS/EXCEL etc. 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???

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.

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?
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...explain to me LNUX's business model. This is product you can get for free, right?

No. LNUX's business model is primarily about selling hardware and support services for the same. You can't compare them against Microsoft. You could probably compare them against Dell or any of the other high-end PC/workstation hardware vendors.

Certainly you will not be able to get LNUX's products for free.
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No. of Recommendations: 3
Everyone seems to love a stock if it made them money, but have no explanation of how the company can make money. LINUX is hard to use

I find it easier to use than Windows because there are a lot of tasks that are easier to perform from a command line interface, or more importantly, from a script in a file that can be started automatically whenever needed without human intervention, such as my backups that I run when I am asleep or even out of town.

It is easier to use than a Proprietary Binary Only Operating System that crashes three times a week, requiring tedious rebooting and restarting programs over, and mistrusting their results.

Its compilers are easier to use because you can see the code you write and the code that is executing (e.g., the main loop in a program). They have profilers included, not as extra-cost options, so you can optimize your code if needed.

http://www.unix-vs-nt.org/kirch/
http://www.jimmo.com/Linux-NT_Debate/index.html
http://jgo.local.net/LinuxGuide/
http://www.linux.org/

and has no software.

http://www.xnet.com/~blatura/linapps.shtml
http://www.linuxapps.com/
http://www.applix.com/applixware/main.cfm
http://www-4.ibm.com/software/data/db2/
http://www.informix.com/informix/products/gateconn/lnxannc.html
http://www.informix.com/informix/press/1998/lnxaward.htm
http://www.oracle.com/

Lots more, too.

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

I do not see how. Microsoft are famous for the poor quality, instability, and complexity of their products. I cannot imagine the Linux community would want their code, even if it were freely available.

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???

Yep: what would Microsoft have to offer the Linux community?
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No. of Recommendations: 21
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.

Any more questions?
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No. of Recommendations: 1
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.

This is, IMHO, my favorite point of view, and what I believe will be the fundamental basis of Linux's success in the coming years.

Having said that, the big question is how to take advantage of this as an investor. As much as I believe Linux will become a significant influence on the software world, it's now become extremely difficult to find a position to take advantage of this. Invest in one of the recent Linux IPOs? Personally, the price premium that I'd have to pay for such an investment doesn't seem justifiable from a numbers point of view. There is also the risk factor: while I believe Linux will grow to be a huge success, this will certainly not be true of any company in particular, and I expect a certain discount in the price of my investment to reflect this. Of course, with the recent frenzy, I won't be able to find this discount.

So what feasible avenues of investment are left open? The other obvious one is to short Microsoft. Needless to say, historically this has been a very bad strategy, and I haven't been able to convince myself that this is something that should be done.

In a nutshell, I find it difficult to decide what to do from here. I'm holding on to what I've gotten so far in my Linux-based holdings, but I'd like to be a bit more active in my investments at this point. (As well, there's the feel-good factor in supporting the community...as a long-time Slashdot reader, I would have liked to have gotten a share of ANDN, but my bid didn't succeed, and I don't believe the current share prices are reasonable...)

If anyone has some constructive advice, please let me know. So far, after joining Fooldom, I feel I've learned a lot, and hopefully I'll learn some more with this!
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No. of Recommendations: 2
First thank you for your reply (I think?). I admit I am just Joe computer-user and I have to call an IT person to format a disk. But I think I am representive of 90% of the people out there who use computers. Go ahead hit me again, I can take it.

I find it interesting that you think the question of how a company can make money, "ultimately shallow". I guess I still come from the old school of earnings and PE ratios. Could you figure out for me what the theoretical PE ratio would be for pre-IPO earnings and the current stock price? Oh yeah, you must be using 2036 earnings projections. Or better yet, 2036 cash flow projections. Your right, I am new to this foolish way.

I admit, I have not used Linux, and ease of use are based upon reading and listening to other's comments. I believe I heard Torvald himself during a radio interview that said Linux would not be a series threat unless Microsoft was forced to publish the information necessary to allow Linux to run Word, Excel, etc. He had written a letter to the Justice Dept. asking them to require that as part of the Microsoft settlement discussions. His read, not mine.

MS products are just too dominate in the average Jo-schmo business world. Most companies feel they must be compatible with what others are using. Maybe it's a lame reason, but I think it is real. I, Joe computer-user, won't brother to go there until it's all around me. Apple is a better OS, but look where that got it. VCR BetaMax was a better system also. So what, I have to reboot once a day.

Does MS have any interest in a linux type OS? Who knows. I doubt it. But I wouldn' underestimate their ability to match a threat. I was thinking they would not replace WIN, but create a separate division/company to sell to people who will insist upon using it. If you can't sell them your product, sell the other product. You've made the sale and control all. It is the MS way.

LNUX, Linux, RHAT, hardware, software, yahda, yahda, yahda. Your right I'm not clear about what company is actually trying to provide what service or product. The discussion is will linux-based companies be able to penetrate the PC market to any degree. Not unseat MS, just make some money at it to justify their valuations. I know you've heard it all before.

I agree people will buy from RHAT for the support, etc. I'll give you that point. But if that is the case, will they buy it from a wholly-owned MS company. With all MS's faults, there is a certain security for average Jo-user to buying a MS product. (Techies must just be cringing right now).

Well thanks for the joust. Better you than the wife.

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No. of Recommendations: 0
I agree!!

Let's be unemotional about this. Personally, I would love to see Linux roll over and crush Windows. I think the competition would be great for the end-users. However, I just don't see the revenue streams for Red Hat.

Currently I don't own either RHAT, LNUX or MSFT, but I'm strongly leaning towards MSFT as my next purchase. Microsoft has 17 Billion (yes, that's a B) in current assets. I think if they decided to crush RHAT or LNUX they have the experience (i.e. Netscape) and pocket change to do it.

Just my humble opinion... God save the Linux
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Microsoft has 17 Billion (yes, that's a B) in current assets. I think if they decided to crush RHAT or LNUX they have the experience (i.e. Netscape) and pocket change to do it.

And if they try this, the DOJ will squish them in turn. I think the anti-trust lawsuit will have much more of an effect on Microsoft in paralyzing them in their business transactions today, for fear of worsening the result of the suit, more than the actual result of the trial.
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I agree people will buy from RHAT for the support, etc. I'll give you that point. But if that is the case, will they buy it from a wholly-owned MS company. With all MS's faults, there is a certain security for average Jo-user to buying a MS product. (Techies must just be cringing right now).

This is the fundamental chink in the MS armour. People "feel" secure running their software, mostly because "everyone else uses it". RHAT is making money by breaking the rules and selling long-term support and handholding instead of software. Can MS usurp, or even follow this new business model?

Actually, they're already trying. They've been hinting that the future of software is "subscription" services, pay-as-you-go applications...basically trying to establish their continual charges for "upgrades" (meaning bug-fixes) as the consumer friendly way to buy software.

Where they fail is this: They are not responsive to consumer demands. Have you ever called MS to report a bug? If you have, have they ever said anything except "Fixed in next release" (which was rarely true). The truth is, with the sheer quantity of software, ANY company would be hard-pressed to manage bug-fixes and upgrades.

Enter the Open Source Community. RHAT supports alot of development, but no where near all of the open source applications. Open source developers the world over are constantly fixing each other's code and handing it back to the original author for inclusion. I've been using Open Source software for over 5 years now, not just on Linux, but Solaris, HP, and even Windows/Windows NT. Never have I found a problem that wasn't already fixed when I went searching for the solution.

RHAT has demonstrated a singular remarkable ability: To become the "Microsoft" of Linux without alienating Linux developers. In fact, everything that RHAT develops and funds goes back into that community. By maintaining that association, RHAT has positioned itself to be the profit making middleman between FREE-provider and FREE-producer that provides real value to all parties.

I just don't see Microsoft being willing to play nice with anybody else. Unless I'm wrong, and they can, they will lose big as the software distribution model evolves.

Mark
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"Microsoft has 17 Billion (yes, that's a B) in current assets. I think if they decided to crush RHAT or LNUX they have the experience (i.e. Netscape) and pocket change to do it.

And if they try this, the DOJ will squish them in turn."

Their stock relies on the $17B in cash, and other such items. Also, it relies on their invulnerability - to use $17B would take away two things. One, their greatest assest would be gone. Two, they would admit there's something better with which they can't compete. In the end, they'd lose it all.

However, I think they're smart, and they're going to use a few million here and there to their advantage.

Rob Nelson
ronelson@vt.edu
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No. of Recommendations: 1
garbagegopher:

Bravo!! Congratulations on having the guts to respond to my pretty scathing reply. Now we can get somewhere....

I don't have time to respond fully right now (gotta get to work soon), but I do want to say this. I think that those who bother to hang around on the Fool do so because (a) they want to learn, and (b) they think they CAN learn (put another way, that this stuff ain't that hard once you stop being scared of it.) To my mind, that's best served by saying what you mean and to keep from making definitive statements unless you're prepared to back them up. (I also think the same approach and attitude applies to Linux; if you're willing to learn a little about finance to take control of your own destiny, why not do the same for a computer since the payoff is pretty significant?) If you haven't used Linux and have just heard negative reports about it, SAY THAT. DON'T say, "Linux is hard to use" because you don't have the background to support that...yet. If you overextend yourself, pesky people like me will zap you.

Let me finally point out that my interest here isn't a "love-Linux-or-rot" kind of advocacy. My interest here has to do with the thought processes and underlying logic backing up the arguments. In addition to a CS degree, I picked up a philosophy degree, and it sure wasn't for the money! I'm really trying to help folks improve their thinking (and be good at arguing because I LOVE a good argument--and correspondingly dislike a poor one), and I tend to do it regarding Linux, justice, politics, morality, religion, and all kinds of "controversial" stuff. Think of it as knives sharpening each other. The fact that you replied at all suggests that you might have the mettle it takes to stick around!

Regards,

dewyn
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"Microsoft has 17 Billion (yes, that's a B) in current assets. I think if they decided to crush RHAT or LNUX they have the experience (i.e. Netscape) and pocket change to do it.

And if they try this, the DOJ will squish them in turn."


Do you think Netscape (or Stac, or DR-DOS, etc.) thought they were safe competing against Microsoft? I don't think its Wise for a business to think their revenue stream will be protected by the DOJ.

I'm not saying this as a slight to RedHat but an observation that Microsoft is still able to wield its weight (17 Billion pounds of weight).

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I believe back in the Dark Ages of computers (early 80s) MicroSoft had XENIX - a Unix-like OS - and sold it. Part of the agreement was the statement that MSFT has no rights to sell Unix-type OSs.
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"Microsoft has 17 Billion (yes, that's a B) in current assets. I think if they decided to crush RHAT or LNUX they have the experience (i.e. Netscape) and pocket change to do it."

Just what are they going to do to crush Linux? Their standard practice is, as already been stated by others, to buy themselves into the market. They can't buy "Linux" because nobody owns Linux. They won't succeed by providing "Better Linux support" because we all know what kind of support to expect from Microsoft. The people that are making Linux a success story do so because they, among other reasons, dislike the "Microsoft Way".

We are developing software on Linux systems here where I work because we can't rely on Microsoft to fix their problems when we run into them. (That is a sad statement about the company, but we won't go into that.) Also, Linux systems are very cost effective option that can deliver quite the computing power (have you priced an SGI lately?).

Now, whether or not Linux becomes more than a niche market and actually reaches the average Joe is yet to be seen. I understand that SUN is giving away an "Office-like" suite for Linux called StarOffice. Users really don't care what is going on "under the hood", they just want to be able to share documents with other people. If, and I haven't investigated the subject, StarOffice will allow users to open/translate MSOffice documents (whether we like it or not, MSOffice is the standard format), StarOffice could be a viable option ... especially at the price they charge for it (hint - free!).

I realize that it is way too early to talk about the masses leaving Microsoft ... I guess it is up to companies like Red Hat to tell us why we can dump Windows. But I love the possibilities!

Go Linux!
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"Microsoft has 17 Billion (yes, that's a B) in current assets. I think if they decided to crush RHAT or LNUX they have the experience (i.e. Netscape) and pocket change to do it."

Just what are they going to do to crush Linux?


I didn't mean to imply that Microsoft would crush Linux the operating system. I do believe Microsoft could crush (i.e., undermine revenue streams) of companies line RedHat (RHAT) and VA Linux (LNUX) if they choose to do so. Ultimately, RHAT, LNUX and other Linux providers must treat Microsoft a hugh threat until they can expand their revenue streams (e.g. chargeable Linux support, Linux applications, whatever).

I'm not bashing RedHat! I just think as a Foolish investor you have to recognize that the gorilla Microsoft could come and steal your bananas. :)
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No. of Recommendations: 6
Hi, everyone!

<from firsich's post>
Now, whether or not Linux becomes more than a niche market and actually reaches the average Joe is yet to be seen. I understand that SUN is giving away an
"Office-like" suite for Linux called StarOffice. Users really don't care what is going on "under the hood", they just want to be able to share documents with
other people. If, and I haven't investigated the subject, StarOffice will allow users to open/translate MSOffice documents (whether we like it or not,
MSOffice is the standard format), StarOffice could be a viable option ... especially at the price they charge for it (hint - free!).
</firsich's post>

My background:
1) Graduated last year with a degree in Computer Science.
2) Now working as a UNIX Systems Administrator at a major University in the northeastern US.
3) I have been lurking around Fooldom and reading the Fool books for a couple of months now, and this is my first post.


I use both linux and Win98 (because Intuit hasn't yet ported Quicken to Linux :) ), and although I am a huge supporter of Linux (and Open Source software in general), I have to say it's not ready for the average user's desktop *yet*.

I have been using Linux for several years (specifically RedHat's distribution), and I have seen it get progressively easier to install, configure, and use. It is without a doubt more stable (crashes less often - I have had exactly 1 crash in over 2 years) than Windows. However, it still does require some knowledge of what's going on under the hood, which makes it too much trouble for the average user. I highly recommend it for IT departments at corporations, universities, and the like (anywhere where there are people who are willing and able to learn about the system and fiddle with it), but there remains work to be done to make it appear as "friendly" to deal with as the average user wants it to be.

I want to mention StarOffice specifically as a triumph for Linux. I consider it an excellent product. Sun only recently acquired StarOffice - it was formerly distributed by StarDivision. I have been using this for almost two years, and it compares extremely favorably with MSOffice. It has similar features (including the ability to read/write MSOffice format documents), but it takes up less disk space and memory, is more stable, and, as firsich points out, is free. You can, by the way, set it up to have a very similar "look and feel" to that of MSOffice, if you must. :)
Incidentally, it also runs on Win95/98/NT, as well as a few other platforms, so you can try it out on your Windows machine, if you're interested.

I give this rather long-winded explanation of the product to illustrate my thoughts that Linux is definitely moving in the right direction. It is becoming more user-friendly with each release. I see a bright future for it, as this is really the only hurdle it has. There are already thousands of software packages for Linux, as a simple Internet search will reveal, including such gems as StarOffice and WordPerfect (which you may have heard of before :) ). For the moment, though, Linux is mostly confined to the server market (where it works extremely well), and to tech geeks like me.

So, my take on RedHat is a buy and long-term hold, which would make the Fools very happy, I believe. :)
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Very well written, JeanDavid. I had to laugh at the idea of MSFT crushing Linux. Indeed, at the last Comdex, Mr Torvalds said that MSFT was as welcome to use Linux as anyone else...and "welcome" was a word he used. Although I am not a member of the Linux community(yet), my son is, and, believe me, have I been sold on the idea of open source! It's a wonderful concept of generosity that should become a virtue to treasure. We don't have to buy and sell EVERYTHING. Remember when Mr Gates wanted to copyright art? Puh-leeze!
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"I'm not saying this as a slight to RedHat but an observation that Microsoft is still able to wield its weight (17 Billion pounds of weight)."

I'm not saying this as a slight to the chinese out there, but in 1970, the U.S. thought their superior equipment could take care of "those damn chinks" out in the jungle. It's the same kind of battle that Microsoft has to fight - a guerilla war against an opponent with no strong economical/political base.

I don't mean to offend anyone, but that *was* the attitude...

Rob Nelson
ronelson@vt.edu
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This has been an interesting discussion so far, covering lots of ground, but I'd like to add my 2 cents.

First of all - my biases.

I have been a Unix user and kernel hacker for over a decade. I do own a PC with Windows on it, but use it mainly to dial in to work, for which I use an X-windows emulator. Otherwise, I use it for Netscape and occasionally, for Word or Excel. I have never used Linux, but just bought it, and plan to replace windows on my PC with it.

What I believe:

0. Linux is a quality product.
1. Linux will be a commercial success.
2. Linux will be a significant challenge to MSFT, and can potentially challenge or restrict their OS dominance.
3. With the help of Corel and Sun's StarOffice, Linux could achieve some penetration in the productivity apps market as well.
4. RHAT, though it will face competition from other Linux vendors, will probably maintain its elite status, and be profitable in the long run.

So, my next move must be to sell the farm and buy RHAT stock (if I haven't done so already), right? Actually, I have strong reservations on that front - I simply cannot justify the stock's valuation. This board's FAQ suggests that RHAT might have been overvalued at $70 - perhaps they should update their numbers? :)

As far as I can make out, RHAT does not expect to make much by selling CDs - will proably break even on their distribution costs on that. Since services are projected to be a dominant part of their revenues, shouldn't the stock be valued like a computer services firm, rather than a product firm? As with any services firm, they can grow revenues only as fast as they can grow headcount, which is inherently restrictive. Even given the open source model, they need paid employees to provide custom services to their corporate clients - I would be astonished if their revenue/employee ever came anywhere near that of MSFT.

As for VA Linux, their competition is not MSFT, but Dell. Recently Dell announced that they would be shipping PCs with Linux. All players in the Linux market do seem to agree that Linux will be a commodity, and so, service and support will be what determines winners and losers. These companies could do well, but, well enough to justify their current valuations?

atrfl
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As far as I can make out, RHAT does not expect to make much by selling CDs - will proably break even on their distribution costs on that. Since services are projected to be a dominant part of their revenues, shouldn't the stock be valued like a computer services firm, rather than a product firm? As with any services firm, they can grow revenues only as fast as they can grow headcount, which is inherently restrictive. Even given the open source model, they need paid employees to provide custom services to their corporate clients - I would be astonished if their revenue/employee ever came anywhere near that of MSFT.

I think your analysis pretty good, but it may be that they can grow their services business faster than their head count if they can automate some of the service work. Imagine a dbms full of what would be FAQ stuff, but structured so that people with easy questions could follow a tree of menus, typing in brief answers sometimes, and get the right answers in a lot of cases. Whenever the AI system could not come up with an answer, a real live expert would be brought on line (with all the stuff already learned from the customer on his (or her) screen. Anyway you get the idea.

As for VA Linux, their competition is not MSFT, but Dell. Recently Dell announced that they would be shipping PCs with Linux. All players in the Linux market do seem to agree that Linux will be a commodity, and so, service and support will be what determines winners and losers.

I agree that Dell is probably VA Linux's biggest competitor. Perhaps Penguin Computing, or Microway Inc. for the really desparate (dual 667MHz Alpha chips on a motherboard) will be serious competitors as well. However, I think Dell is at present distracted by all their Microsoft systems and not giving full attention to Linux. As a result, VA Linux Systems has a great opening and unless and until Dell is bothered enough to devote the same level of attention to its Linux products, VA Linux systems should do very well. I expect to purchase my next system from them sometime in January.

These companies could do well, but, well enough to justify their current valuations?

I doubt it enough that I have been left behind by both RHAT and LNUX. When RHAT gets down to $30, perhaps I will buy in. Likewise, when LNUX gets down to perhaps $40. I doubt it will ever happen. (I am implying split-adjusted prices, of course.)
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JeanDavid surmised:

I think your analysis pretty good, but it may be that they can grow their services business faster than their head count if they can automate some of the service work. Imagine a dbms full of what would be FAQ stuff, but structured so that people with easy questions could follow a tree of menus, typing in brief answers sometimes, and get the right answers in a lot of cases. Whenever the AI system could not come up with an answer, a real live expert would be brought on line (with all the stuff already learned from the customer on his (or her) screen. Anyway you get the idea.

I think every support "department" in the world has tried to build this masterful tree of menus with a superb AI and intelligent support people to answer the hard calls. Are you satisfied with the support you get from most of these "current" companies? I'm not.

The inherent problem with "support" in today's work climate is that you can't possibly hire, train and retain people with the skill set to do a good job with the "tough" questions. A person who master Linux (or any technology) enough to be of real use in support will have a much better job waiting for them by the time they get bored answering the same question 10 times a day.
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I think every support "department" in the world has tried to build this masterful tree of menus
with a superb AI and intelligent support people to answer the hard calls. Are you satisfied with
the support you get from most of these "current" companies? I'm not.

The inherent problem with "support" in today's work climate is that you can't possibly hire, train
and retain people with the skill set to do a good job with the "tough" questions. A person who
master Linux (or any technology) enough to be of real use in


When I worked at a large vendor of software that they wrote, one approach was that each developer had to do some customer support. This rule was not rigidly enforced, but no one needed to do support more than a couple of hours a day, and not every day in the week. It seemed like a good idea, so as not to burn-out those who peopled the telephones.

It is true that I have never been satisfied with automated help lines (or web-sites), but I do not believe I ever encountered one that I would call state-of-the-art. Most seemed to have been thrown together in a couple of weeks by an HTML trainee.

I expect one could do a lot better if a company were interested in doing the hard work up front, and continually revising it as experience dictated.

I am convinced that most of the help I got from Red Hat could have been handled by an automatic system. And Red Hat's support is far superior to Microsoft (or even Dell who have a good reputation for it).
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StarOffice:
I see big problems with StarOffice. First of all it is closed. SUN owns it. This means that if SUN does not put effort in it it will dwindle and die. It will die because it's main advantage is that it read MS files. Thats an everchanging target, which by the way if the DOJ forced MS to publish it's file structur for xls, doc and ppt files would be a major advance for the Open Source world. If StarOffice doesn't track these changes then why would you use it? But there are OpenSource suites in the making and I have seen them. They are not fully usable yet but the pace at which they improve is staggering. That is the main threat I see MS facing. It is too slow in some aspects.
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Linux, Redhat, Corel, Seigepipe, Etc.
A market plagued by pure emotion. Microsoft has just anounced their new windows 2000! What??? Pay for an OS? Just about any company that is moving down the scale, and can link their business to Linux is going to jump on the bandwagon.
Funny but the foolish four don't seem to want to have anything to do with it. Last Thursday, if you had LNUX IPOs then you made a lot of money in ten minutes. If you tried to buy when it hit the board, you probably lost close to eighty bucks a share by closing.

What I have seen lately is not a movement towards Linux because of everything it is, but more a move away from Microsoft and the kizbillion dollars they've made off of all of us. My company spent over 25 million implementing SAP. 127 people working for 1-1/2 yrs. to set up the most stubborn, ridgid, program I have ever had the pleasure of cursing. Fat chance they're ever going to go to a free OS.

Like it or not, Linux is coming. It will be the poor mans OS for a while, until it is perfected. If you are at all OS savvy, learn how this works and charge $80. an hour setting it up for others. For now, it's still in it's infancy. You will know for sure that Linux is on the go when microsoft announces an interface.

A foolish prediction would before 2002.
Fool on!
Zordon
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Funny but the foolish four don't seem to want to have anything to do with it.

Funny, but GM is looking at using Linux to run their dealership network:

http://www.computerworld.com/home/print.nsf/all/990906BF3E

Today GM is ranked fourth in RP order; who knows, maybe they'll still be in the Four when the year-end rotation comes around.
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You mean your company going to SAP? Or SAP porting to
Linux? Because SAP *IS* porting to Linux... And so
are several other ERP vendors.

They are porting to Linux because their customers are asking for it.

And so are several of the most stubborn companies on the block... Even Dialogic, who has resisted requests from actual customers for more than two years now, and that have been pretending that none of their customers wants it, are now considering supporting Linux.

The Linux companies may seem overvalued now. But many of us who buy shares in Linux companies are in it for the long run, and based on the view that Linux will overtake Windows, and that todays Linux market leaders will be tomorrows PC market leaders...

Sure, it's high risk. And it may turn out I'll lose all the money I've put in Linux related companies. On the other hand, the potential payback is enormeous.
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