From: Mike Lorrey (mlorrey@datamann.com)
Date: Thu Jun 21 2001 - 11:25:48 MDT
The referenced link shows that Red Hat, on adjusted gross income, broke even, after taking a loss
in the fourth quarter of the previous fiscal year. Unfortunately, I had misremembered who said
what I had previous posted. It was in fact the head of SuSE, who says the following:
http://it.mycareer.com.au/breaking/20010208/A20552-2001Feb8.html
Linux doesn't work, SuSE chief admits
Thursday, February 8, 2001, 13:33
By BARRY PARK, FAIRFAX IT
Linux distributor SuSE sent a ripple through the open source community
today, not so much for laying off three-quarters of its US staff, but with the
admission from the company's chief that Linux as a business does not
work.
SuSE president Volker Wiegand told the LinuxGram online news portal
today that the remaining core of 12 staff would help turn SuSE's US
operations to profit earlier than the company's original fourth-quarter 2002
timeframe.
The report says Wiegand said that Linux as a business was not working
out, and that Linux was a “victim of hype and irrational expectations”.
“Customers have effectively been duped into believing that they would be
getting something for nothing when, in fact, they would just be paying for it
differently,” the report says.
According to Wiegand, the business community's expectations of Linux
were “greater than the deliverables and were “now below zero”.
The best Linux can offer, according to Weigand, is “better technology for
the same money”, the report said.
end quote...
Now, since this statement, SuSE has fired all of its north american staff. Admittedly, part of
this is from the Microsoft-like dominance of the Linux market commanded by rival Red Hat, part
from the very poor (IMHO) english language support included in the SuSE distro (I happen to be a
SuSE user).
Red Hat execs insist that they are becoming the defacto standard Linux distro because they are
focusing on long term services as the revinue center rather than from distribution and
installation services, which is smart, however it is a rather narrow income window: the smart
users depend on other users for free mutual support, while dumb CD tray/cup holder type customers
generally don't use linux due to their lack of technical faculties. Linux companies therefore
depend upon a narrow base of people in the middle: too cheap to hire a linux expert full time,
with enough money and not enough time to figure things out for themselves. Being in the technical
support business myself, I can tell you the best revinue sources are not this sort of person, but
the CD tray/cup holder types, and so long as that niche is quite happy with their Windows or Mac,
and so long as home administration of linux remains technically demanding, this group will not
enter the linux market.
As a result of all this, and with a significant level of belt tightening and layoffs, Red Hat has
been able to eke out a position of break even in an OS market where they are the primary
distributors of the OS with the highest growth rate and highest number of new units sold. If
Microsoft were in such a position, they would be reporting quarterly profits of 40 cents a
share.....
As to my previous comments about Stallman, I found that the statements about his motivations for
writing the GPL have been heavily documented by Brett Glass, an open source pundit, so you are
welcome to question his sources as to the veracity of those statements.
Mike Lorrey
Christian Szegedy wrote:
> Mike Lorrey wrote:
> > Whether the open source business model(s) work or not is irrelvant to this historical fact.
> > The market will decide whether they do, or not. According to the president of Red Hat at a
> > recent conference, they don't.
>
> snip much ML hate-speech, market-fetishism and desinformation
>
> Check this out:
> http://www.redhat.com/about/presscenter/2001/press_Q12002.html
>
> | Red Hat Achieves Positive Cash Flows From Operations and Shows A
> | Profit for the First Time in First Quarter
> |
> | Revenues of $25.6 million, adjusted net income of $600,000, and
> | major customer wins are highlights in first quarter of fiscal year 2002
> |
> | RESEARCH TRIANGLE PARK, North Carolina-June 19, 2001-Red Hat, Inc.
> | (Nasdaq:RHAT), the leader in developing, deploying and managing open
> | source solutions, today reported revenue of $25.6 million for the first
> | quarter ended May 31, 2001, an increase of 18% versus the $21.7 million
> | reported for the first quarter of fiscal 2001 and a decrease of 5% over the
> | fourth quarter of fiscal 2001.
>
> Anyway, I don't agree that free software is mainly a market issue, but this shows,
> how accurate your "information" is.
>
> Christian
This archive was generated by hypermail 2.1.5 : Sat Nov 02 2002 - 08:08:14 MST