techieMoe

I think you misunderstand what companies like Novell and Redhat do.

Yes, Redhat makes money. They do it by not selling Linux. Redhat sells a service built around Linux. They essentially give the OS away (since of course you could obtain it for free elsewhere anyway) and sell service contracts to large companies to help maintain their servers and software on those servers.

Novell does the same with their SLED product. Don't let the fact that they also sell openSuSE in retail stores fool you. They're not selling Linux, they're selling support. The only difference between a retail copy of openSuSE and the one you download (aside from printed manuals) is that Novell offers 90 days of phone support and (last I checked) around 6 months of email support for it. Their corporate customers get different agreements of course, and they cost a lot more.

So yes, you can make a viable business model using Linux, as long as you don't do it by trying to sell Linux. Even Linspire doesn't sell their distribution; they sell a service (Click N Run) that allows people to more easily install software on it.

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deanlinkous

Redhat is a publicly traded company and most of its financial information is public. AFAIK it has pretty much always been profitable. I know I have always been profitable by trading their stock and wished I had some money to buy some now.

I have seen the stock price go from near $150 to as low as around $3 just a couple years later and right now it is at $17. Trust me they know how to keep on keepin' on.

RH is basically a solution provider, not just a linux iso maker. That is where the money is at, not just providing a iso but a company coming and saying we need to be able to do this and it has to interface with this and so forth and RH taking care of the solution. And of course the service contract to go along with the solution!

ImNeat

Great point.

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eraker

Well, I'm new and unschooled in thinking about this aspect of Linux, so what you guys are saying makes sense. Even so, it would still seem to me that there's a potential for problems in that it would be difficult to build distinctions between different vendors. For instance, it seems like anyone could take Red Hat's product and repackage it and then give it away themselves with support. Or it also seems like it would be possible to not even package it, but to offer service and support on Red Hat products without offering the distro yourself. Thus, it seems like it's very easy and almost invited for competitors to jump into the market and offer exactly the same services, which would make for a difficult long-term business model.

To be fair, this is true of almost any commodity. Nike sells shoes, for instance, and anyone could sell shoes. The difference between anyone selling shoes and Nike is, of course, brand recognition. In Nike's case this is incredibly powerful and profitable.

Overall, and I don't mean this is as a criticism, I like Linux and I'd like to see it succeed and I think that realistically it probably needs the help of corporations to succeed. Also, I'm sure these are points that have probably been offered before. I am somewhat inept when it comes to imagining how businesses can succeed and fail but in this instance, looking at the options, I don't think I would want to start a business based around offering support on a distribution (not that I would ever think of starting a business), because it seem so easy for other companies to start that simply use the same product and the same business model. As I said, I'd like to see Linux succeed; I'm just curious how companies are able to make it work.

ImNeat

What I didn't think of before is that Red Hat is more service-oriented, not product-oriented. So someone "stealing" its physical product doesn't really affect it - because its available service is untouched.

It's like a consulting service. Someone can open another consulting service right next door to you - but if you're the best at what you do then no worries.

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deanlinkous

Offering the same thing and nobody having a unfair advantage is called - true competition! Be better at it than your competitors and you gain brand recognition it doesn't just magically happen.

Redhat has been around a fairly long time, if it was going to fail I think it would of done it earlier not now when linux is finally gaining ground.

cousinlucky

My " old gut " tells me that this deal between Microsoft and Novell is going to be looked at by the various new committee chairmen in the U.S. Congress who are itching to show U. S. corporations that the " just look the other way " days of government are indeed over.

Trio3b

Wow, just read the FAQ on the Novell site describing its collaboration with MS as a win-win deal. The only thing lacking were the beautiful "Price is Right " models caressing and fondling the merchandise. Anyways, this win-win deal is the first lie.. uh, er, sorry... the ah...mission statement! Yeah... that's it. "The Mission Statement". Beautiful spin!

I have to agree with whoever said that this statement is likely to to be reworded. The wording will be "cleaned up" in direct proportion to the amount and severity of the backlash they recieve.

I have drafted a few legal documents and contracts in my day and this FAQ is LOADED with LAWYERSPEAK. If I'm not mistaken, certain entities are capitalist entities and there is no way that some of the stated objectives can be reconciled in a mutually inclusive manner that is beneficial to these parties, AND the end users in the long term........ not to mention opensource projects who don't jump on board. This means that any commercial developers outside the specific confines of this deal are subject to patent litigation. Oh, sorry... that IS specifically stated in the FAQ.

When describing the role of certain people in this deal, the wording is happy, shiney and legally ambiguous so that they cannot be held accountable if they change their minds. However, in describing the parameters allowed to the opensource community, the wording is very clear and legally non-ambiguous. There's your second giant oversize brilliant crimson, flapping in the wind, red flag.

Novell is about to become either a skid mark or an impotent eunich.... Ouch!

cousinlucky

Huh?? Could someone translate this article for me, please?

http://www.alternet.org/story/44301

smolloy

The deal between Novell and Microsoft is bad because it will blur the line between open-source and proprietary, making it difficult to enforce the GPL.

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