Red Hat becomes the first open source company to amass a billion dollars

http://blog.zenoss.com/2012/03/why-billion-dollar-red-hat-and-openstack-need-to-dance/

by aritraghosh007 • 14 years ago

227 48 14 years ago

blog.zenoss.com

dhawalhs• 14 years ago

Site seems to be down. Link to Google web cache:

http://webcache.googleusercontent.com/search?q=cache:AweoOZb...

tbalinas• 14 years ago

Thanks for that link. Did not know the blog went down last night until this morning. Had not planned on an enormous traffic spike like that :)

fudged• 14 years ago

1) "Error establishing a database connection"

2) Ars had a great article about this one month ago http://arstechnica.com/business/news/2012/02/how-red-hat-kil...

bickfordb• 14 years ago

You know what's cool?

callumjones• 14 years ago

Not bringing out that quote and instead contributing something informative to the discussion, that's what would be cool.

joe_the_user• 14 years ago

That seems to make them 1/69th the size of Microsoft by revenue but 1/270 the size by profits. Notice that Red Hat's profits are about 1/10 of income but MS' profits are about 1/2 of income. Shows the incentive to get monopoly.

http://en.wikipedia.org/wiki/RedHat http://en.wikipedia.org/wiki/Microsoft

carguy1983• 14 years ago

I think what you mean is revenues. Profit and earnings and income are similar (but slightly different, depending on who you ask), but all 3 are on the other side of the fence from revenues.

reitzensteinm2• 14 years ago

Well, it shows the incentive to run a product company. Even with a monopoly on consulting you're not going to have great profit margins.

That said, it really pisses me off that you were down voted like you were. There seems to be a rash of that on HN now. You were contributing to the conversation and backing up your argument with numbers. Right or wrong, that doesn't deserve a drive by dismissal.

The voting buttons mean "More or less of this content on HN", not "I agree or disagree". If you disagree, post a reply. You might teach the OP something, or might even learn that you're wrong, as I have plenty of times on HN.

Edit: I've turned this into an Ask HN thread here, since I think it would be helpful to have a discussion about this:

http://news.ycombinator.com/item?id=3760275

avree• 14 years ago

Actually, pg has stated that the downvote arrows mean the latter.

http://news.ycombinator.com/item?id=117171

kinleyd• 14 years ago

I tend to agree that using a down vote to express disagreement eventually isn't constructive. I've seen a number of posts that didn't say anything objectionable or controversial, nor were meaningless in the context of the discussion, and yet were down modded.

My theory is that while the risk of being down modded on HN is a helpful factor in keeping discussions more courteous than on an out-and-out anonymous forum, the same cannot be said of down votes, which are in fact anonymous. As a result, users tend to be more careless or perhaps even callous in the use of down votes. I'm not sure what the solution is though: making down votes transparent might help in creating a bit more discreetness in their use, but might spill things over into flame wars into the comments themselves when exercised. Still, I think it's the total anonymity that causes its over use.

recoiledsnake• 14 years ago

Money from selling Windows goes only to Microsoft, whereas Linux is widely used without paying a penny to Red Hat. Not to mention distros like CentOS which you RedHat without needing to buy it.

davidw2• 14 years ago

And Redhat sells lots of software they don't pay a penny for either.

nextparadigms• 14 years ago

Market leaders have higher profits than the rest of the industry in general, because many factors allow them to do this. There's also sort of a rule that you can't have a higher price than the market leader because it offers higher value (gets a lot of benefits such as biggest 3rd party ecosystem, most known, most trusted, most experienced, etc), so the competitors have to price their products at a discount, and try to win customers on price, even when their product (in isolation) is "better" than that of the market leader. This leads to the market leader having the biggest profit.

pavanky• 14 years ago

Meh @ incentives.

If I could make decent money doing what I love, working with like minded people and changing the world for the better, I would take even smaller odds / profit ratios.

Add to that the open source projects they fund, the shares they gave away to the likes of Linus, you have a company with a much better conscious than Microsoft.

0xABADC0DA3• 14 years ago

It makes them 69x the size of Microsoft in contributions to humanity and 270x the size of MS in dignity. I feel that Red Hat contributes more to OSS than all the big software companies combined, even including Apple.

fruchtose• 14 years ago

I'm glad Red Hat is enjoying this kind of success. We need open source code everywhere possible, and we all benefit from businesses running on secure, open source servers. At the same time, Red Hat has remained respectable, even when other open source companies manage to alienate the open source community with otherwise great software (coughOraclecough).

ww520• 14 years ago

Glad Red Hat is doing well. CentOS is great for production servers.

giis2• 14 years ago

congrats for them,for proving you _can_ make successful business out of open source and continue contributing to oss :).

rplnt• 14 years ago

They kind of proved this from the day one. Interesting documentary on this topic is Revolution OS[1]. It is kind of biased and now very outdated but it is still worth watching. If you haven't seen it and you are interested in early history of OSS I recommend it.

1. http://www.imdb.com/title/tt0308808/

giis2• 14 years ago

cool,thanks.I'm not aware this documentary.Will watch it soon :)

wmf• 14 years ago

Red Hat proved that one company can make money using the support business model, but it doesn't look very replicable.

mrothe• 14 years ago

First thing I thought when clicking the link: "No, that's the wrong hat!"

rjurney2• 14 years ago

Open source sucks as a business. This took way too long. We like to think it works but... it kind of doesn't.

Not knocking open source. Just saying the Kumbaya business plan didn't really work out.

corford• 14 years ago

I suppose it depends how you define a successful bushiness plan. In my book, if a company can create a business that employs a few thousand people, turns a healthy profit and does all that while remaining true to the ideals of open source, it's a pretty successful business plan.

rjurney2• 14 years ago

I agree with you, I just mean... as big as Redhat is, it is a shockingly small company.

wisty• 14 years ago

Other things which suck as a business - hiring staff, renting an office, paying taxes, advertising, getting legal advice ...

The argument is, contributing to open source helps solve your problem in a more sustainable way. Maintaining your own fork of Linux isn't feasible, so you contribute patches back to the mainline. But doing this can be ... daunting, so you might be better paying some third party to handle this for you. Thus Red Hat.

Now, your competitors get a free ride on your patch, but presumably they didn't have your problem or have sunk money into an alternative solution, so it's not like they get the same benefit you did.

zanny• 14 years ago

It is not a get rich quick scheme, but Red Hat has amazing cred with the enterprise space and as a result user appreciation M$ can't even come close to touching.

I'd rather have a slow growing (yet growing) open company than a fast burn private enterprise that shrivels up because of the offensive for profit schemata.

Red Hat becomes the first open source company to amass a billion dollars

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