BusinessWeek: Open Source growth has stagnated - Linux

This is a discussion on BusinessWeek: Open Source growth has stagnated - Linux ; This is a respectable business publication story. Oh, I know: they're paid 'bashers' in Microsoft's back pocket. Kook-koo Linux conspiracy nuts! RL Open Source: An Open Question for Red Hat and Others It's been tough lately for companies like Red ...

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  1. BusinessWeek: Open Source growth has stagnated

    This is a respectable business publication story. Oh, I know: they're
    paid 'bashers' in Microsoft's back pocket. Kook-koo Linux conspiracy
    nuts!

    RL

    Open Source: An Open Question for Red Hat and Others
    It's been tough lately for companies like Red Hat and Novell that bet
    their business on open source.

    by Aaron Ricadela
    Technology

    http://images.businessweek.com/story...0815_linux.jpg

    Software supplier Red Hat is racking up growth figures that much of
    techdom might envy. Sales rose 32%, to $157 million, in the quarter
    ended May 31, and profits climbed a respectable 7%. So why is Wall
    Street so bearish on the stock?

    A day after Red Hat (RHT) reported results, Oppenheimer & Co. (OPY)
    downgraded the shares, citing few opportunities for growth. Three
    other investment banks had lowered their Red Hat ratings in the
    previous nine months, and the company's shares, which on Aug. 15
    dipped 22¢, to 22.75, have been parked between 21 and 23 for a year.
    "There's a concern that our growth rate will slow," Red Hat Chief
    Executive Officer Jim Whitehurst says. "We've been in that funk the
    last couple of years."

    So have many other companies that, like Red Hat, specialize in
    software whose code is "open source," or freely modifiable by users
    and a vast community of developers. The arrangement can lead to
    software products that are more customizable, more readily available,
    and often cheaper than comparable products from the likes of Microsoft
    (MSFT) and Oracle (ORCL), which closely guard the underlying code to
    their most important products.

    Yet it's tech sector titans—companies including IBM (IBM), Hewlett-
    Packard (HPQ), Oracle, and Intel (INTC)—that profit most handily from
    companies' desire to run open-source products by selling lucrative
    hardware, databases, and consulting services alongside them. Meantime,
    life has been rough for many of the companies that have bet their
    business more specifically on open source.

    Worse for open-source companies, big markets don't necessarily
    translate into big opportunities, because their software can be had
    for free. Take the market for ultraportable "netbooks." Taiwanese
    vendor AsusTek Computer has done well selling the stripped-down
    devices, and Dell (DELL) is planning to enter the market in the coming
    months. Linux would seem like a natural for netbooks since it runs
    quickly on the Intel chips inside. But Whitehurst says Red Hat is
    still figuring out whether there's a business case for jumping in,
    since hardware makers likely wouldn't pay for supported versions of
    Linux inside the machines.

    "A pure service business is not particularly defensible," says
    Whitehurst. "Some open-source companies have not truly figured that
    out." If the open-source movement, now in its second decade, is to
    realize its promise for vendors and investors, more of its purveyors
    will need to get the message soon.

  2. Re: BusinessWeek: Open Source growth has stagnated

    * raylopez99 peremptorily fired off this memo:

    > "A pure service business is not particularly defensible," says
    > Whitehurst. "Some open-source companies have not truly figured that
    > out." If the open-source movement, now in its second decade, is to
    > realize its promise for vendors and investors, more of its purveyors
    > will need to get the message soon.


    Ignoring the Microsoft monopoly revenues, just how much do people make
    selling PC server and desktop software these days? Microsoft has
    strangled a lot of it out of existence, I would bet, as they continue to
    absorb software vendors.

    --
    -- I love KATRINKA because she drives a PONTIAC. We're going away
    now. I fed the cat.

  3. Re: BusinessWeek: Open Source growth has stagnated

    On Wed, 20 Aug 2008 01:57:49 -0700 (PDT), raylopez99 wrote:

    > This is a respectable business publication story. Oh, I know: they're
    > paid 'bashers' in Microsoft's back pocket. Kook-koo Linux conspiracy
    > nuts!
    >
    > RL
    >
    > Open Source: An Open Question for Red Hat and Others
    > It's been tough lately for companies like Red Hat and Novell that bet
    > their business on open source.
    >
    > by Aaron Ricadela
    > Technology
    >
    > http://images.businessweek.com/story...0815_linux.jpg
    >
    > Software supplier Red Hat is racking up growth figures that much of
    > techdom might envy. Sales rose 32%, to $157 million, in the quarter
    > ended May 31, and profits climbed a respectable 7%. So why is Wall
    > Street so bearish on the stock?
    >
    > A day after Red Hat (RHT) reported results, Oppenheimer & Co. (OPY)
    > downgraded the shares, citing few opportunities for growth. Three
    > other investment banks had lowered their Red Hat ratings in the
    > previous nine months, and the company's shares, which on Aug. 15
    > dipped 22¢F, to 22.75, have been parked between 21 and 23 for a year.
    > "There's a concern that our growth rate will slow," Red Hat Chief
    > Executive Officer Jim Whitehurst says. "We've been in that funk the
    > last couple of years."
    >
    > So have many other companies that, like Red Hat, specialize in
    > software whose code is "open source," or freely modifiable by users
    > and a vast community of developers. The arrangement can lead to
    > software products that are more customizable, more readily available,
    > and often cheaper than comparable products from the likes of Microsoft
    > (MSFT) and Oracle (ORCL), which closely guard the underlying code to
    > their most important products.
    >
    > Yet it's tech sector titans¡Xcompanies including IBM (IBM), Hewlett-
    > Packard (HPQ), Oracle, and Intel (INTC)¡Xthat profit most handily from
    > companies' desire to run open-source products by selling lucrative
    > hardware, databases, and consulting services alongside them. Meantime,
    > life has been rough for many of the companies that have bet their
    > business more specifically on open source.
    >
    > Worse for open-source companies, big markets don't necessarily
    > translate into big opportunities, because their software can be had
    > for free. Take the market for ultraportable "netbooks." Taiwanese
    > vendor AsusTek Computer has done well selling the stripped-down
    > devices, and Dell (DELL) is planning to enter the market in the coming
    > months. Linux would seem like a natural for netbooks since it runs
    > quickly on the Intel chips inside. But Whitehurst says Red Hat is
    > still figuring out whether there's a business case for jumping in,
    > since hardware makers likely wouldn't pay for supported versions of
    > Linux inside the machines.
    >
    > "A pure service business is not particularly defensible," says
    > Whitehurst. "Some open-source companies have not truly figured that
    > out." If the open-source movement, now in its second decade, is to
    > realize its promise for vendors and investors, more of its purveyors
    > will need to get the message soon.


    I will answer as a proxy for the Linux loons in COLA...

    Redhat != Linux.....

    --
    Moshe Goldfarb
    Collector of soaps from around the globe.
    Please visit The Hall of Linux Idiots:
    http://linuxidiots.blogspot.com/

  4. Re: BusinessWeek: Open Source growth has stagnated

    * Moshe Goldfarb. peremptorily fired off this memo:

    > I will answer as a proxy for the Linux in COLA...
    >
    > Redhat != Linux.....


    Indeed. RedHat's problems are /business/ problems.

    --
    The whole world is a tuxedo and you are a pair of brown shoes.
    -- George Gobel

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