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Technology Stocks : Red Hat Software Inc. (Nasdq-RHAT)

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To: BenYeung who wrote (30)	6/12/1999 9:03:00 AM
From: Matthew Wecksell	Read Replies (1) of 1794

As installation and driver suppoort gets better in the future, what will make people want to buy the full retail when you can get alternatives for much less? Simple. The Microsoft Business Model states that Red Hat will first make their money selling "support" contracts to companies using Linux in an enterprise environment. Since the people using such machines will not tolerate downtime, they will be paying Red Hat to jump in front of the bullets that come when their CIO's start screaming "The Server Is Down! Who Is Responsible For This!" As Linux is more stable than NT in such an environment, Red Hat will be jumping in front of a lot less bullets than the NT service folks. Then, when it starts to be preinstalled on PC's from Dell, Red Hat just sits back and collects liscensing fees. It's sort of like how MS made money selling Windows 3 when everyone was copying it - they cleaned up with the OEM's and the corporate site liscensing. Of course, this presupposes that Red Hat takes the IPO cash and uses it to keep talented programmers working full time on making their product better, so that the demand for the product continues. ---matt

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