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Technology Stocks : Red Hat Software Inc. (Nasdq-RHAT)
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To: Pink Minion who wrote (438)8/13/1999 12:08:00 AM
From: RobbRacer  Read Replies (1) of 1794
 
I don't know if I can agree that Redhat has the first mover advantage.
Isn't Caldera just as big a linux vendor? Redhat may be the first to go public but is not the undisputed leader in Linux Os yet.
quote from wired article
"Next week, Linux vendor Caldera Systems
will launch a user-friendly desktop version
of the operating system, but experts say
that it's too soon to call it a Windows
killer. "
quote regarding Linux for the masses
"However, Red Hat is wary of calling Linux
consumer-ready.

"If and when we are going to announce
the big Windows killer, we're going to
make sure the technology's there to
support it," said Lisa Sullivan, Red Hat's
marketing director. "[Linux is] not the
operating system for everyone today.
There will have to be a lot more end-user
applications before we position it as an
alternative to Windows. When you set
expectations, you have to deliver on
them."

If they are just going to target larger companies to sell them support for the linux program it is going to be difficult to be profitable. Companies need to sell to the masses in order to have any real profits. Otherwise its just a nice niche business. Microsoft and Sun dominate server platforms and it will be difficult to break into their marketshare in any significant fashion.

Linux is expected to grow at 30-35% per year. Well if Redhatgrows at the same rate its sales still don't break 20MM next year. How many years will it take at that rate to have 100MM in sales? Like 5years at that growth rate. 100MM in sales is nothing. Microsoft by contrast did 19Billion in sales last year. Linux is not a threat for years to come. And Redhat is just a subset of Linux. At todays price, this company has a market cap of 5 billion. This price is way out of whack with reality. If you like the concept great. But if you think you are getting in on the ground floor opportunity at these prices you are a sucker. No offense intended.
Rob
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