SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Red Hat Software Inc. (Nasdq-RHAT)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Pluvia who wrote (962)9/8/1999 12:01:00 AM
From: Eric Wells  Read Replies (1) of 1794
 
The Red Hat Paradox

Red Hat makes revenue by:

1. Packaging and selling Linux.

2. Providing support for the version of Linux it sells.

It appears that Red Hat is putting greater reliance on revenue from the second category (support) than the first. Yet, every company I know of that develops software generally strives to make their software easier to use, with the hope of increasing sales. And herein lies the paradox for Red Hat: by working to improve Linux (kernal and shell), Red Hat may actually work to decrease its revenue stream from offering service and support. And there will be other companies trying to make Linux easier to use as well - and other companies that will offer Linux service and support.

Does Microsoft consider Windows NT Support as a major profit center? Hardly. Why has Wall Street been fooled into thinking that Red Hat can generate substantial profits through Linux support?

Look for major insider sell-off of RHAT in the short term.

For the record - I have no position in RHAT.

-Eric Wells
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News