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Technology Stocks : Red Hat Software Inc. (Nasdq-RHAT) -- Ignore unavailable to you. Want to Upgrade?

To: Matthew Wecksell who wrote (52)	6/16/1999 7:12:00 PM
From: Jerry Whlan	Read Replies (2) \| Respond to of 1794

The recent characterizations of anti-profit linux users are probably in the minority. Most people that I deal with, who have given the topic much thought, understand that the GPL is not anti-profit, it just re-arranges the way profits are made. Redhat's chairman, Bob Young, has been quoted as saying words to the effect that he does not want to make RedHat as big as Microsoft, but rather Microsoft as small as RedHat. (Incidentally, I see this same effect in the mp3.com vs the old-guard record industry conflict.) The GPL prevents the one-off super-profit maker where a company comes up with one killer product and then sits back and rakes in the bucks with little to no incremental costs per copy. Instead, someone pays a consultant (or consulting firm) one time to produce a product. Then the original client can use it all they want and so can anyone else. If you want support, you have to do that yourself, or pay a consultant to do it for you. Clearly this paradigm tips the deck away from the "shrink-wrap" software companies like MS, Adobe, Symantec, Corel, etc and towards software consultant type operations that provide development and support services. RedHat knows this, their primary source of revenue is the "consultant work" they've done in packaging a user-friendly, off-the-shelf linux installation, but they are moving towards training and corporate support services as well as development which is where the long-term sustainable revenue growth will occur. Stallman himself is an example of this "new" paradigm, he gives away his work under the GPL, but he does take very high paying consultant work to develop some of that software. Some of it he does for free, some is fully funded, but all is freely available. As long as RedHat continues to release all of their work under the GPL, there is no chance that Stallman or Torvalds will publically diss them. Nor is there a chance of linux splintering, the GPL insures that anything released under the GPL will be available to ALL users. So far there is no reason to suspect that RedHat will abandon the GPL, all of their actions to date (including the GPL in the SEC filing) shows that they "get" the concept of the GPL and intend to capitalize on it.