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

To: Pink Minion who wrote (438)	8/13/1999 12:08:00 AM
From: RobbRacer	Read Replies (1) \| Respond to 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

To: Pink Minion who wrote (438)	8/13/1999 12:35:00 AM
From: Ticklish Tiger	Respond to of 1794

I'm trying to decide whether I should short this stock and I want to share my thought process, hopefully someone can point out the faults in my thinkings. We all know that Linux will be huge but the real question is that is RHAT the 800lbs gorilla we want to side with, right now, at this price ? There are several issues we will have to think about : 1. Will Linux itself capable of displacing Windoze ? Maybe. Remember the mainframe ? That market was supposed to die with the intro. of PC and client/server architecture. Well, it is now even bigger now than the time when the PC was supposed to displace them. Similarly, the Windows industry is well-entrenched and no sane IT manager will rip out what works and put in some untested products. Over time, when the perceived benefits seems greater than the pain then... maybe. Don't forget all the legacy data residing on MS applications and servers. Who is going to convert all that and for what gains ? 2. Does Redhat have control of the OS ? No. All fixes go into a single stream, there may be a code fork for a short time but only until the next major upgrade/release. "In a Darwinian system of ruthless meritocracy, the most useful and best-written code (regardless of the contributors' prior reputations) is chosen and becomes part of future standard distributions...(There will continue to be many Linux distributions, which are collections of Linux software on a single CD. These could be different because the distributors differ in their views as to which programs, and which versions of those programs, are worth bundling. Note that the existence of multiple distributions is not an example of Linux splintering, because all distributions are based on a single, unsplintered codebase.) " -- The Linux Newbie Guide public.surfree.com So the best case is that RHAT do not control Linux. The worst case is Linux get splintered, MS wins. 3. Does RHAT provides better service than the rest of the industry ? Maybe. But this is irrelevant because service biz model does not confer an unfair, proprietary advantage that would warrant a gorrila valuation. Based on my reasoning on these issues, I'm going to short RHAT when it flattens out, perhaps as early next week. Please let me know if I've got somethings wrong. humbly yours, tt