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

To: JP Sullivan who wrote (781)	8/24/1999 12:03:00 PM
From: ChopChop99	Read Replies (1) \| Respond to of 1794

Winston, I think this is the most important point you're missing... The "they don't own the software" argument has another angle to it that I believe many folks are forgetting about. That is the fact that they have a premier network of R&D guys (Linux programmers) developing their products for them for free. Their money will be made from packaging, streamlining, supporting, and training. I believe this is a new business model that is gonna work and be incredibly profitable for RedHat, which is why I'm long and plan to stay that way. Chop

To: JP Sullivan who wrote (781)	8/24/1999 5:36:00 PM
From: Nelson Chang	Respond to of 1794

>>>Sell service, you say. Well, okay. I'll purchase one service contract because I've purchased ONE pack of Red Hat Linux. In the meantime I have 500 machines that run on that one pack of Red Hat I bought for $75.<<< Can someone with a copy of Red Hat Linux ellaborate on this? Would Red Hat provide support for "500 machines" just because it has a copy of its Red Hat Linux? I think people are going overboard here with this simply because Linux is open source...my goodness...

To: JP Sullivan who wrote (781)	8/24/1999 11:30:00 PM
From: Jack Whitley	Read Replies (2) \| Respond to of 1794

<<Sell service, you say. Well, okay. I'll purchase one service contract because I've purchased ONE pack of Red Hat Linux. In the meantime I have 500 machines that run on that one pack of Red Hat I bought for $75.>> Let me do a SWAG.... As a registered user of one CD, you will get a certain number of support minutes/calls/questions commensurate with your $75 fee. Once you exceed a predefined number of support calls, you will pay extra for more. In a 500 machine environment, you would quickly exceed the threshold for 1 $75 license. If you buy and register 500 copies, your support call threshold will be higher before you begin paying on a per call basis. You want consulting on how to build a mainframe from 10 desktops and a SAN, become a "Platinum" customer, etc, etc. The possibilities are endless. jww

To: JP Sullivan who wrote (781)	8/25/1999 3:36:00 AM
From: guerillero.de	Respond to of 1794

I'm sure I'm missing a huge point here. The legions of Red Hat enthusiasts can't be wrong. Please enlighten me. What's going to make Red Hat so incredibly profitable? You are not missing a point here. I think you are absolutely right. Fundamentally, Red Hat enthusiasts are wrong, because RHATs business model does not support their high valuation. On the other hand, they are right, as the stock rise indicates. IMHO, Red Hat's valuation is pure psychology- which is not a bad thing if you can predict it. I believe there are plenty of investors out there who hear "Linux", get very exited and think they have discovered the next MS. If there are enough of them, the stock will continue to rise, otherwise, it might just go down to the low whatsoever. I am not confident enough to estimate how many of the other investors - don't have a clue and buy on the hype - have a glue but think there are enough people around without a clue - have a clue and think the others will understand shortly Therefor, I am neither short nor long on this stock, because currently, the valuation is not related on any fundamentals, just psychology. BTW - I am convinced that Red Hat will prosper as a company, a thing which is also only remotely related to the stock price. All the best to long and shorts! g.