Viability of Linux companies (Was Re: A Linux Today story has been mailed to you!)

[Arun Sharma <arun@xxxxxxxxxxxxxxx>]

On Mon, Apr 16, 2001 at 08:55:23PM +0530, Raju Mathur wrote:
> You're falling into the same trap again: confusing product and
> service.  Linux distributions are products, and will probably not
> sustain any distribution maker.

I won't say something as radical as - how much money has RMS made by
selling Emacs manuals ? Have you tried comparing the amount of money
product companies make and software service comapanies make in the 
market today ? 

> What will sustain Redhat, for
> example, is as you said, manuals, support, direct service,
> franchisees, etc.  In fact it's not too difficult to envisage a world
> where the RH distribution remains a loss for RH while their real
> revenues come from licensing RHCE exams.

As I said again, this idea has been around since early 80s and not one
serious company has shown any ability to sustain itself selling manuals,
exams or whatever else. However, after reading RH's quarterly reports,

http://www.edgar-online.com/bin/edgardoc/finSys_main.asp?dcn=0001021408-01-000325

I do recognize that their revenues from RHCE is increasing, but I
believe that without their flagship product, RHCE would be worthless.
Note that subscription fees continues to be the king.

> 
>     Biju> Without them, it will be a lot harder for a lot of hackers
>     Biju> to sustain their hobbies. Thats what I meant when I said
>     Biju> that $free_software is a luxury. Unless _somebody_ can make
>     Biju> large anounts of money off of it, it will always stay in a
>     Biju> niche.
> 
> Not too many hackers employed by the distribution makers, actually.

Are you kidding ?

> And continuing with AC's example, he can probably make much more money
> working out of his home than working for RH.  I doubt if kernel
> development will slow down: it didn't when Linus joind Transmeta.

(a) Linus seems to do mobile Linux most of the time at TMTA
(b) Linus' percentage contribution to Linux is shrinking.


> And
> if Alan decides to spend more time making money than working on the
> kernel, there'll be a 100 more people willing to take on that mantle.
> Finally things will find their own level anyway.

And all these people would be:

(a) Paid by the government
(b) Be in a research lab or university and do linux under the garb of research

Most of them don't have a viable economic model to sustain themselves.
They're usually exceptions, rather than the rule and being rewarded
by their employers for being exceptional. That model just doesn't scale.

Again, compare it to the *BSD world - where most people have a viable
economic model to sustain themselves.

> 
> BTW, 58% of the web server market, 70% of the mail server market, 99%
> of the DNS server market and 25% of the server OS market (FWIW) can
> hardly be described as ``niche''.

100% of the web server market is also useless and unsustainable, if it
doesn't pay you any money.

	-Arun