On success and failure of Linux companies

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Here's a LONG response I wrote to one of the comments to the previously mentioned blog posting (The GNOME war) that I wanted to share here as well.


Novell has already been sold. There is an investigation holding up the original transfer date but it is very likely to go through. There will be changes in Novell. If the company taking it over didn't think they could turn it around, they would not have bought it. Turning it around might end up being breaking up all of the pieces and selling some of them, keeping some of them, and killing some of them. Who knows what will happen? We'll just have to wait.

I'm not sure why you seem to be so unhappy with Red Hat with your "while Red Hat is imposing their rules" comment. What rules are they imposing? Is Red Hat in decline? I have no idea. I can tell you that their quarterly reports have been quite positive since they went public... which is pretty rare for any technology company much less a Linux company.

I see some people complaining about their stock prices and valuation... but what tech company on the stock market isn't overvalued? To me the stock market is fundamentally broken but that is a completely different topic so I'll leave it at that.

Oh wait, let me bring up one example. Apple. A while back I read some report where a leading PC magazine had one of their guys dig deeply into Microsoft's yearly earnings reports. The gist of the article was that the author believed he had discovered that Microsoft had moved around various things in their financial reporting to hide the fact that they had lost 1% of the desktop marketshare. Ok, let's think about that for a second. Who did they lose it to? Let's just say all of the 1% went to Apple. Last I checked, and I haven't checked in a while, Apple was very high up on the stock market. They are seen as the darlings of the tech industry... making the cool products... having the best usability... advertising on US TV (I don't know about the rest of the world) with a budget of tens of millions of US dollars. Sure they sold a ton of iPhones but the Android army has come into being and has hit them hard. The iPad has done quite well (15 million sold(?) with the iPad 2 coming out today)... and no one else in the market seems to have an inroad to significant marketshare in the "tablet" arena (which I don't even believe is a legitimate genre although Miguel de Icaza definitely disagrees with me buying his third iPad today). How are they doing with the desktop OS marketshare? They are supposedly selling lots of laptops... but in one of their best years in recent history... they have managed to pull 1% of the marketshare away from Microsoft? 1%? That's all? Yet they are a darling of the stock market... and the envy of the GNOME and Canonical developers.

Of course if you listen to others, the desktop is dead and there is no reason to care about it anymore... and FOSS developers should start working on cloud apps before it is too late... and some say it is already too late.

Wow, I'm getting off on some tangents. In any event, you can see that the tech industry is a tangled web of twisty little passages... all different. :) (Who knows where geeky reference comes from?)

Also, I'm not sure where people keep coming up with this figure that Ubuntu has "60% of the Linux desktop marketshare". I have no idea if it does or not... but determining that is near to, if not completely, impossible. For the sake of argument, let's say it's true. Have they been able to turn a profit yet? If not, why not? How much of the marketshare will they have to gain BEFORE they can turn a profit? Stupid question. Having marketshare for something that is free doesn't make you successful. In fact, it can be a dead albatrose hanging around a company's neck. That is the situation Red Hat found itself in before it decided to go the enterprise Linux route.

Some say it is because Mr. Shuttleworth, who you obviously see as another legendary hero like many see Steve Jobs, has made it impossible for Canonical to make a profit because he has tried to focus the company in too many directions... meaning that no particular direction gets enough focus to be successful. Others might say that doing that is like throwing many things at the wall and seeing which ones stick. He keeps throwing things, and so far nothing has really stuck... nothing that will make the company profitable. I'm not saying that Canonical won't figure it out. I certainly hope they do... because the Linux market needs more FINANCIAL successes... not less.

If Red Hat and Novell falter (which I don't think is going to happen)... while it might shift some customers over to other companies... it will make Linux seem like a less stable technology platform to pay for and invest in. Red Hat has shown that it can be done by having positive financial statements quarter after quarter... all while releasing everything they do as FOSS... and you want them to be taken down? You do know how much they contribute to the Linux kernel, gcc, GNOME, x.org, etc... right?

I do know that if Novell fails or Red Hat falters... any people they have to shed will most likely be snapped up by other companies. Linux can survive the loss of Linus and Linux can survive the loss of one or more of its major distros... but we'd like to do more than survive.

If you ignore everything else I write, please realize that there is plenty of room for more than one or two successful Linux companies. We all do better, when we all do better. :)

Just because you see Arch and Ubuntu and not much else used in your neck of the woods doesn't mean that is how it is everywhere else. Red Hat and Novell are doing well in the "enterprise" space and CentOS is doing quite well too. Debian also.

I think your supposition that if someone uses distro X in high school and/or college they will refuse to work for a company that doesn't use distro X... is silly. Or maybe you were saying that the company they work for will be forced (somehow) to switch to distro X because that's what their new employee(s) use. Riiiiiiiiight. That might be true for major OSes... but not from one flavor of Linux to another. Distros are 95% the same software and switching between them is not so difficult.

Thanks for the discussion, Scott Dowdle