IT Manager's Journal: Red Hat CEO Szulik on Business, SCO, and Other Topics
Jun 01, 2004, 16:00 (2 Talkback[s])
(Other stories by Melanie Hollands)
"How would you characterize the long-term prospects for
Red Hat's business model?
"Red Hat's move to the subscription model began in 1997.
Management believed that if it could deliver innovation to the
customer as fast as it could certify and test, then it could
increasingly deliver value to the customer over the long term. This
was one of the reasons for moving to the subscription model.
"The key to making the subscription model work was (and
continues to be) the relationship between bookings and revenue
recognition. It continues to be critically important for Red Hat to
generate, on a quarter-to-quarter basis, somewhere more than 100
percent of the quarterly bookings target that show up in deferred
revenues on the balance sheet..."