[ Thanks to Kelly
McNeill for this link. ]
“A few months ago, I marvelled at Red Hat, Inc.’s new, $5+
billion dollar market capitalization and wrote an article in which
I considered possible ways they could use their new success to
transform from a simple Linux distributor to a major player in the
software and service industries.”
“Now Red Hat’s market cap exceeds an unbelievable $16 billion,
and the company has finally succeeded in an acquisition (of Cygnus
Solutions), after talks with TurboLinux and LinuxCare failed for a
variety of reasons….and Cobalt Networks’ IPO has thrown several
billion more dollars into the Linux camp. With all of these
developments, I thought it would be worthwhile to take another
detailed look at the company’s position and consider where they
might go from here.”
“Red Hat’s most significant move in this time period has,
strangely, gone relatively unnoticed. Earlier this month, they made
the transition from a “Linux company” to an “Open source company”
by announcing their first support offerings for Apache on non-
Linux platforms. This change (which, in “Winning the Open Source
Support Game”, I had suggested would be strategy that another Linux
distributor could use to outflank Red Hat’s Linux dominance) can
actually justify the purchase of Cygnus, whose main strengths are
actually in development tools for embedded systems, The folks
at Cygnus must have one hell of a negotiation team to convince Red
Hat to shell out 6.7 million shares of RHAT stock (worth $674
million at the time, but now valued at over $1.5 billion). The
influx of open source support personnel is important, but we have
to ask ourselves whether the company really got a good
value.“