ROFL

Story: Why Microsoft Should buy Red HatTotal Replies: 41
Author Content
techiem2

Jul 24, 2007
10:44 AM EDT
Quoting:What's more, Red Hat could help Microsoft gain OSS street cred almost instantly.


um....yeah....
tuxchick

Jul 24, 2007
11:23 AM EDT
Just like when $famous_preacher gets caught in a crack den, it brings instant street cred to the crack den!
softwarejanitor

Jul 24, 2007
11:24 AM EDT
Red Hat would fall apart quickly if Microsoft purchased them... Not only would it be likely that most of the Red Hat employees, particularly the most important ones would leave -- for Red Hat competitors or to start up new Red Hat competitors, but also because most of Red Hat's community users/developers and customers would flee to other distributions the way we've seen people fleeing from Novell/SuSE since their deal with Microsoft... probably faster. Any "street cred" that Red Hat has would disappear as soon as it was turned into a hollow shell as everyone abandoned ship.

If Microsoft just wanted to bury a troublesome competitor then buying Red Hat might be a nice move... except that it would undoubtedly be expensive enough shareholders might not like it, and it would undoubtedly attract attention from the DOJ/EU that Microsoft probably really doesn't want.
dinotrac

Jul 24, 2007
11:59 AM EDT
>except that it would undoubtedly be expensive enough shareholders might not like it,

Don't know. The Novell Deal will end up costing Micrsoft somewhere between 300-500 million when all of the accounting is done, and they seemingly get less to show for it.

So...given that Red Hat sells to Corporate clients and not ordinary users, where, exactly, would Red Hat's customers turn?

Ubuntu?

Sure they will.

jdixon

Jul 24, 2007
12:21 PM EDT
> ...where, exactly, would Red Hat's customers turn?

Probably to the company the Red Hat folks would start up when they left Red Hat.
rijelkentaurus

Jul 24, 2007
12:44 PM EDT
Quoting:Probably to the company the Red Hat folks would start up when they left Red Hat.


rPath2?
dinotrac

Jul 24, 2007
12:49 PM EDT
>Probably to the company the Red Hat folks would start up when they left Red Hat.

Presuming they could put something credible together -- a big if.

Novell would be my guess.
lcafiero

Jul 24, 2007
12:52 PM EDT
Whew. That was good for a hearty laugh. What's even more entertaining is this guy trying to extract the editorial foot from his proverbial mouth by addressing those posting to his site, asking him how stoned he actually is.

It makes you wonder how responsible Information Week is in providing news. This case, in a word: Fail.

[Preachers in the crack house -- excellent analogy, Tuxchick]
tracyanne

Jul 24, 2007
1:30 PM EDT
Mandriva.
tuxchick

Jul 24, 2007
2:04 PM EDT
LOL tracyanne, you're getting predictable :)
softwarejanitor

Jul 24, 2007
3:08 PM EDT
It wouldn't be hard for a new startup to put something together as far as a commercial distro orriented towards Red Hat's business market... If you've got a core group of Red Hat employees defecting in a mass exodus you could usurp Red Hat's efforts much as CentOS has, build a new support structure and continue to work together with the Fedora community. Done correctly it wouldn't necessarily even have to cause a major disruption for customers or community Fedora/RH users.

That's sort of the beauty of FOSS when it comes to interests trying to kill it... cut off one head and another grows in its place.

At any rate, if Red Hat were to suddenly crater, even if ex-Red Hatters didn't start a new company/distro I have no doubts that some other distro would begin to fill the vacuum. Probably not Novell since they are unlikely to be trusted due to their complicity with Microsoft... Mandriva, maybe, although they are weak in the US, that might change, especially if a bunch of ex-Red Hatters were to join their camp or something. Perhaps one of the other small distros, perhaps a totally new distro that is unknown now.

I remember when Red Hat was the "new kid on the block"... And since I've been following things in 1993 the "king of the hill" in distros has changed more than once...
dinotrac

Jul 24, 2007
4:47 PM EDT
>It wouldn't be hard for a new startup

Sure, it wouldn't...

>If you've got a core group of Red Hat employees defecting in a mass exodus you could usurp Red Hat's efforts much as CentOS has

a) Mighty big if, b) I don't see CentOS making a bundle with all its enterprise conquests, and c) buyouts tend to have golden handcuffs for key people
jdixon

Jul 24, 2007
4:53 PM EDT
> c) buyouts tend to have golden handcuffs for key people

Only if they accept them, Dino. I'm certain Red Hat has made sure that their top people are well situated to survive any buyout.
tracyanne

Jul 24, 2007
5:12 PM EDT
Quoting:LOL tracyanne, you're getting predictable :)


Only because in the typical North American centric view of the world that most yanks have, it never gets mentioned. It's a dirty job, but someone has to remind you yanks that there is life outside of the US of A
tuxchick

Jul 24, 2007
5:46 PM EDT
Well gee tracyanne, ubuntu is based in South Africa, and all the good little US linux kids adore it. Isn't that enough? :)
dinotrac

Jul 24, 2007
6:31 PM EDT
>I'm certain Red Hat has made sure that their top people are well situated to survive any buyout.

Why on earth would they do that? Shareholders would almost certainly pitch a fit.
qcimushroom

Jul 24, 2007
7:24 PM EDT
It will NEVER happen, Microsoft wants nothing to do with GPLv3 code!!!
jdixon

Jul 24, 2007
7:24 PM EDT
> Shareholders would almost certainly pitch a fit.

Shareholders seldom complain about the top people in a company holding a large number of the companies shares. In fact, it's usually encouraged. Something about aligning their interests with those of the company is the usual line. Any buy out then ensures that those top people receive a handsome payout for their shares.
dinotrac

Jul 24, 2007
7:39 PM EDT
>Shareholders seldom complain about the top people in a company holding a large number of the companies shares.

I don't think we're talking about the same thing. Typically, a buyout will have provisions that require key people to stay in place for a given period of time, ie, it's a condition of the purchase. Works out well for those bound, because they tend to be richly rewarded for their promise to stay.

This has nothing to do with stock in pocket, etc -- though employees with a lot of stock might be inclined to go along with a deal that could raise the value of their stock substantially -- especially if they were offered golden handcuffs to hang a round a while.

At some point, you've got to figure that people will do what's in their own best interests, and lots of people have kids and mortgages.
vainrveenr

Jul 24, 2007
9:24 PM EDT
Quoting:Works out well for those bound, because they tend to be richly rewarded for their promise to stay.
umm..... well not really. Certainly far from a tendency that can be considered a "given". Can certainly remember a case where an employee of Microsoft jumped ship to Google, was infamously given real hell for doing so, and yet is doing quite well now thank you.

Anyhow, contrary to your claims of supporting FOSS and its efforts, you DO seem to be inordinately contrary to any positive developments in the FOSS world as reported on LXer now don't you! What is your relationship with Microsoft; are you by any chance an actual Microsoft employee or partner?
jdixon

Jul 25, 2007
2:48 AM EDT
> Typically, a buyout will have provisions that require key people to stay in place for a given period of time,

Which is not binding upon any individual in the company. They can always leave before the buyout is completed. With the amount of stock these folks have, they will be financially secure, so money isn't going to be an issue. Especially since any buyout would have to be at a premium to the existing stock price.

> ie, it's a condition of the purchase. Works out well for those bound, because they tend to be richly rewarded for their promise to stay.

But given that it's Microsoft were talking about making the promises, how many of the Red Hat folks will believe them? Would you?

Simply by making their top people major shareholders, Red Hat has ensured that they will be free to leave any buyout attempt if they want to do so.
jdixon

Jul 25, 2007
2:52 AM EDT
> ...are you by any chance an actual Microsoft employee or partner?

vainrveenr, get real. Dino's credentials in the FOSS world are well established. He just likes to challenge people who he feels are making unwarranted statements and he likes playing devil's advocate. He's not taking Microsoft's side. He knows that the major shareholders of Red Hat stock wouldn't sell to Microsoft.
dinotrac

Jul 25, 2007
2:57 AM EDT
>Anyhow, contrary to your claims of supporting FOSS and its efforts, you DO seem to be inordinately contrary to any positive developments in the FOSS world

Name a single instance.
pogson

Jul 25, 2007
4:57 AM EDT
Do not laugh. M$ could buy up all "commercial" Linux distros and put them out of business and have change to spare. Does anyone think that government regulators who permits widespread lock-in by a monopoly would care? The "Final Agreement" is a joke and they scarcely bother to enforce it. Break-up/banning/jail was the only remedy for these sociopaths at M$ and the guy who considered it is out of the picture. Outside the US, nothing but wrist-slapping fines are on the table. M$ can do what it wants with FLOSS competitors. The Novell, etc, agreements are just the beginning. As M$ becomes more desparate they will become more dangerous. Eternal vigilance, not humour, is in order.
dinotrac

Jul 25, 2007
5:24 AM EDT
>Do not laugh. M$ could buy up all "commercial" Linux distros and put them out of business and have change to spare.

The real question is whether it would be worth their while. Buying up Red Hat, for example would be a pile of change all by itself, and buying Novell (and no, MS doesn't own Novell) even more.

That might help them in the enterprise space, but would it help enough to pay back the costs? After all, Linux remains freely available and the largest enterprises actually have the talent and manpower to roll their own, or, alternatively, keep up with Debian or something else.

Certainly Linux progress would be slowed, but it wouldn't be stopped. Might not be a good investment for the Redmondites. Heck, they can't beat their own competition -- the biggest impediment to Vista is XP.



jdixon

Jul 25, 2007
5:37 AM EDT
> M$ could buy up all "commercial" Linux distros and put them out of business and have change to spare.

Largely true, with one caveat. They'd have to convince a majority of the current owners to sell. I'm pretty sure Bob Young still holds quite a few shares of RHT, and I don't see him selling to Microsoft. Likewise, my 15 shares are safe, for all the good that would do.

Red Hat's market cap is $4.29 Billion. Novell's is $2.56 Billion. Nobody else in the Linux space comes close to those two (figures from Google finance, data for Mandriva doesn't seem to be readily available). Microsoft has cash and short term investments of $28.236 Billion. If they wanted to, they could offer double the current price for both Red Hat and Novell and still have almost $15 billion left.

However, as Dino points out, this doesn't really make business sense. They'd be better off buying someone like Mandriva or Mepis and converting them to MSLinux, then competing with their own brand and marketing. The Microsoft name still carries a lot of weight with most people.
dinotrac

Jul 25, 2007
6:07 AM EDT
>converting them to MSLinux, then competing with their own brand and marketing.

And, as I think about it, I don't know how much sense that would make, either. Microsoft could make some money, but not the kind of change it's used to making by far - the GPL simply won't let exert the kind of leverage they can with Windows.

If I were to bet on Microsoft going into the free software space, I wouldn't bet on them doing it with free software. Instead, I'd expect to see something like Office for Linux. They maintain control of the software, and can still ride on the Linux bandwagon where it hits them most directly -- in the Enterprise.

The problem with that scenario, of course, is that Enterprise uptake so far is in the server room.
Abe

Jul 25, 2007
6:21 AM EDT
Quoting:The real question is whether it would be worth their while.
So true. MS can buy all they want but can't lock it down or monopolize it they way the like to. They can't buy the GPL and it will always be a huge boulder in their face.

All they can do is compete against their own products and the products of others in a level playing field. That is even worse than what they have now. They will buy when the situation becomes hopeless and they don't see any other business to buy that suites them better. They will buy to hamper and delay the fast progress of FOSS, nothing else.

It will never happen.

jdixon

Jul 25, 2007
6:35 AM EDT
> ...I don't know how much sense that would make, either.

Well, the cost of a distro like Mepis or Mandriva would be chicken feed to Microsoft, and if the management and developers agreed to stay on they would get the Linux experience they would need to compete, so there's no real down side. But I agree that they're probably not interested in selling Linux.

> Instead, I'd expect to see something like Office for Linux.

Which is something that would actually make sense. But without the control of the underlying OS, Microsoft can't lock out the competition and has to complete fairly. They've never liked that.

> ...Enterprise uptake so far is in the server room.

Microsoft Office for Linux would go a long way toward changing that.
NoDough

Jul 25, 2007
7:04 AM EDT
Quoting:Certainly Linux progress would be slowed, but it wouldn't be stopped.
Not so sure about that. The emotional response from the community would be huge and many of the businesses who've invested in open source would remain (i.e. IBM, HP)

All that emotion and all that investment would now be channeled into the two or three remaining top distros. It could actually accelerate progress (depending on how you define 'progress'.)
Bob_Robertson

Jul 25, 2007
7:23 AM EDT
Ah, Microsoft _could_ and still have money left over, but what would they get for their money really?

Squat, because there are distributions they cannot buy. Debian springs to mind (likely because I'm using it right now). There are already companies providing commercial support contracts for Debian systems, which to me compares to any other support contract.

Not all firms are buyable. The Sarbanes-Okley business regulations have put a huge damper on the allure of a publicly traded company, so there are less of them to buy up.

Lastly, I don't think the progress of F/OSS to add features and bloat would slow at all. There might be some particular developers displaced by such a mass buy-out, but with the code licensed under the GPL it cannot be retracted.

So what's left? Microsoft "partnering" has a strong effect of annoying people, which I believe is the point. It certainly isn't "interoperability", since F/OSS code is available such that Microsoft could make complete interoperability in no time at all if they wanted to.

Microsoft is trying to hurt the reputations of various F/OSS organizations, in an effort to hurt all F/OSS through guilt by association. That's it. It's a purely defensive measure which produces nothing at all positive.

pogson

Jul 25, 2007
7:30 AM EDT
With the abject failure of Vista, one dangerous strategy would be to "innovate", creating M$ Linux, all fair and square with codecs/guaranteed interoperability, a "windows-like" user experience and a $240 price tag. They might just convince their existing customers who want something better than Vista to go that way when/if XP is killed off. A few billion in advertising could do wonders. I expect this will happen sooner or later. Prime triggers could be 10% share for Linux and inability to produce "7". What else could they do? Fight all the way down, or embrace, extend and extinguish? M$ is capable of anything and they have a Linux department, plenty of money and plenty of manpower. Apple did something similar and thrive. Be very afraid and work hard folks, to avoid getting caught in the headlights.

Linux is infinitely configurable and the GPL would allow them to do this. Think of the PR:

1)Innovation! 2)Improved reliability! 3)Open source! (except for the stuff they add) 4)Familiar experience! 5)Familiar apps (they can licence Office, etc. for their distro only) 6)You deserve it! 7)Where do you want to go this time? 8)Want to stay locked-in? Use our protocols and file formats! 9)Developers! Use our patented Windows-API libs to ease migration! 10)50% off if you bring a friend! 11)Get "8" before we sell out! (no need to even mention it's Linux...)

The way things are going 2009 will be the year of M$ LInux unless we take over before they notice. 30% per annum growth will not sneak past them fast enough. We need to redouble our efforts.
dinotrac

Jul 25, 2007
9:19 AM EDT
>The emotional response from the community would be huge and many of the businesses who've invested in open source would remain (i.e. IBM, HP)

No question about that. But, when dealing in enterprise land, things like dealer networks, tech support operations, etc, etc, etc matter.

Losing Red Hat and Novell would throw a major but temporary monkey wrench into the works. It would sort out, but there would be a definite bump in the road.

Except for one thing that occurs to me -- In that scenario, Red Hat and/or Novell don't disappear, they change ownership. Given who their customers are, I'm not sure any real problems arise.
dinotrac

Jul 25, 2007
9:22 AM EDT
>one dangerous strategy would be to "innovate", creating M$ Linux, all fair and square with codecs/guaranteed interoperability, a "windows-like" user experience and a $240 price tag.

The last thing I would expect to see (not that I couldn't be surprised) would be a Microsoft Linux. If there were an Office for Linux, maybe, but I would expect to see a BSD based Microsoft Linux "workalike" long before I ever saw a Microsoft Linux.
Abe

Jul 25, 2007
3:47 PM EDT
Microsoft Linux might show up some day as Trial Balloon, but I doubt it is going to make a difference. It might succeed in the US, but it will not in the rest of the world.

FOSS opened the eyes of many and it is not going to be easy for MS to get its way like it did before when it had no competition at all. MS had a golden opportunity of being the only company supplying an OS for the PC with a suite of office application, that is no longer the case.

Having said that, what about the GPL? Unless MS finds a way to avoid or invalidate the GPL, every piece of FOSS MS enhances, improves, or modifies, will be available to other companies to utilize. What would MS gain if it loses its monopoly? Nothing. Can MS survive without its monopoly? I very much doubt it.

I am not worried and I say again, it is not going to happen.



dinotrac

Jul 25, 2007
4:03 PM EDT
>every piece of FOSS MS enhances, improves, or modifies, will be available to other companies to utilize.

Only the GPL'd stuff, of course. There's quite a bit under other licenses for them to play with.
Abe

Jul 26, 2007
9:05 AM EDT
Quoting:Only the GPL'd stuff, of course.
But of course Dino, unless MS chooses to play nice this time and GPL theirs too! I don't think I would have a problem with that. Would you!!! :)

Steven_Rosenber

Jul 26, 2007
9:29 AM EDT
Microsoft buy Red Hat? Given that it's the Bush administration, the Justice Department might let it go (Alberto Gonzalez has enough problems), but the Federal Trade Commission, not to mention Congress, might have a bit of a problem with it.

If they want to do it, they'd better act before a new president takes office in January 2009 -- plenty of time (... I'm destroying my own argument).
dinotrac

Jul 26, 2007
9:40 AM EDT
>but the Federal Trade Commission, not to mention Congress, might have a bit of a problem with it.

Why is that?

Red Hat sells server systems to the Enterprise. That's their business, and it's not where Microsoft has a monopoly. Buying Red Hat also would not give them a monopoly. Servers rooms presently include Windows for sure, but assorted flavors of Linux, Solaris, AIX, HP-UX, mainframes, AS/400s, assorted BSDs, and more that aren't occurring to me at the moment.
Abe

Jul 26, 2007
10:54 AM EDT
Quoting:If they want to do it, they'd better act before a new president takes office in January 2009
No matter what party is in control. All politicians have their price, nothing else counts much.

Bob_Robertson

Jul 26, 2007
11:01 AM EDT
"No matter what party is in control. All politicians have their price, nothing else counts much."

Couldn't agree more. Even if Ron Paul or Steve Kubby were to win the presidency, the two-faced party of state power would simply retrench in Congress for 4 years and make sure that they could do nothing of real substance.

It's been a _long_ time since Martin van Buren.

http://www.mises.org/mp3/Pres/Pres11a.mp3

Steven_Rosenber

Jul 26, 2007
1:17 PM EDT
Since Red Hat is so dominant in the server space, and since Microsoft is making a big play in that same arena, the notion of MS buying its main competitor wouldn't sit well with at least some in government, and the merger could very well be blocked.

It's akin to this: If Microsoft were to include free, Microsoft-branded antivirus software in the stock Windows install, many would cry foul and demand that MS not destroy the market for 3rd-party AV software. But can you imagine running Windows without antivirus protection? Even that would end up in court.

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