Well, let's start off with a disclaimer. I do not work for Red Hat Linux. I do not own shares in Red Hat Linux. I am not a programmer, investor, market analyst, IT professional, or any one that has any financial ties to the computing industry.
I am a Linux user. Well, more correctly I am a UNIX user, I use Linux at home, FreeBSD on my system at work, and have used IRIX and DEC-UNIX (now know and Tru64 UNIX) on and off for the last 6 years. I know UNIX better than I know MacOS, Windows, or any other computer operating system. Not that it makes me an expert, I'm not Alan Cox or Dennis M. Ritchie by any stretch of the imagination. Actually, more than anything, I am a chemist working on my Ph.D. Now, I have learned a thing or two in my time. I am not a BOFH, although I like to think of myself as the "end user from hell" the worst combination of trying to get my own work done on a system, and playing hobby systems administrator for kicks. I tried to get an articles section going on freshmeat, I run current.nu, but it's all just at a hobby level.
I decided to spout off on this issue because of a story I read on SlashDot about "What if Red Hat bought SCO?" to which I replied "What if Pigs had Wings?" It was sort of a joke, because I didn't think much about SCO being a great value to Red Hat. When my post got moderated up to a 5 (top of the heap at SlashDot), I figured maybe I do have something to say about this. Maybe the SCO purchase makes some sense, from a pure business standpoint, but I still maintain they are not, because businesses fail, and I don't see Linux as a business. Red Hat as a company is not your traditional software company, and that is why it stands a chance to succeed where a company like Microsoft could fail. Adapting strategies like Microsoft, and buying out a company like SCO puts Red Hat into Microsoft's ballpark. Once you play like the enemy, what's the point of the battle? To succeed with a product like Linux, you have to be revolutionary, not traditional.
Here are the steps I see that Red Hat can take now that it has acquired the financial resources to make some "big plays."
Red Hat may even want to consider shipping KDE as default, because users that are happy with Gnome/Enlightenment are generally able to change their default window manager on their own. Users that have trouble changing their default window manager might like the polish and functionality of KDE better out of the box.
Ditch the $60 box set whenever we feel like releasing something new, and be up front and honest. Sell a "Subscription to Red Hat Linux" for about $100 that includes 4 complete CD sets per year, that come out on a regular schedule, and are sure to have the most up to date software from the whole GPL community. People with a lot of bandwidth don't usually buy a boxed set anyway, so give the people without bandwidth the product they really want! Offer to throw in a "emergency patches" CD in once in a while for major security issues, Red Hat sucking up the cost of an extra $5 CD per customer will probably be sure to get you thousands of people standing in line to pay $100 a year for a subscription that insures security.
Red Hat has to break the mold cast by traditional software companies. Open source software is a fast moving target, that's a given. They are selling something that is available freely on the Internet. Red Hat is not a traditional software company, and as such, should not be subject to traditional roles of "Version 5.0" etc... The model I am proposing puts Red Hat more into the lines of a traditional "publishing house" than it does a software company. Red Hat could learn great things from the ways newspapers and magazines run their businesses. Publishing is a high volume, high dollar business world, and that's the model that would more closely fit open source software. Red Hat buying out a place like CDROM.COM would make bucket loads of sense in this regard. CDROM.COM knows how to maintain a HUGE mirror of all the latest and greatest open source software, and they have "subscription" plans for FreeBSD and other OS's that have proven to work.
Sure, you could say that there isn't going to be huge changes to the Linux kernel and basic operations every 3 months to justify a whole new distribution. But, it is needed to note that it's not just the OS that is on the CD. There are many open source projects and applications that make quantum leaps frequently. People in general want the newest, most up to date set of applications, and if anything they use at all has been updated in the last three months, they want it. This is where Red Hat can sell a product. By making sure that the customers are happy, they keep their client base, and keep making money. That's the bottom line in business, keep the product shipping, the customers happy, and the money rolling in. A publishing house style company can go a long way where a traditional "Version 5.0" style OS company will fall flat.
One thing that is an annoyance about Red Hat today is that RPMs are great from a packaging standpoint, but Red Hat has muffled them up a bit. But, there are the standard RPMs that ship with Red Hat, then there are the updates on the update FTP site, and then there are the contribs. The updates are nice, the contribs are a mess. Red Hat needs to clean up it's contribs, and merge them with the updates. Red Hat needs to make it much more painless for open source developers to contribute RPMs of their latest work, and get them ordered well into the updates (maybe contribs should be rechecked, and updates the "officially checked" packages). FreeBSD ports updates are frequent, and always work, Red Hat doesn't handle their software updates nearly as well right now, and needs to do this. Kernel updates through RPMs are a good idea for "end users" who are not real UNIX hackers, but should probably be available up through the current kernel with warnings about bugs. Red Hat still only has 2.2.5 in RPM, but 2.2.12 is out at this time.
Pushing RPM might not fly really well with the open source community in general, but if Red Hat wants to make it's business fly, they really need to bend over backwards to get open source developers to contribute RPMs. RPMs are at the core of what the customers of Red Hat have to work with, and without the latest software in RPM format, Red Hat users might as well be using another distribution. Maybe you can argue that open source shouldn't be forced into packaging in this format. But Red Hat as a company needs RPMs of the latest software, either they have to work like crazy to make them available to their customers, or make it completely painless for developers to build an RPM of their software. On way or another, the software availability is a major component of Red Hat's product, so it's something they need to focus on.
Some people have proposed that Red Hat look to buy SGI sometime soon. SGI is loosing ground, and support is one of their lacking. SGI using Red Hat was their solution, and it's not working as you can tell from the $16 to $11 drop. SGI's MIPS products are solid on the hardware side, but just troll the SGI newsgroups, and you will find users are very unhappy with IRIX. It's not that UNIX in general is giving them problems, but SGI's problems with IRIX, various bugs, chaos in patches and updates, nightmear upgrade stories, etc. Buying SGI would only give Red Hat another Support headache, just when they really need to get their support more streamline, and focus it on a mass market. It would be a move in the wrong direction.
Red Hat is already working with SGI on their new systems, it's not a great fit. Mostly because people like the hardware, and the flexibility of Linux, but still have fears about SGI and Red Hat support. I think they should continue this partnership, but both parties should be ready open up really fast to people like Alan Cox. If they have the money, Red Hat should Alan right to the SGI home offices, and pay him well. Let the hardware and OS speak for itself, and let someone like Alan make it speak as clearly as B.B. King talks through Lucille. Then, let Red Hat and SGI deal with their own support issues at the corporate level.
But if Red Hat is to make any acquisitions, they should be in the software market, not the hardware market, they need to stick to what they do best. And if they bought someone out and open sources the software, that would both get Red Hat some press coverage, and make the open source community more willing to support Red Hat with it's purchasing dollars.
Companies like Intel and AMD are not something that could benefit Red Hat as directly as company that actually produces complete consumer systems. Only if Red Hat were to be directly developing a compiler would a alliance with a CPU manufacture make as much sense.
Those are some areas where the growth would be a little less painful. And a "partnership" rather than a "buy-out" would allow them to gain some "help" and not "acquire the headache."
Well, most of my thoughts on Red Hat, if they offered me some shares or something I am sure I could come up with more for them. I have some much cooler ideas for VA Linux Systems, if they would listen, but I approached them once, and they never returned my mail.