Reminder that RedHat makes A LOT of money already. The results of the 2019 fiscal year show that RedHat spends twice as much money on ads and sales people than on developers.

Our subscriptions mostly pay for the salesmen and the ads. They sell ads first, IT second. So I'm not gonna cry for RedHat. The image of the poor developers working in a cave, struggling to make money is only in our mind. They had a perfectly functional model but decided to sabotage some of it to try to squeeze even more money.

Operating expense, in thousands (2019,2018):

Sales and marketing 1,378,278 1,195,286

Research and development 668,542 578,330

General and administrative 304,766 239,316

Total operating expense 2,351,586 2,012,932

Let's stop talking about Fedora/redhat, we are literally doing their job for them, for free.

Oh, btw, their gross profit is mentioned here.

Gross profit (thousands) 2,863,818 2,488,664

Net income (thousands) 433,988 261,851

That's why I had such bad support experience, because they chose to hire sales people instead of engineers. You have a better chance of being hired by redhat if you are a salesman. It's as Steve Jobs said, when the sales people take the power in the company.

"If you were a ‘product person’ at IBM or Xerox: so you make a better copier or better computer. So what? When you have a monopoly market-share, the company’s not any more successful. So the people who make the company more successful are the sales and marketing people, and they end up running the companies. And the ‘product people’ get run out of the decision-making forums."


The core of their business is made by the open source community. If they need our help for something, it's from saving them from drowning into money.

We need to jump ship from redhat just like we did from reddit. This is also the perfect opportunity to think about technical solutions on how to use the fediverse to finance the developers of the open source community.

DpwnShift,
DpwnShift avatar

The image of the poor developers working in a cave, struggling to make money is only in our mind.

GNU/Linux made this software in a cave! With a box of scraps!!!

Nougat,

You'll hear it in every company: Sales produces revenue. Everything else is a cost center. If a business could have only Sales and nothing else, they would.

quaddo,

Just a reminder of a couple of things here. And to say that I'd forgotten myself.

  1. Red Hat was acquired by IBM.

  2. IBM has had increasingly questionable business practices over the years (ref: The Decline And Fall Of IBM.

  3. The old saying "Nobody got fired for buying IBM" is an old saying that meant something at some point; whether it still does is another matter. Read the link above to get the full picture. (As someone that used to do support work for HP, a lot of the sales-centric, don't-spend-money-on-the-tech-folks mindset resonated with me.)

People (myself included) aren't happy with Red Hat's proclamation. As an individual, I can't do much other than to watch how this plays out and give my team and management the heads-up, and monitor.

Jeff Geerling weighed in on this yesterday and had a quick additional thought just a few mins ago.

Nefyedardu,

Why is nobody talking about Oracle in all this? Oracle and Red Hat create competing products: RHEL and OEL. OEL is bug-for-bug compatible with RHEL. It's not hard to see why RH isn't a fan of paying their devs good money to develop a competing product, for free. Sure it sucks that Rocky and Alma get caught up in this as well but I feel like this is 100% a shot against Oracle.

staticlifetime,
staticlifetime avatar

Yep, taken in this context, it sounds a lot different.

lucidwielder,

My question is.. has the reason RHEL and centos been as popular as it has been simply because of a 10 yr enterprise support term this entire time or something else?

I get Ubuntu Server only lasts for 5yr - unless you go spend for the extended support.. but was 5yr LTS from ubuntu server really that make it or break it for people setting up solutions for companies? I feel like the upgrade path is also pretty painless on a 4-5yr cycle as well most of the time. I get it would be even nicer to set something and forget it for a decade - but reality is the 10yr term could be anywhere along the line, not like a new release was happening every year or 2 I doubt. I mean LTS does have that sorta overlap every couple of years so I guess maybe so did centos and RHEL, but still.

Tools are often built of specific and older versions still as well and with containerization being what it is now.. I feel like Redhats big advantage of 10yr support periods is kind of diminished from what it was in the 90's or early 2000's.

ToKrCZ,
ToKrCZ avatar

TBH, never used anything from Red Hat directly, but I think they will be missed if they decide to lock themselves out of community.

SFaulken,
SFaulken avatar

They aren't. None of this affects their submissions back upstream to things like the Linux kernel, GNOME, Systemd, or any other software they include within RHEL/CentOS Stream

aeternum,

A tech company fucking their companies up?NO WAY!

j4yc33,
j4yc33 avatar

So, it's super weird to see the FOSS Crowd simping for a company that's taken what was once FLOSS (Free, as in Liberty), made it FOSS (already a problem), and is now hiding it behind pay-for-play in the repos.

Celestial,

Assuming RedHat is the same as my company, Sales and Marketing includes Sales Engineer and Client Implementation. And based on their Jobs page, that is the case. https://www.redhat.com/en/jobs/departments.

sadreality,

Good point. But it does point to the fact that company is business of "selling" and/or "making money" not active development of their product, ie they are milking their IP, not moving it forward aggressively.

It also explains anti-competitive behavior. They are having to put up walls now because gravy is is good and they are looking to protect it.

Celestial,

That's already 23% of their revenue, which is decently high for their size.

(Grabbing larger companies cause it's easy data)
Cloudflare: 18%
Google: 15%
Amazon: 11%
Microsoft: 13%
Apple: 7%
Meta: 21%

Sure they could definitely do better, but by no means are they spending "little".

High growth tech companies typically spend 26% of revenue on R&D, but these are primarily small-mid scale companies that are actively expanding.

The fact remains that RedHat is still one of the top linux kernel contributors in the past years.

sadreality,

You've listed a bunch of monopolies while Red Hat is trying to act like a monopoly...

FTC really needs to get to work on these clowns. Hopefully one day before most of us die off living this dystopian circus.

fr0g,

I'd still rather see RedHat as one of the biggest kernel/linux contributors make that extra money than fucking Oracle, Amazon etc.

Also:

They sell ads first, IT second.

They sell ads? Source?

PabloDiscobar,
PabloDiscobar avatar

I'd still rather see RedHat as one of the biggest kernel/linux contributors make that extra money than fucking Oracle, Amazon etc.

I'd rather step out of this dilemma and finance directly the people who write the code. If you look at the numbers and including the administrative staff, development is now roughly only 25% of the expense.

They sell ads? Source?

Their expense is 66% about pushing the product and 33% about making it. (not counting administrative stuff). I say let's throw our money at people who spend their time writing the code instead.

funkyb,

I think what he meant was that means they're buying ads, not selling them.

staticlifetime,
staticlifetime avatar

The problem is, although you may donate lots, historically, open source devs simply can't live off of donations. Big corporate money from Red Hat allows engineers to actually work on open source stuff for a living.

For all that people might hate them for what they do, they provide steady income for a lot of projects.

fr0g,

RedHat is probably the biggest Linux contributor across the whole ecosystem (for the kernel alone, only companies like Intel, Google or Huawei are sometimes bigger) and the average Linux Desktop user/hobbyist isn't even their target demographic, so what money to possibly not throw at them are you even talking about? Are you currently paying money for a RedHat subscription?

Also spending money on marketing/ads isn't the same as selling ads.

fr0g,

Also, I'm not really sure what I'm supposed to take away from the whole 66/33 thing. Are SUSE or Canonical handling it notably differently? If they've concluded spending lots on PR will get them lots of costumers, making a shitton of money with 1/3 going to devs still might lead to more contributions than making a little ton of money with most going to devs.

PabloDiscobar,
PabloDiscobar avatar

making a shitton of money with 1/3 going to devs still might lead to more contributions than making a little ton of money with most going to devs.

Well these contributions are now behind a paywall. The salary of the sales people devs are now safe.

Also, I'm not really sure what I'm supposed to take away from the whole 66/33 thing.

I told you, if you are fine that for each $4 only one goes to the devs then we have a fundamental disagreement. You are absolutely free to agree or disagree. All I do is to show the numbers and suggest that we spend our money elsewhere.

Maybe the real "freeloaders" of this story are not the ones that were presented to us? Can we see it through this point of view?

fr0g,

Well these contributions are now behind a paywall. The salary of the sales people devs are now safe.

They factually are not. Any fixes to RHEL go also go to CentOS Stream. and their contributions to the Kernel, GNOME, etc are freely available to anyone as well.

econpol,

It's literally the opposite: buying ads.

PabloDiscobar,
PabloDiscobar avatar

RedHat is probably the biggest Linux contributor across the whole ecosystem

They contribute more to the advertisement and sales industry than to the kernel. The point is the efficiency of the money spent on them for the open source ecosystem. If you think that on $4 given to redhat only $1 should go to the devs then we have a fundamental disagreement.

I did pay money for their subscription, I already had to deal with them. I won't do it anymore, I prefer to give my money to the people doing the hard work. But you've already said before that the "reactions are overblown" and they decision makes sense. So your opinion was already made anyway.

fr0g, (edited )

The point is the efficiency of the money spent on them for the open source ecosystem

Hence my question about SUSE and Canonical. I have exactly zero context for being able to determine that these expenses are excessive. They very well might, but "this number is bigger than the other one" without any industry context whatsoever just doesn't strike me as a meaningful argument.

That being said, if one's primary goal is to support open source development, the best way to spend one's money is obviously to donate to software projects directly. If one needs server support AND wants to spend money in a way that does most for development, the question still stands whether any direct competitors do any better.

Edit: seems like the post from Celestial kinda settles the matter anyways
https://kbin.social/m/linux/t/107420/Reminder-that-RedHat-makes-A-LOT-of-money-already-The#entry-comment-432567

staticlifetime,
staticlifetime avatar

You may prefer to give directly, but donations don't typically pay the bills of an open source developer.

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