Open-source companies chase steady money

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Red Hat dying?

I don't think so. The pattern in the marketplace is that low margin companies tend to kill off high margin companies. Those same low margin vendors may spend half their days in bankrupcy, but they tend to somehow survive and the losers tend to be high margin competitors that are somehow unable to find, create or hang on to a value added niche. And while low margin vendors drag along the bottom forever, when high margin vendors fail, they usually fail rapidly and abruptly.

You may question whether or not Red Hat is a low margin vendor. In terms of free software, of course they are not. But in terms of the whole software and OS market, they most decidedly are. And they are also one of the most established such vendor. Red Hat will survive for a long time. They won't do well in the marketplace, but they will survive. And in the process they will poison the market for their high margin proprietary competitors.

Posted by: George Mitchell   Posted on: 04/05/05 You are currently: a Guest | Members login | Terms of Use

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