On Sun, 22 Apr 2001, Nadav Har'El wrote:
> I was looking at Redhat's annual report to the SEC (April 19. See
> http://biz.yahoo.com/e/010419/rhat.html). The "Factors Affecting Future
> Results" section is amazing, and full of depressing statements (actually,
> the entire report is full of depressing statements). It might be literally
> true, but it looks like something taken directly from Microsoft propaganda
> (like the Halloween documents).
> Here are a few select paragraphs (edited slightly), for your enjoyment :)
The replies to this posting demonstrate a misunderstanding of what an SEC
report is. The purpose of the report is to be as pessimistic as possible
in order to avoid lawsuits from investors who might claim that the company
made false claims. I suggest that you read through SEC submissions by
other startups like Lineo, MontaVista, etc. The all say the same thing
"The company is in a new, unproven market area, and if you invest in us
you risk loosing all of your money". This says nothing at all about Open
Source software - it is only a warning for potential investors who are new
to this market.
- yba
>
> ----------------------------------------------------------------------------
> Our open source software business model is unproven.
>
> We have not demonstrated the success of our open source business model, which
> gives our customers the right to freely copy and distribute our software.
> No other company has built a successful open source business. Few open source
> software products have gained widespread commercial acceptance partly due to
> the lack of viable open source industry participants to offer adequate service
> and support on a long term basis. In addition, open source vendors are not
> able to provide industry standard warranties and indemnities for their
> products, since these products have been developed largely by independent
> parties over whom open source vendors exercise no control or supervision.
> If open source software should fail to gain widespread commercial acceptance,
> we would not be able to sustain our revenue growth and our business could fail.
>
> We depend on the support of Linux developers not employed by the us to release
> major product upgrades and maintain market share.
>
> We may not be able to effectively assemble and test our software because it
> consists largely of code developed by independent third parties over whom we
> exercise no control, which could result in unreliable products and damage to
> our reputation.
>
> Our products will not gain widespread commercial adoption until there are more
> third-party software applications designed to operate on Linux-based operating
> systems. These applications include word processors, databases, accounting
> packages, spreadsheets, e-mail programs, Internet browsers, presentation and
> graphics software and personal productivity applications.
>
> Our customers may find it difficult to install and implement Official Red Hat
> Linux, which could lead to customer dissatisfaction and damage our reputation.
> Installation and implementation of Official Red Hat Linux often involves a
> significant commitment of resources, financial and otherwise, by our customers.
>
>
> <<<<<< pay special attention to this >>>>>
> We may not be able to generate revenue from sales of Official Red Hat Linux if
> users can more quickly download it from the Internet.
> Anyone can download a free copy of official Red Hat Linux from the Internet.
> However, because this download can take up to 36 hours using a standard
> telephone connection, many of our users choose to buy the shrink-wrapped
> version of Official Red Hat Linux. If hardware and data transmission
> technology advances in the future to the point where increased bandwidth
> allows users to more quickly download our products from the Internet, users
> may no longer choose to purchase Official Red Hat Linux. This could lead to
> a significant loss of product revenue.
> We are focusing our sales and marketing efforts on providing subscription-based
>products and services as opposed to relying on sales of shrink-wrapped
> software.
> --------------------------------------------------------------------------
>
>
>
>
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