Red Hat Closes SF Office

from the problems-for-the-penguin dept

Red Hat is closing their San Francisco office. The article includes a bunch of quotes from freshly laid off employees about how horrible the company is run. At first I was surprised, but then they pointed out that the company also has offices in Oakland and Sunnyvale (all within about 50 miles of San Francisco), so I’m actually surprised they didn’t try to combine them all sooner. The company, of course, claims this isn’t a big deal, and I tend to agree with them. I think there may certainly be plenty of problems within Red Hat, but the closing of one small office doesn’t indicate that the company is in trouble.

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Comments on “Red Hat Closes SF Office”

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Ryan says:

The Techdirt poster

I think the more important question is where are they going to find a revenue stream? Linux is a pretty good OS but a company based on service revenue with primarily a consumer market base seems pretty F**ked to me.

However, if they want some free advice. I’d probably suggest they focus their efforts in applying linux to embedded chips (which seems like a great potential revenue stream with only a few small linux companies inhabiting that market sector). I guess they could even hire me to fix up their company for them 😉

mhh5 says:

Re: The Techdirt poster

but a company based on service revenue with primarily a consumer market base seems pretty F**ked to me.

Isn’t that what microsoft wants to do next? Isn’t that what ASPs sorta want to do if they could? I don’t think RedHat’s biz model is f*cked at all. But maybe there are too many competitors in their space….

Not that they shouldn’t get into embedded chips, but I don’t see that helping them much.

Mike (profile) says:

Re: Re: The Techdirt poster

Well, ASPs are much more focused on the business market. I think Ryan has a point that it’s pretty tough to get consumers to pay a service fee on top of free software. Companies are used to it, consumers are not.

Yes, while Microsoft is trying to do that in some way, they have a huge advantage in that they still have that built in user base and may be able to trick them into paying.

I think that Ryan has a really good point, which can be expanded on a bit. It is possible to get consumers to pay for additional services, but they have to be very clearly defined. In other words, consumers will pay for an ISP because it’s clear what they’re getting: “we connect you to the internet”. They’re much less willing to pay for undefined “services” such as “tech support” since they don’t really know what they’re getting.

mhh5 says:

Re: Re: Re: The Techdirt poster

I agree that getting consumers to pay for ASP-like services is a challenge. But I don’t think that’s what Red Hat is about.

My basic point was just that I don’t think Red Hat is as f*cked as Ryan seems to think — or at least not for the same reasons. If Red Hat fails, I think it’ll be due to too much competition in a small OS-space… not because Red Hat peddled their services in the wrong market.

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