[6267] in RedHat Linux List
Re: Thats it...
daemon@ATHENA.MIT.EDU (Eric Smith)
Tue Nov 26 15:03:49 1996
Date: 26 Nov 1996 20:34:34 -0000
From: Eric Smith <eric@brouhaha.com>
To: "Lance Cummings" <lance@iac.co.jp>
CC: redhat-list@redhat.com
In-reply-to: <199611261415.XAA28691@mail.sphere.ad.jp> (lance@iac.co.jp)
Resent-From: redhat-list@redhat.com
Reply-To: redhat-list@redhat.com
"Lance Cummings" <lance@iac.co.jp> wrote:
> But if RH is not making a bundle by selling CDs that cost pennies a pop to
> mass produce for $50 bucks each, then their accountant must have a yacht
> stashed someplace, and be driving some pretty fancy wheels.
Lance,
Either you've never tried to run a business, or business economics work
much differently in Japan than in the US. I don't actually know any details
of Red Hat's business expenses, but I can make some educated guesses based
on other businesses I've been involved in.
An enterprise like Red Hat Software has very high labor costs. We're not
talking unskilled labor like McDonalds (though they probably do have a few
jobs like that), we're talking professionals. And quite a few of them.
Red Hat sells a fair number of packages through distributors. In that
case they probably only get about 50% of the retail price as their revenue.
The CD may cost under $1 to manufacture, but the manual and box probably
make the actual cost closer to $10. If they were selling millions of units
like Microsoft, their costs would be much lower. Also, since their volumes
are relatively low, the other overhead costs such as building leases,
utilities, etc. eat a large portion of their revenues.
At $50 retail, they most definitely will not get rich, unless Linux becomes
much more popular than it is now. We all hope that it will, but realistically
it's far from certain.
Cheers,
Eric
--
PLEASE read the Red Hat FAQ, Tips, Errata and the MAILING LIST ARCHIVES!
________________________________________________________________________
http://www.redhat.com/RedHat-FAQ http://www.redhat.com/RedHat-Errata
http://www.redhat.com/RedHat-Tips http://www.redhat.com/mailing-lists
------------------------------------------------------------------------
To unsubscribe: mail -s unsubscribe redhat-list-request@redhat.com < /dev/null
