January 19, 2002

An AOL-owned Red Hat would be good for everyone -- except Microsoft

Author: JT Smith

- by Robin "Roblimo" Miller -
This editorial is purely speculative, based on an unconfirmed report in The Washington Post that says, "AOL Time Warner Inc. is in talks to buy Red Hat Inc.," an idea I think would be wonderful for everyone who works with computers or the Internet -- except Microsoft. For them, an AOL-owned Red Hat would be a disaster.The first and most obvious benefit of AOL getting involved with Linux would be an end to sites that require Microsoft Explorer or other Windows-specific software (like Windows Media Player) to access some or all of their content. All complaints about not being able to access secure bank or other financial transaction sites with Mozilla, Netscape 6.x or Linux would cease. Suddenly every company and organization in the world that decided to ignore browsers other than MSIE (and operating systems other than Windows and/or Mac) would be forced to remedy that mistake.

I'd like that.

Think, too, about the sudden explosion of demand for Web developers who know how to make real, properly-coded, cross-platform sites instead of depending on Front Page and other Microsoft-centered tools, which would suddenly become worthless. The biggest downside to this sudden explosion of need for Linux-hip workers would be an increase in recruiter spam to Linux-oriented email lists as companies scrambled to hire Linux developers, programmers and sysadmins. I think we can live with that problem, can't we?

But we should also feel a little sorry for the people who deal with reader email at sites like MSNBC and all the rest that run stories online created with MS Word. They are going to get thousands of, "Your site is broken, there are question marks and funny symbols all over it, what is wrong with your site?" complaints from AOL users who suddenly discover that Microsoft's word processors don't use industry-standard text markup symbols.

Please try not to gloat if this happens, okay?

Now let's deal with the fear of an AOL-backed Red Hat "taking over" Linux.

This isn't going to happen. It can't happen. Mandrake, OEone, SuSE, ELX, Stampede, Slack, TurboLinux, IBM, Debian, and all the other companies and groups that publish Linux distributions and software will see nothing but good from a major AOL/Linux marketing push.

I say this because, in my own personal experience as a business owner, it is always easier to sell a "better or cheaper than..." product or service against a strong competitor than to be a missionary; to be forced to explain to every potential customer what your product or service does before you can sell it to them. This goes totally against all the "first to market wins the race" business wisdom that drove the dot-com frenzy, but you will notice that most of the first-to-market companies in that crowd are now gone or swallowed, and that the second-to-market (or third or tenth) plodders are starting to take over.

Remember the first personal computer manufacturer? They're gone! Others have taken their place. Lots of others.

I'm not saying AOL would kill Red Hat, either on purpose or accidentally. I think the combination of AOL, Red Hat and Netscape would be very powerful and successful for many years to come. We tend to forget that AOL's many divisions have some very, very smart people in them, and Red Hat has plenty of its own. I doubt that it would take long for this combined crowd to come up with an auto-installed Linux variant running in a Windows partition, with a Mozilla-based front-end GUI fully integrated with AOL's logon screen. Throw in just the word processor element of StarOffice 6 for free, and offer the total suite as a download (through AOL) for $29.95. That'd work. Think how huge an AOL-sponsored Linux software download repository could become, and how easily it could be integrated with Red Hat's Red Hat Network,with a basic consumer-oriented version free with every AOL subscription.

With a suddenly huge market for commercial Linux software and a much-multiplied user and developer base for Free and Open Source Linux software, Microsoft CEO Steve Ballmer had better have a cardiologist standing by 24/7, because suddenly Microsoft would be faced with a level of competition the company has never seen before: a two-pronged approach with a powerful corporate empire on one point and hundreds of thousands of software idealists on the other. Microsoft might not curl up and die, but suddenly it would be forced to sell its software products on technical merit instead of marketing, which would force more and more major structural (and business strategy) changes at Microsoft than any proposed government actions.

Now let's talk about the small-time Linux people -- and next to AOL/Red Hat, everyone except IBM would be small-time.

AOL Time Warner has plenty of successful competition in both the ISP and the news/information delivery businesses. Their movies are not notably better or more successful than those from other studios. Their music labels have never succeeded in dominating their markets. CNN is not the world's most popular source of TV news.

In other words, AOL Time Warner's corporate hallmark is something we might call "good enough-ness." Their magazines tend to be good, but not great. AOL does many things well (especially mass marketing), but many ISPs offer better and/or less-expensive services, to the point where AOL evangelizes "the Internet" like mad and brings a constant stream of new people to it, then those people gradually learn that they can get better Internet access elsewhere and move on.

I would expect to see the same pattern with AOL-sponsored Red Hat Linux: a decent, mass-market product, promoted constantly on TV and on AOL users' logon screens. A good-enough product, in other words, with AOL-like 24/7 support, to eat heavily into Windows' desktop market share.

How hard is it, really, to compete with "good enough" products and services?

Red Hat is not the only Linux company that has smart people working for it, and Debian's volunteer crew has many brilliant members. A rising ice floe lifts all Penguins on it, every time.

While many Linux purists don't want to admit the importance of desktop use to continued Linux enterprise market penetration, Microsoft's marketing people have successfully proved that desktop market share is a major key to marketing server-level software products to the non-technical executives who hold the purse strings in most companies, large or small. Given a choice between something that looks like what they have on their office and home desktops -- something "familiar" -- and something that looks utterly alien, most people will opt for the familiar every time.

The more Linux out there, the merrier, no matter whose brand name is on it. If AOL Time Warner Red Hat manages to grab 20% of the world's total desktop operating system market, how could that be worse than Microsoft holding (depending on whose figures you use) between 84% and 92%?

This is all speculation
I'm writing this on Saturday, January 19, 2002, at 1:35 p.m. US EST, and none of my calls to Red Hat or their PR agency have yet been returned. The only news stories I have seen so far about AOL possibly buying Red Hat are the one in The Washington Post and others based on it, and the Post story is totally unattributed. About halfway through it you'll see the sentence, "Officials of AOL, Red Hat and Microsoft declined to comment," which can mean anything. Or, just as likely, means nothing.

If we get any more concrete information, we'll be sure to let you know. But until we do, please regard all "AOL might buy Red Hat" talk as nothing but a pleasant mind game to play during TV commercials, as substantial as a TV weather report that calls for snow while you look out your window and see a clear, sunny sky.


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