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Red Hat Reports Third Quarter Results
Red Hat has announced
financial results for its fiscal year 2010 third quarter ended November
30, 2009. "Total revenue for the quarter was $194.3 million, an
increase of 18% from the year ago quarter. Subscription revenue for the
quarter was $164.4 million, up 21% year-over-year."
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Red Hat Reports Third Quarter Results Posted Dec 26, 2009 17:05 UTC (Sat) by elanthis (guest, #6227) [Link]
Out of raw curiosity, does anyone have Amy insight on what that $202 million in sales and
marketing (almost twice their r&d expenditures) are being spent on? I cant remember the last time I saw a redhat advertisement outside of a Linux magazine or website, which I can't imagine are the best places to attract new customers rather than preaching to existing customers.
Red Hat Reports Third Quarter Results Posted Dec 26, 2009 18:12 UTC (Sat) by tuna (guest, #44480) [Link]
Taking customers (potential and existing) to golf maybe?
Red Hat Reports Third Quarter Results Posted Dec 26, 2009 20:43 UTC (Sat) by bronson (subscriber, #4806) [Link]
If Red Hat is courting Fortune 500 companies and governments, it's being spent on steak and strippers.
Red Hat Reports Third Quarter Results Posted Dec 26, 2009 20:49 UTC (Sat) by mrjk (subscriber, #48482) [Link]
Corporate Enterprise Apps (which is really what Red Hat makes their money on) are sold by sales
reps and teams which visit the big customers, give demos, set up live demos on customer machines, give seminars and so on. All with associated meals and perks. I am sure they contribute to say, IBM sales pitches when needed also. That won't be all but likely a good chunk of that money. Oh and the offices those people work out of, and so on. Even if they are combined with support folks.
Red Hat Reports Third Quarter Results Posted Dec 27, 2009 22:06 UTC (Sun) by drag (subscriber, #31333) [Link]
Yeah... sales staff and such are expensive.
In layman's terms:
"The 200 million dollars is being spent to make sure there is 100 million
Red Hat Reports Third Quarter Results Posted Dec 29, 2009 2:01 UTC (Tue) by rahvin (subscriber, #16953) [Link]
Average gross salary of $50,000 (I'm sure it's more). Figure in benefits (health insurance, vacation, etc) add in office space, office supplies, computers etc and if they are really efficient it's a 2.5 multiplier. So that $50k is actually $125k annually.
Next you figure you have travel and publishing expenses along with hardware and demonstration projets. I'm sure they offer complimentary support to try to sell bigger clients etc so I bet you can probably bump the multiplier to 3.5 easily (and could be as high as 5). That's now $175k.
Without looking I'm sure someone looked at SG&A and assumed it was all sales. SG&A is Sales and General Administrative. So all your executive salaries including accounting and everything else is rolled into that (basically everyone not devoted to something billable directly to clients). The $175k above would allow for 1100 employees involved in sales and administration at an average salary of $50k (which it's not $50k) and that's without bonuses which almost all sales people get. I'm sure the executives alone (CEO, COO, CTO, etc) combined can wack 50million off the top.
That takes you down to 857 employees again without bonuses. And that doesn't even factor in all the independent accountants' and legal forces they have to hire because they are a public company (which is massive BTW, my employee owned company estimated it would cost us $3million a year just to file the SEC documents if we exceeded the 500 shareholder limit on privately held companies). Given Redhat's size their legal and accounting bill could easily top $10million for just filing the required legal paperwork to do business in the US as a public corporation. Next factor in liability, professional practice insurance, professional associations etc and you can probably tack on another $5-10 million.
Redhat is actually pretty efficient given their number of developers on salary. That they are only paying $2 for every $1 spent on development is astonishingly efficient. If this shocks you then you expose your naiveté for what business costs. Most businesses spend $3 for every $1 spent on actual billable work (as in actual salary cost). And in some businesses there are 10 people for every billable person. The legal field is one of those where every lawyer has 10 people working underneath so the lawyers salary not only cover their own expenses but those of all the underlings that aren't directly billed.
This is the reason you need upwards of $5million to properly capitalize and start a businesses in the US.
Red Hat Reports Third Quarter Results Posted Dec 28, 2009 16:49 UTC (Mon) by dennisk (guest, #12308) [Link]
The low figure for R&D might be misleading since much "R&D" comes from upstream and the community. Red Hat has stated in the past that if they owned Linux Red Hat would need five times the engineers that they have now.
Dennisk
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