Practical Technology

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Open source profits, proprietary fails

The big money software companies, like Microsoft, still rely on proprietary software for their profits. Things are changing though. While businesses like Microsoft and Sun are seeing their profits and growth decline, pure open-source play companies like Red Hat are actually gaining customers and profits in a down economy.

Take Red Hat for example. In Red Hat’s latest quarter, which ended on August 31st, the company reported higher than expected revenue and profits. “Profits minus one-time expenses and including a 4-cent per share tax benefit hit $39.4 million, or 20 cents per share, up more than 30 percent from 2008.”

It’s not just Red Hat though. Novell recently reported a much more typical quarter for a tech. company in 2009. That is to say Novell also had a poor quarter. Except, for their Linux lines, that was a different story. There, Novell saw its Linux revenue go up 22% from the same quarter last year.

Microsoft? Oh, they’re still worth billions and billions, but “Microsoft revenue declined 17% and net income declined 29% year over year in the company’s fiscal 2009 fourth quarter due to continued weakness in global sales of PCs and hardware servers.” Funny, that didn’t seem to bother the Linux companies.

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