Red Hats off to Q3 profit

Linux vendor claws its way into the black

Red Hat has made a profit for the first time in its history for the third quarter ended 30 November 2002.

The firm reported a profit of $305,000 on turnover of $24.3m, compared with a loss of $2m in Q2 and a net loss of $15.1m the same quarter a year ago.

Red Hat currently sells 70 per cent of its products directly. But executives claimed it is planning to put 70 per cent of its business through channels, such as OEM, in the future.

"We work with IBM, Dell, NEC and Hewlett-Packard (HP) on their Linux businesses, but Red Hat has been difficult," said Peter Dawes, sales manager at Linux IT, one of Red Hat's oldest partners.

Nigel Wright, managing director of Abtech Systems, said: "Its distribution model is still not clear. We've no idea of where to go to buy its software."

But Tim Buckley, chief operating officer at Red Hat, said the firm was changing its approach. "Initially we built our channel on a retail basis, but Advanced Server will go to VARs through the likes of IBM and HP."