Survival of distros 101
Submitted by atang1 on Fri, 09/29/2006 - 00:53.
Open sourced community give anyone who desire to have a business in Linux operating system. You mixed and matched for your advantage over other distros to have a product for sale.
Most people have a daytime job and can do some homework for a Linux product. Then, the time will come for a website to allow downloads, or have a third party to distribute your product. A few thousand dollars can be your market share at this point.
To go further, you have to have your own distribution of disks in a retail package and sell them in computer stores. Only a few had gone so far. the market share in dollars may reach $1 million magnitude.
Going further require support( fee or seats arrangement in fees) You can then reach $300 million to $1 billion magnitude.
How do you finance this business, touches Wall street market making for your public stock.
The difficulties in market making on the net ?
Traditionally, brokerages charge 6.8% on each trade. Today, on the net, brokerages charge $7.95 for any trade. Market makers got killed, and a new class of firms such as Knight took over.
When you study shorts, you will find the traditional market maker behind it. Knight buys from the traditional market maker. Knight does not own short positions.
With market makers owning short interest to maintain a market, they have cash reserves to buy large quantity of stock. This is the reason that Wall street stayed away from 1929 type of crash. But it also is the reason that every time you buy, the stock will pull back. Every time you sell, the stock will move nicely.
Having said that, you can built up a business with plenty of cash reserve and your stock may be in the dungeon. So, public corporation CEO has to meet the market makers and present their business plans so that market makers can use the right strategy to promote the stock and prevent it from crashing.
NYSE specialist often sit on the board. They also raises money by stock offering on the street, when company faces bankruptcy.
How a market is made, is the secret of Wall street. This secret is now revealed here. The market is made in large brokerages, with large number of clients. When the price per share moves(up) the clients buy; when the shares pull back, the clients sell.
The market makers have to have two resources to succeed. Cash pool and stock pool. The stock pool is the client owned stocks deposited at the brokerage in street name. The cash pool is the large investors, such as Buffet(Warren) at Solomon Bros. Any cash pool partners of market makers get 35-45% profit guaranteed. That is why Buffet is so rich, and Solomon Bros went belly up, taken over by sandy wile(Citibank Smith Barney).
If your Linux company is public, you have to court the large brokerages if you are in NASDAQ or NYSE.
Footnote:
The sins of on the net brokerages is that small public companies such as SEMI(All American semiconductor, a distributor) with a nice business ranks 4th largest has no one to maintain a market for their stock($3). Their stockholders dwindled from 3000 to 250. The market for it is very thin, only 250 buyers, and no one is selling because SEMI is a good company. No short interest displayed when you search. Obviously, SEMI needs market makers with cash pool and they have to provide stock pool themselves.
More footnote:
If Wall street lack cash pool, then rich companies often join the market makers to be the cash and stock pools. IBM did it and maintained their stock between $75 and $150 per share. Large brokerages however, often use their own investment bankers to do merger and acquisitions which will have cash purchases that made their clients a cash pool.
Novell firestorm and patent enforcement ?
Novell is threatened its demise because of the Microsoft agreement and GPL patent licensing future?
GPLv2.0 is the debate, and Novell over reacted with Microsoft claiming their patent rights. Microsoft had given away single page license free of charge historically; all you have to do is ask?
GPL had moved on to v3.0 and allows DRM, which is profit oriented. The mixture of mutually free licensing agreement is fine and dandy, but proprietary patents always existed to protect intellectual properties. You don't have to give it away free, if you separate the distribution, even though they are used in the same computer. Dual boot is perfectly legal in every way. Adding proprietary codes after the installation of GPL distro is also legal in every way.
If no one uses your(free or not) patent license; there is no money involved. Patents are useless to protect your intellectual property, which is worthless(no money in it). In the mean time, Novell had to refine their agreement with Microsoft and promote dual boot XP installation on each and every computer.
GPL distros can sell disks, manuals and service contract per seat; all legal. But you can not force people to use Suse because Microsoft will sue every other distro? Ron has this big problem in Novell's presentation to the public.