Open Sources

Chapter 9. Giving It Away: How Red Hat Software Stumbled Across a New Economic Model and Helped Improve an Industry

Robert Young

As a founder of one of the leading commercial companies offering open-source software, anything I say is tainted for the purpose of objective academic research or analysis. The skeptical reader will not view this is a definitive paper on this topic, but simply a collection of interesting, enlightening, or just plain curious stories of the moments and events that have influenced the progress of Red Hat Software, Inc.

Where Did Red Hat Come From?

In the early days of the Linux OS (1993), we were a small software distribution company. We offered Unix applications, books, and low-cost CD-ROMs from vendors like Walnut Creek and Infomagic. In addition to conventional Unix offerings, these vendors were beginning to offer a new line: Linux CD-ROMs. The Linux CDs were becoming bestsellers for us. When we’d ask where this Linux stuff was coming from, we’d get answers like, “It’s from the programmers according to their skill to the users according to their needs.”

If the collapse of the Berlin Wall had taught us anything, it was that socialism alone was not a sustainable economic model. Hopeful slogans aside, human activities did not replicate themselves without a good economic model driving the effort. Linux seemed to lack such a model. We reasoned, therefore, that the whole Linux thing was a big fluke. A fluke that was generating enough cash to keep our little ...