How Red Hat killed its main product and became a multi-billion dollar corporation
Fifteen years ago, Red Hat faced a fateful choice: stop or continue to release the Red Hat Linux operating system, which gave the name of the entire company. The company realized that open source in itself cannot create a business model that can compete with corporations like Oracle and Microsoft. Required decisive action.
According to the current head of Red Hat for products and technologies, Paul Cormier (Paul Cormier), who took over as vice president of development in 2001, to turn from a small software company into a serious player in the corporate software market, Red Hat should replace Red Hat Linux is an enterprise-class software product that will keep code open, but will cease to be free.
Cormier was called crazy in Red Hat. "The developers were not worried about any business models then," says Cormier. “They just wanted to do Red Hat Linux.” So after the transition to a new business model, we had a certain turmoil, some of the developers left, but most of them remained. ”
')
Cormier’s proposal put the company on the line, but he defeated the skeptics , managing to convince then-CEO Matthew Szulik to stop Red Hat Linux production. The latest stable version of this operating system came out in 2003, at the same time the first version of the Red Hat Enterprise Linux distribution kit (RHEL) was released to the market. Since then, the company has shown steady growth in revenue and profits, fueled by the growing popularity of Linux-based servers and the successful expansion of Red Hat to new markets.
Looking back, it is obvious that Cormier’s perilous plan turned out to be prophetic, although it seemed to many people to be complete nonsense. How did Red Hat manage to risk, win, and build on success?
Red Hat was founded in 1993 by Bob Young (Bob Young) and Marc Ewing (Marc Ewing), and owes its name to the hat Ewing wore while studying at Carnegie Mellon University. But Ewing had already left Red Hat, and Young had left the company management by the time Cormier came to it. His arrival coincided with the release of the new version of Red Hat Linux, and he well remembers his conversations of that time, including the conversation with the head of the developers.
The people in the office, meanwhile, rode scooters and firing at each other from toy blasters, it was cool.
The main money Red Hat then earned on technical support by phone, and Cormier understood that such a business model does not scale.
“We really had no business model,” he says. - Boxes with Red Hat Linux were sold in bookstores for $ 29.95, and yet it could be downloaded for free from the Internet. At that time, we had, perhaps, a dozen customers who paid us money, mostly for talking on the phone. And we knew that all this does not scale: people simply did not understand what to pay for. ”
Cormier recalls many late-night meetings where he urged the company's top managers to replace Red Hat Linux with Red Hat Enterprise Linux, which from the very beginning would be offered only on a paid subscription basis, including for receiving any updates, patches and patches. According to him, the process was tight, because in search of a strategy that could bring the company billions of dollars, management did not want to abandon the terms of licensing open source software.
Cormier won, but Red Hat still retained the practice of free software distribution. While RHEL brings money to the company, the spirit of that first Red Hat Linux lives in the Fedora operating system, which was first introduced in 2003 and was based on the Red Hat Linux code, and is now developing as part of an open source project sponsored by Red Hat. Today, Fedora serves as a kind of testing ground for new features and technologies, which are then offered to corporate customers as part of the commercial product RHEL.
The RHEL source code is also available under the GPL (GNU General Public License) licensing terms and can be freely compiled by anyone. But Red Hat provides finished products based on this code only for money. Yes, there is such a thing as CentOS - a free RHEL clone compiled from Red Hat source code by CentOS developers. But this does not prevent Red Hat from charging for a subscription to RHEL, since it is believed that only a subscription to RHEL guarantees the functionality of the applications written for it after updating the operating system.
“The Red Hat Enterprise Linux binaries, the same binary that runs on a computer, are not free,” says Red Hat CEO, Jim Whitehurst. - The source code is free and available to anyone. But we compile the binaries, and we are the ones who make them a corporate-class product. ”
For large customers, it is equally important that once every two years Red Hat releases versions of RHEL with so-called long-term support. Such versions have been supported for ten years, moreover, to the extent that Red Hat has been tracking Linux critical fixes and porting them to older versions of its operating system.
"Put yourself in the place of the New York Stock Exchange, and you will realize that frequent changes in the operating system versions on which you have everything built are what you least want," Whitehurst says.
If Red Hat continued to distribute software for free and sell technical support, "it would have remained a tiny company on the verge of profitability," Whitehurst adds.
Red Hat Linux was very similar to today's Fedora, with its high speed of releasing new versions in order to offer the latest technology to users. But new versions and fixes often disrupted the performance of old applications and left no chance for the formation of an ecosystem of third-party software and hardware solutions. With the transition to RHEL, Red Hat was able to offer corporate customers exactly what they needed: a stable life cycle and clear release plans, as well as a streamlined installation scheme for software fixes without the risk of disrupting system and application performance. And this model has certainly proved its viability.
With the growth of cash receipts, Red Hat became the object of an attack by patent trolls and especially zealous advocates of open source software. Despite an unusual position for software companies - Red Hat openly opposes the very concept of software patents - the company has developed a pragmatic strategy for acquiring security patents. Red Hat goes to court when it comes to fundamental principles, and resolves not so important extra-judicial disputes, if it is cheaper.
“If you accept the concept of modular innovation, when many different people contribute to progress, building on the achievements of predecessors, then it becomes obvious to you that patents only slow things down,” Whitehurst says. “I do not think that we are so different from any other software company, we just have to deal with a huge mass of patent trolls.”
Red Hat lawyers always have a case in court, especially in a court in the Eastern District of Texas (known as the “Pit Claims Facility”). The company even somehow merged with its long-time rival, Novell, to win the case against the daughter of the famous patent troll Acacia in 2010. Moreover, the newly-minted partners once prepared a joint expert opinion on behalf of Microsoft, which was needed when considering a patent lawsuit.
However, Red Hat does not shy away from solving problems with money. In particular, in April 2011, the company went to an out-of-court settlement with the firm Acacia, and in 2008 paid $ 4.2 million under the claim of FireStar Software.
By the way, Red Hat subscriptions provide customers with legal protection against lawsuits related to using Red Hat software. The fact is that patent trolls often attack not Red Hat itself, but its customers, and then the company usually takes a hit.
“Sometimes customers call us and say they have been sued for using our products. Then we stand up for their defense, ”Whitehurst says. - We strive to resolve each case in an optimal way. We prefer to sue someone, because their patents are not applicable for one reason or another. With someone it remains only to negotiate outside the court. Moreover, we usually conclude a pre-trial agreement so as to take out from the blow not only our customers, but also all the users of the corresponding program code. ”
Despite patent troubles, Red Hat has become one of the leading players in the corporate server market, focusing on what it does best: creating superior software.
“We never come to the client and do not say:“ There is one application that is not supported on the RHEL platform, ”says Cormier. “If it is supported on Windows, then it is supported on RHEL.”
Daniel Vandemore, the chief architect of Net-Results, has been working with Red Hat solutions for more than ten years and agrees that the transition to a balanced strategy for releasing new versions has greatly increased the attractiveness of Red Hat for corporate customers.
“Packaging applications for a frequently updated distribution is like trying to catch a falling knife,” says Vinimor. - Literally everything, from the new version of glibc and up to such trifles as a change in the version of MySQL, can hurt the health of your application. In this case, there are so many possible configurations that if you try to test them all, you may not have time to develop. By curbing this unpredictability and providing support for RHEL over the course of several years, Red Hat has significantly increased the appeal of its operating system for third-party software vendors. ”
In 2012, Red Hat overcame an important milestone and became the first company in history, whose annual revenue amounted to one billion dollars and was fully (or almost completely) obtained through the development and maintenance of open source software. In 2016, the company consolidated its leadership by reporting on reaching a mark of two billion dollars in revenue, and by the end of 2017, seeks to take a new bar - three billion dollars.
After acquiring RHEL, the company began an active expansion and soon began to bypass competitors such as Novell, which after a long and slow extinction was sold by Attachmate in 2010. Red Hat is no longer limited to operating systems and today offers virtually all types of software that may be required in a data center when deploying and running applications, including solutions such as middleware, storage systems, security tools, virtualization systems and management tools. Red Hat's total revenue for the first three quarters of this reporting year was $ 2,148 million (net profit - $ 271 million), and Red Hat is expected to surpass the $ 3 billion mark by the end of the year (the results will be officially announced at the end of March).
Just ten years ago, Red Hat's annual revenue was $ 523 million, reaching a billion by 2012. In this case, the main money comes from software subscriptions, the rest of the funds the company earns on training and services.
"This is just another, one of many, proof that open source software is a fundamental part of IT infrastructures," said Jim Zemlin, head of the Linux Foundation. “Red Hat has proven that it’s a viable business model, that it’s the best way to distribute software, and that you can make good money on it.”
Red Hat does not think to stop. In 2006, the company made a major purchase by acquiring the development company JBoss Middleware. In November 2010, Red Hat bought Makara PaaS solutions provider, in October 2011, the developer of software storage system Gluster, and in June 2017, Codenvy, a supplier of online development tools for modern container and cloud applications, with a Ukrainian roots.
Red Hat solutions for data centers are not inferior to Microsoft's proposals, and at the same time they have no limitations typical of proprietary software. However, the management of Red Hat believes that the main rival of the company is not at all in Redmond.
“We’re almost out of touch with Microsoft,” Whitehurst says, noting that Red Hat is mainly involved with those who switch or migrate from Unix to Linux, and its main competitors in this field are Oracle and IBM. In the future, according to Whitehurst, Red Hat will grow at the expense of IT infrastructures for public and private cloud environments, as well as for solution providers of the Software as a Service class . And to fight here, first of all, is to be with VMware virtualization systems.
Many people believe that Red Hat is beyond its powers. VMware dominates the server virtualization market, and now its main rival is Microsoft Hyper-V. Closes the top three Citrix with its open source Xen hypervisor, while Red Hat and Oracle are still competing for fourth place.
The Red Hat virtualization platform is built on the basis of the KVM hypervisor, which today occupies less than one percent of the market, said Chris Wolf, an analyst at Gartner. In his opinion, Red Hat has good technologies, but “at first it will have to bypass Oracle, which today is engaged in virtualization very seriously.”
Red Hat has released a completely new specialized virtualization product called Red Hat Virtualization (RHV) , which offers many new features and is finally equipped with a management system that is not tied to Windows Server, which is important for those who want to use only open source software. , such as Java, JBoss and RHEL. But, according to Wolf, Red Hat is much inferior to VMware in terms of integrating its virtualization tools with third-party backup, security, and disaster recovery solutions.
Whitehurst looks at things more optimistically: “They are far ahead of us in virtualization, and we have them in operating systems and middleware. And when it comes to the portability of applications between corporate data centers and cloud environments, all three factors are important. They came off strongly in one of them, but we have a huge advantage in the other two. ”
Not everyone agrees to call Red Hat the first open source company in history to break a billion dollars. As Linux developer Greg Kroah-Hartman points out, Google, Facebook and Amazon are also built on open source software, and Linux has already brought billions of dollars to IBM.
“There are many large companies that rely only on open source software and are actively involved in the life of Open Source projects,” he says. “And they’ve stepped over a billion dollars long ago.”
Yet Red Hat is truly unique in that it makes almost all of its money by developing and selling open source software. Red Hat is also the largest company participating in a Linux kernel development project by software contribution. As Croa-Hartman notes with admiration, “they do a great job, allowing their employees to make a big contribution to open projects. I really like everything that they have already achieved and continue to do. ”
However, Kroa-Hartman notes that Red Hat "has proprietary software and sells it," which is debatable about whether Red Hat can be called an open source company.
It must be said that by acquiring proprietary technologies, Red Hat eventually translates them into the category of open source software, as was done with the JBoss Middleware line.
In 2011, Red Hat itself fueled controversy about its loyalty to the principles of Open Source, when it somewhat moved away from the generally accepted practice of providing source code, trying to protect RHEL sales from attacks from Oracle.
Oracle released its Linux distribution, which, like the CentOS distribution, is built on the RHEL source code, and began to actively poach Red Hat customers, offering technical support at lower prices. In response, Red Hat decided to make it difficult to create third-party distributions based on its code and began to provide it in an already final, integrated form, without the generally accepted division into the canonical Linux kernel and additional patches to it.
Kroa-Hartman claims that this did not create the slightest problem for the developers of distributions. This Red Hat move didn’t affect the release of new versions of CentOS, but it fits well with Red Hat’s longtime desire to make money from open source without violating the GPL license.
“If you’re honest, Oracle said plain language:“ This is a complete copy of Red Hat, and we offer it cheaper than Red Hat, ”Whitehurst says. “We had to protect our business model, because if we weren't successful, Oracle would hardly have distributed its source code the way we distribute it, the same CentOS and everyone else.”
According to Whitehurst, there is plenty of room on the market for those who want to repeat the success of Red Hat. Annual sales of corporate software amount to more than $ 180-200 billion, of which only $ 30-40 billion falls on segments in which Red Hat is present.
"There are huge sectors where we are not present in any way," Whitehurst says. - The same DBMS.
The head of the Linux Foundation, Jim Zemlin, has many examples of the fact that today innovations are created precisely by young companies, among which he singles out the developer of Hadoop solutions Cloudera, as well as SugarCRM. Zemlin believes that more than one Red Hat company will appear in the world, noting that the success of the Open Source movement depends on both those who create innovative open source software products and those like Red Hat, develops and sells open source software products .
According to Zemlin, without the open code Salesforce.com (Red Hat client), Google, Amazon and Facebook could not become what they have become.
"I think there will be more such companies as Red Hat , but such an approach narrows the scope of such a notion as success with the use of open source software," says Zemlin. “In fact, we need to look at hundreds and hundreds of companies that take open source and achieve huge business success using this code in a variety of ways.”
According to the current head of Red Hat for products and technologies, Paul Cormier (Paul Cormier), who took over as vice president of development in 2001, to turn from a small software company into a serious player in the corporate software market, Red Hat should replace Red Hat Linux is an enterprise-class software product that will keep code open, but will cease to be free.
Cormier was called crazy in Red Hat. "The developers were not worried about any business models then," says Cormier. “They just wanted to do Red Hat Linux.” So after the transition to a new business model, we had a certain turmoil, some of the developers left, but most of them remained. ”
')
Cormier’s proposal put the company on the line, but he defeated the skeptics , managing to convince then-CEO Matthew Szulik to stop Red Hat Linux production. The latest stable version of this operating system came out in 2003, at the same time the first version of the Red Hat Enterprise Linux distribution kit (RHEL) was released to the market. Since then, the company has shown steady growth in revenue and profits, fueled by the growing popularity of Linux-based servers and the successful expansion of Red Hat to new markets.
Looking back, it is obvious that Cormier’s perilous plan turned out to be prophetic, although it seemed to many people to be complete nonsense. How did Red Hat manage to risk, win, and build on success?
Software, scooters and toy blasters
Red Hat was founded in 1993 by Bob Young (Bob Young) and Marc Ewing (Marc Ewing), and owes its name to the hat Ewing wore while studying at Carnegie Mellon University. But Ewing had already left Red Hat, and Young had left the company management by the time Cormier came to it. His arrival coincided with the release of the new version of Red Hat Linux, and he well remembers his conversations of that time, including the conversation with the head of the developers.
The people in the office, meanwhile, rode scooters and firing at each other from toy blasters, it was cool.
The main money Red Hat then earned on technical support by phone, and Cormier understood that such a business model does not scale.
“We really had no business model,” he says. - Boxes with Red Hat Linux were sold in bookstores for $ 29.95, and yet it could be downloaded for free from the Internet. At that time, we had, perhaps, a dozen customers who paid us money, mostly for talking on the phone. And we knew that all this does not scale: people simply did not understand what to pay for. ”
Cormier recalls many late-night meetings where he urged the company's top managers to replace Red Hat Linux with Red Hat Enterprise Linux, which from the very beginning would be offered only on a paid subscription basis, including for receiving any updates, patches and patches. According to him, the process was tight, because in search of a strategy that could bring the company billions of dollars, management did not want to abandon the terms of licensing open source software.
Cormier won, but Red Hat still retained the practice of free software distribution. While RHEL brings money to the company, the spirit of that first Red Hat Linux lives in the Fedora operating system, which was first introduced in 2003 and was based on the Red Hat Linux code, and is now developing as part of an open source project sponsored by Red Hat. Today, Fedora serves as a kind of testing ground for new features and technologies, which are then offered to corporate customers as part of the commercial product RHEL.
The RHEL source code is also available under the GPL (GNU General Public License) licensing terms and can be freely compiled by anyone. But Red Hat provides finished products based on this code only for money. Yes, there is such a thing as CentOS - a free RHEL clone compiled from Red Hat source code by CentOS developers. But this does not prevent Red Hat from charging for a subscription to RHEL, since it is believed that only a subscription to RHEL guarantees the functionality of the applications written for it after updating the operating system.
“The Red Hat Enterprise Linux binaries, the same binary that runs on a computer, are not free,” says Red Hat CEO, Jim Whitehurst. - The source code is free and available to anyone. But we compile the binaries, and we are the ones who make them a corporate-class product. ”For large customers, it is equally important that once every two years Red Hat releases versions of RHEL with so-called long-term support. Such versions have been supported for ten years, moreover, to the extent that Red Hat has been tracking Linux critical fixes and porting them to older versions of its operating system.
"Put yourself in the place of the New York Stock Exchange, and you will realize that frequent changes in the operating system versions on which you have everything built are what you least want," Whitehurst says.
If Red Hat continued to distribute software for free and sell technical support, "it would have remained a tiny company on the verge of profitability," Whitehurst adds.
Red Hat Linux was very similar to today's Fedora, with its high speed of releasing new versions in order to offer the latest technology to users. But new versions and fixes often disrupted the performance of old applications and left no chance for the formation of an ecosystem of third-party software and hardware solutions. With the transition to RHEL, Red Hat was able to offer corporate customers exactly what they needed: a stable life cycle and clear release plans, as well as a streamlined installation scheme for software fixes without the risk of disrupting system and application performance. And this model has certainly proved its viability.
Patent Troll Invasion
With the growth of cash receipts, Red Hat became the object of an attack by patent trolls and especially zealous advocates of open source software. Despite an unusual position for software companies - Red Hat openly opposes the very concept of software patents - the company has developed a pragmatic strategy for acquiring security patents. Red Hat goes to court when it comes to fundamental principles, and resolves not so important extra-judicial disputes, if it is cheaper.
“If you accept the concept of modular innovation, when many different people contribute to progress, building on the achievements of predecessors, then it becomes obvious to you that patents only slow things down,” Whitehurst says. “I do not think that we are so different from any other software company, we just have to deal with a huge mass of patent trolls.”
Red Hat lawyers always have a case in court, especially in a court in the Eastern District of Texas (known as the “Pit Claims Facility”). The company even somehow merged with its long-time rival, Novell, to win the case against the daughter of the famous patent troll Acacia in 2010. Moreover, the newly-minted partners once prepared a joint expert opinion on behalf of Microsoft, which was needed when considering a patent lawsuit.
However, Red Hat does not shy away from solving problems with money. In particular, in April 2011, the company went to an out-of-court settlement with the firm Acacia, and in 2008 paid $ 4.2 million under the claim of FireStar Software.
By the way, Red Hat subscriptions provide customers with legal protection against lawsuits related to using Red Hat software. The fact is that patent trolls often attack not Red Hat itself, but its customers, and then the company usually takes a hit.
“Sometimes customers call us and say they have been sued for using our products. Then we stand up for their defense, ”Whitehurst says. - We strive to resolve each case in an optimal way. We prefer to sue someone, because their patents are not applicable for one reason or another. With someone it remains only to negotiate outside the court. Moreover, we usually conclude a pre-trial agreement so as to take out from the blow not only our customers, but also all the users of the corresponding program code. ”
Despite patent troubles, Red Hat has become one of the leading players in the corporate server market, focusing on what it does best: creating superior software.
“We never come to the client and do not say:“ There is one application that is not supported on the RHEL platform, ”says Cormier. “If it is supported on Windows, then it is supported on RHEL.”
Daniel Vandemore, the chief architect of Net-Results, has been working with Red Hat solutions for more than ten years and agrees that the transition to a balanced strategy for releasing new versions has greatly increased the attractiveness of Red Hat for corporate customers.
“Packaging applications for a frequently updated distribution is like trying to catch a falling knife,” says Vinimor. - Literally everything, from the new version of glibc and up to such trifles as a change in the version of MySQL, can hurt the health of your application. In this case, there are so many possible configurations that if you try to test them all, you may not have time to develop. By curbing this unpredictability and providing support for RHEL over the course of several years, Red Hat has significantly increased the appeal of its operating system for third-party software vendors. ”
Towards the third billion
In 2012, Red Hat overcame an important milestone and became the first company in history, whose annual revenue amounted to one billion dollars and was fully (or almost completely) obtained through the development and maintenance of open source software. In 2016, the company consolidated its leadership by reporting on reaching a mark of two billion dollars in revenue, and by the end of 2017, seeks to take a new bar - three billion dollars.
After acquiring RHEL, the company began an active expansion and soon began to bypass competitors such as Novell, which after a long and slow extinction was sold by Attachmate in 2010. Red Hat is no longer limited to operating systems and today offers virtually all types of software that may be required in a data center when deploying and running applications, including solutions such as middleware, storage systems, security tools, virtualization systems and management tools. Red Hat's total revenue for the first three quarters of this reporting year was $ 2,148 million (net profit - $ 271 million), and Red Hat is expected to surpass the $ 3 billion mark by the end of the year (the results will be officially announced at the end of March).
Just ten years ago, Red Hat's annual revenue was $ 523 million, reaching a billion by 2012. In this case, the main money comes from software subscriptions, the rest of the funds the company earns on training and services.
"This is just another, one of many, proof that open source software is a fundamental part of IT infrastructures," said Jim Zemlin, head of the Linux Foundation. “Red Hat has proven that it’s a viable business model, that it’s the best way to distribute software, and that you can make good money on it.”
Red Hat does not think to stop. In 2006, the company made a major purchase by acquiring the development company JBoss Middleware. In November 2010, Red Hat bought Makara PaaS solutions provider, in October 2011, the developer of software storage system Gluster, and in June 2017, Codenvy, a supplier of online development tools for modern container and cloud applications, with a Ukrainian roots.
VMware is “far ahead” of Red Hat in virtualization
Red Hat solutions for data centers are not inferior to Microsoft's proposals, and at the same time they have no limitations typical of proprietary software. However, the management of Red Hat believes that the main rival of the company is not at all in Redmond.
“We’re almost out of touch with Microsoft,” Whitehurst says, noting that Red Hat is mainly involved with those who switch or migrate from Unix to Linux, and its main competitors in this field are Oracle and IBM. In the future, according to Whitehurst, Red Hat will grow at the expense of IT infrastructures for public and private cloud environments, as well as for solution providers of the Software as a Service class . And to fight here, first of all, is to be with VMware virtualization systems.
Many people believe that Red Hat is beyond its powers. VMware dominates the server virtualization market, and now its main rival is Microsoft Hyper-V. Closes the top three Citrix with its open source Xen hypervisor, while Red Hat and Oracle are still competing for fourth place.
The Red Hat virtualization platform is built on the basis of the KVM hypervisor, which today occupies less than one percent of the market, said Chris Wolf, an analyst at Gartner. In his opinion, Red Hat has good technologies, but “at first it will have to bypass Oracle, which today is engaged in virtualization very seriously.”
Red Hat has released a completely new specialized virtualization product called Red Hat Virtualization (RHV) , which offers many new features and is finally equipped with a management system that is not tied to Windows Server, which is important for those who want to use only open source software. , such as Java, JBoss and RHEL. But, according to Wolf, Red Hat is much inferior to VMware in terms of integrating its virtualization tools with third-party backup, security, and disaster recovery solutions.
Whitehurst looks at things more optimistically: “They are far ahead of us in virtualization, and we have them in operating systems and middleware. And when it comes to the portability of applications between corporate data centers and cloud environments, all three factors are important. They came off strongly in one of them, but we have a huge advantage in the other two. ”
Disputes about terms and loyalty to principles
Not everyone agrees to call Red Hat the first open source company in history to break a billion dollars. As Linux developer Greg Kroah-Hartman points out, Google, Facebook and Amazon are also built on open source software, and Linux has already brought billions of dollars to IBM.
“There are many large companies that rely only on open source software and are actively involved in the life of Open Source projects,” he says. “And they’ve stepped over a billion dollars long ago.”
Yet Red Hat is truly unique in that it makes almost all of its money by developing and selling open source software. Red Hat is also the largest company participating in a Linux kernel development project by software contribution. As Croa-Hartman notes with admiration, “they do a great job, allowing their employees to make a big contribution to open projects. I really like everything that they have already achieved and continue to do. ”
However, Kroa-Hartman notes that Red Hat "has proprietary software and sells it," which is debatable about whether Red Hat can be called an open source company.
It must be said that by acquiring proprietary technologies, Red Hat eventually translates them into the category of open source software, as was done with the JBoss Middleware line.
In 2011, Red Hat itself fueled controversy about its loyalty to the principles of Open Source, when it somewhat moved away from the generally accepted practice of providing source code, trying to protect RHEL sales from attacks from Oracle.
Oracle released its Linux distribution, which, like the CentOS distribution, is built on the RHEL source code, and began to actively poach Red Hat customers, offering technical support at lower prices. In response, Red Hat decided to make it difficult to create third-party distributions based on its code and began to provide it in an already final, integrated form, without the generally accepted division into the canonical Linux kernel and additional patches to it.
Kroa-Hartman claims that this did not create the slightest problem for the developers of distributions. This Red Hat move didn’t affect the release of new versions of CentOS, but it fits well with Red Hat’s longtime desire to make money from open source without violating the GPL license.
“If you’re honest, Oracle said plain language:“ This is a complete copy of Red Hat, and we offer it cheaper than Red Hat, ”Whitehurst says. “We had to protect our business model, because if we weren't successful, Oracle would hardly have distributed its source code the way we distribute it, the same CentOS and everyone else.”
Is it possible to repeat the success of Red Hat?
According to Whitehurst, there is plenty of room on the market for those who want to repeat the success of Red Hat. Annual sales of corporate software amount to more than $ 180-200 billion, of which only $ 30-40 billion falls on segments in which Red Hat is present.
"There are huge sectors where we are not present in any way," Whitehurst says. - The same DBMS.
The head of the Linux Foundation, Jim Zemlin, has many examples of the fact that today innovations are created precisely by young companies, among which he singles out the developer of Hadoop solutions Cloudera, as well as SugarCRM. Zemlin believes that more than one Red Hat company will appear in the world, noting that the success of the Open Source movement depends on both those who create innovative open source software products and those like Red Hat, develops and sells open source software products .
According to Zemlin, without the open code Salesforce.com (Red Hat client), Google, Amazon and Facebook could not become what they have become.
"I think there will be more such companies as Red Hat , but such an approach narrows the scope of such a notion as success with the use of open source software," says Zemlin. “In fact, we need to look at hundreds and hundreds of companies that take open source and achieve huge business success using this code in a variety of ways.”
Source: https://habr.com/ru/post/351170/
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