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Why Red Hat mattered

Donald Fischer
by Donald Fischer
on November 8, 2018

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Red Hat has been one of the most important companies in the modern technology industry, in the free software and open source movements, and in my personal career. Like many other Red Hat loyalists, I still consider myself to bleed, er, red.

In the immediate aftermath of the news that IBM would acquire Red Hat, I shared an analysis of how the Red Hat business model works, and what we can learn from it. In response there was some critique that my interpretation didn’t give Red Hat the credit it deserved.

Let me be crystal clear: Red Hat deserves a tremendous amount of credit.

Credit where credit is due

Here are some of the many ways that Red Hat led the charge to make open source an industry standard:

  • Took open source pro.🕴️When Red Hat launched the Red Hat Enterprise Linux product, Linux was a hobbyist-centric product sold at the bookstore. Red Hat had the courage and tenacity to put in the work to make it a viable and eventually dominant enterprise-grade operating system, delivering on Michael Tiemann’s ingenious Cygnus Solutions tagline of “making free software affordable.”
  • Proved the subscription model.  💳 Red Hat was one of the earliest enterprise software subscription companies. In an era when rent-seeking perpetual licenses dominated the industry, and Salesforce.com was one of the handful of public subscription software companies, Red Hat was a pioneer in structuring a better deal for subscribing organizations where, as CEO Matthew Szulik often put it, “every year is election year” and value must be proven on an ongoing basis.
  • Scaled it. ⛰️ Red Hat built the largest pure-play open source business in history, with over $3 billion in annual revenue, proving how large the open source opportunity is. While there has recently been much more interest in Red Hat as a $34 billion acquisition than as the $30 billion market capitalization independent public company it was a few months before, it’s indisputable that its acquisition is the largest software transaction in history—a true milestone for open source.
  • Paid maintainers. 💸 Over the years, Red Hat employed key maintainers for many of the packages that make up the Enterprise Linux distribution, including the Linux Kernel, GNOME desktop, and many other system services. (And let’s not forget Red Hat’s progressive IPO share program for open source developers way back in 1999.) While I previously made the critique that most maintainers never had the privilege to work at Red Hat, quite a few did. And that helped move open source forward—a lot.
  • Developed the first upstream-first policy. 🆙 Red Hat pioneered the policy of getting all changes submitted to upstream projects before back-porting to long term support versions. While this is in some ways a pragmatic and self-serving approach (it avoids regressions when Red Hat updates to newer versions), and it has the tradeoff of imposing an uncompensated burden on often unpaid open source maintainers, on the whole this had a positive impact on most projects.
  • Seeded a commercial open source talent pool. 👥Alumni of Red Hat populate the IT industry, whether as founders and executives at startups like Cloudbees, nginx, SolarWinds, or at organizations like the Linux Foundation, or leading the charge at at new giants like Amazon Web Services, Google Cloud, and Microsoft Azure.  

More work to do

Red Hat wasn’t perfect. It narrowly missed multiple seismic shifts in the industry—the rise of open source in consumer mobile led by Android (the quiet “Year of the Linux Desktop” that nobody anticipated), the emergence of open source powered data science and big data, and most significantly the dawn of the public cloud.

In many ways, as a public company subjected to the pressures of Wall Street so early in its journey, Red Hat limited its ambition to a few corners of the enterprise IT landscape during a period where open source expanded into so many other parts of our lives.

In the final tally, Red Hat was an essential, principled standard bearer for open source. But Red Hat was not the pinnacle of open source; the climb is still just beginning.  

Now it’s time for all of us to take open source further, and to build on the successes of Red Hat and other first generation open source companies. We have an opportunity to explore new, broader, and more equitable open source business models, to further ensure the legal protections of open source, and to continue to get the important work done.

Advancing open source to the next phase of its inevitable evolution will require many new ideas and approaches. Let’s get to work.  

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