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Bob Young is a self-confessed contrarian with a strong desire to change the world by
allowing people to share and collaborate. The approach has served him well and has
helped turn the Canadian into a multi-millionaire.
Red Hat's approach was unusual at the time and I'm Maggie Shiels and this is my blog for
relied on free software developed by an open-source stories about technology from Silicon
community. Customers were given the right to Valley. My colleague Rory Cellan-Jones
change the code any way they liked and Red Hat sold blogs at dot.Rory.
services to make sure it all worked.
In those early 1990s, many businesses feared that open source would not be stable and
often opted for the proprietary model being sold by the likes of Microsoft. Today, the Subscribe to dot.Maggie
Redmond giant has seen its market share erode; Red Hat has become the world's open-
source leader. You can stay up to date with dot.Maggie
via these feeds.
'Shaggy dog story'
dot.Maggie Feed (RSS)
Mr Young started out as a typewriter salesman and went on to found and run a computer- dot.Maggie Feed (ATOM)
leasing company. That was sold on, but the firm that bought him over ran into financial
difficulties and Mr Young became unemployed with three children to support and a large If you aren't sure what RSS is you'll find
mortgage. our beginner's guide to RSS useful.
"Mine is a sort of shaggy-dog story and goes something along the lines of 'it doesn't
matter what bad things happen to you. What matters is how you react to them.'"
Latest: Reporters' blogs
He cleaned out his wife's sewing closet, turned it into an office and started again. He
Fergus Walsh:
started a business called ACC Corp that distributed free Unix software. Mr Young also
" I wonder what the great
published a newsletter for former clients using the Unix operating system. Those
William Harvey, physician to
subscribers turned him on to a new freeware version of Unix called Linux.
Barts Hospital in the 17th
He was later told about Marc Ewing, who had created Century, would have made
an enhanced version of Linux called Red Hat. Mr of..."
Young sold the software as fast as Mr Ewing could
Brian Taylor:
produce it.
"In the event, it was an
In 1993, Red Hat Software was created as the two assured and confident
combined their companies and financed their performance by the Finance
fledgling business by maxing out a half-dozen credit Secretary John Swinney - even
cards. as he..."
Soutik Biswas:
It was the perfect marriage of technical nous
" There should be zero
meeting sales savvy - not unlike that forged by
tolerance for corruption,
Steve Jobs and Steve Wozniack in the early days of
India's well-meaning law
Apple.
minister Veerapa Moily told a
By 2000, the company had captured 25% of the meeting of federal
server operating system market, and Red Hat held investigators..."
over 50% of the global market for Linux systems. Richard Black:
Today. it is the largest distributor of the Linux operating system. "Paris and Brussels are
presently seeing skirmishes
'Hoarding knowledge'
'Hoarding knowledge'
over the fate of what's
The road to dominance was not an easy one, especially given that Red Hat was pushing become the oceans' most
against the established system of paying exorbitant fees to licence software and for iconic creature - the..."
service agreements. Mark D'Arcy:
"Speaker Bercow may be
The behemoth of the day was Microsoft, which
annoying any number of senior
engendered little love due to its hard-nosed business
MPs by shutting them up when
practices.
he thinks they've spoken
"My problem wasn't Microsoft. My problem was too..."
with this proprietary model where the engineers
Jonathan Amos:
who were using the technology couldn't make
"The fundamental barrier to
changes to it. This slows technological
greater space activity is the
development.
cost of access. If people didn't
have to part with squillions..."
"My background was renting and leasing
computers and everyone knew in the hardware business that hardware evolved Our blog about issues in News
faster than software. Our blog about issues in Sport
Our blog about photos and News
"It wasn't until I got involved in this open-source model that I realised the problem is Our freedom-of-information blog
the hardware guys all shared their knowledge while the software guys were hoarding BBC Internet Blog
knowledge. They were not sharing and as a result the software did not evolve Radio 4 Blog and 5 Live Blog
forward very quickly." Magazine Monitor and See Also
"My friends who were propeller-head programmers thought this was a good idea but
no serious businessman did, and I think of myself as a serious business guy. They
believed that software had to be proprietary. That was the only way you could make
money."
"It was the software engineers telling me that the internet needed to be able to share
the tools they are using. They needed to work with each other. They couldn't have a
big corporation in the middle of their project of building these things - and when you
saw that, you saw open source as the only way to solve this."
"He was pushing Java and he was saying your alternatives were: you can continue to
pay homage to Microsoft, or you can always use this free open-source software, or
you can use my Java solution.
"The punchline of course being we should all use Java. But what was hugely
informative to me was I thought no-one was paying any attention to this open
software thing and here is one of the most successful guys in technology dismissing
it as unimportant.
"I suddenly go 'holy cow!' Not a single major billion-dollar company takes this
seriously. I know all these propeller-heads who think it is the right thing to do, this
sure looks like an opportunity to me. And so, by being as contrary as I am, Scott got
me on the right path."
Business inspiration
Still, Mr Young was a businessman at heart; he had to work out how to make this dream
pay its way.
"So we realised we could afford to give away the product and the customers would
have to ask us for help to keep it running."
"If a lawyer comes up with a new argument that gets his client off and wins a case in
front of the Supreme Court, every other lawyer on the planet can use his argument
without asking his permission.
"So how does a lawyer make money? Well, lawyers obviously make lots of money -
there's towers in New York and towers in London full of lawyers because it is a very
valuable service."
Over the years, Red Hat's approach more than paid off. When it went public in 1999, its
share price tripled to over $52 a share on the day and helped to heat up a then-tepid IPO
market. At the time, it was said the Red Hat sell-off achieved the eighth-biggest first-day
gain in the history of Wall Street.
The sale was also seen as an important test of the open-source operating system's
appeal, paving the way for other like-minded companies. Mr Young says this all
underlines just how far the open-source model has come:
"I am thrilled that it has gone so mainstream. I saw it as a very necessary piece and
I'm certainly excited that I had a small influence on it.
"I don't care how well you run your proprietary closed tech company, you simply
can't move your technology forward as quickly as the people who have access to
common standards where they can all work collaboratively on the technology."
Not long after the IPO, Mr Young made way for a new CEO. Today, he runs a self-
publishing platform called Lulu along the same lines as he ran Red Hat and with the aim
of doing good.
"I started Lulu not to make money, but to make the world a better place.
"I want to enable authors right now who are getting rejection slips from publishers
and give them a platform that they decide what they publish and when they publish it
and who they publish it for.
"And if we are successful, we will have made the world a better place both for those
authors and for the customers who are reading books that they would not otherwise
have had access to."
Last year, Lulu created 400,000 titles and sold over 1.6 million books. The company
claims more than 1.8 million users.
"I look at this book and the author has the passenger list of the last voyage on the
back and there are my great-grandparents. What was fascinating was that this was a
great example of a book that had relatively little demand. By putting it on a site like
Lulu, the author was able to deliver value to people like me who would have had no
way to learn this story."
Another recent favourite was called Googled - it's by Ken Auletta and is a history of the
search giant. Again, Mr Young found a personal connection:
"I get to the front of chapter three and it goes into a little bit of the history about
how in early 1999 Google had nearly run out of money but for a little angel money
they had and a contract with a software company they had in North Carolina called
Red Hat.
"I go 'holy cow'. I funded the start-up of Google. Why didn't we get shares? Why did
we take money from them? It's a fun story and nice to know Red Hat played a little
part."
Finally and apropos of nothing, if you want to know how Red Hat got its name, watch this
fun video [6.98Mb MOV].
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1. At 12:39pm on 15 Jun 2010, IAmTheK wrote:
Thanks Maggie. Very good article.
Still, its good to see tat open source Linux is offering an alternative to the established
monopolies. If it wasn't for good competition, the monopolies wouldn't improve (look at
Internet Explorer for the perfect example!)
'nuff said.
The current desktop and laptop monopoly must be broken. Firefox has gone some way to
achieving this, the same patience and effort should be put into achieving the same sort of
success for Thunderbird, OpenOffice and Linux. The consumer must have a genuine
choice to avoid the vendor lock-in that has blighted IT for so many years.
So Maggie, as your technology correspondent colleague is busy playing with his new toy,
it's down to you to champion further the cause of open source, time to put the needs of
consumers before the shareholders of a handful of greedy monopolistic IT companies.
It is odd how the “Open source community” seems to champion people who are in effect
trying everything in their power to take their Linux distro into the retail market and away
from the “free and open” intention that Linux was… Sorry is .
Everyone in the industry watched what happened with the netbook fiasco it did linux as a
platform no favours and having Ubuntu bemoan MS for giving cheap licences for Fis
imaged machine to the manufacturers when in fact your model is “meant” to free.
Open source software like open office or gimp etc are great products well worth a
mention but then they are not platform dependant and are the true champions of open
source in my opinion.
Linux has a long way to go to be before it can be called user friendly and that is any of
its flavours and until then the average user will steer clear and unfortunately MS and
Apple now see Google as the bad boy and handshakes behind closed doors by the big two
will hinder the open source community in ways I think that will surprise many in all
camps.
I am not really a fan of bob as he never seems to admit he seen a business opportunity
to make money and went for it , good for him but a champion of “open source” or “free
software” he is not.
@ Alexander. Are you perhaps confusing user friendly with absolutely dreadful but
familiar? My family and myself have absolutely no issues with the useability of our
favourite Linux distro (SimplyMEPIS) due to the fact we have become familiar with a
superior alternative to the usual suspect desktop OS.
I have four flavours of linux running in my home and 2 in the office but MS and Apple are
easier and more convenient by miles I point you to the Netbook fiasco young sir.
* There are a couple of installs of Vista in my household. A laptop that hardly ever gets
used and a Business Edition partition on the main desktop that will either get wiped or
virtualised as and when I need the disk space.
As long as the pump has has a green nozzle on it, it won't wreck your engine: as long as
both the ATM and the card have the word 'Visa' written on them (or whatever) you can
get your money.
Now that so much of the software we consume is running on a machine other than our
own, it no longer matters if that software is locked down and controlled, or not. We're
not buying the software, we're buying what the software can do. I could have the entire
source code for Amazon, but I still wouldn't be able to get a book.
In an online world, source code has stopped being an asset. As a software developer, the
best you can hope to do, is to stop your software becoming a liability - which is why the
support has become the salable commodity and not the software. Unsupported software
is worse than useless in an online world, because it is one exploit away from becoming a
complete liability to its users.
When governments are willing to name specific unsupported software products - and
advise their citizens not to use them - that's when you know that this idea has gone
mainstream.
You are totally missing the point of 'free software'. If you'd taken the trouble to read the
Free Software Definition, you'd see that free refers to freedom and not to price. The
freedom to run, study, change and distribute software for the benefit of the IT
community. We did it back in the 1970's so it's hardly a new concept.
Nobody is trying to get round GPL to make money because GPL doesn't restrict you from
making money out of free/open-source software. But, by and large the software isn't
retailed in the way that Microsoft stuff is, and anyway the priority behind free/open-
source is to enrich the IT world and not to gain financially.
I don't know which Linux distros you've tried, but a lot of my family and friends are using
the latest Ubuntu or Fedora, and have not reported any 'user-unfriendly' issues.
I've been in IT a lot of years and seen a lot of software and I can categorically state that
operating systems based on Unix, which was designed as a multi-user, portable, secure
system with networking and the internet in mind; are superior to any version of Microsoft
Windows, which has always had to play catch-up in terms of security and networking,
because it was designed as a stand alone system, to be mass marketed to earn a quick
buck.
If you read the global tech news, you'll see that hundreds of companies and public
organisations are switching to open source in general and Linux in particular, all around
the world, from Asia through Europe and Africa to South America, both for desktops and
servers. They have finally realised that Microsoft has abused its monopoly position to rip
them off with mediocre software at high prices.
But what really bugs me, is that when I walk into a PC retailer for a new PC I can't
choose which operating system I want. That monopoly has to be broken, the consumer
must have a choice.
@linuxrich
You said the one word “tweak” the general public and business are not particularly
interested in, and with Bo tasty like SharePoint and with MS 2008 hyp v being able to run
linux apps on Virtual layer for MS os’s , virtuall application layers are becoming dominant
and that really makes OS’s a mute choice.
Even my current favourite Distro Debian comes in 5 dvds with a ton of junk and work to
get right i like it by my 13year old son laughs when he see me using it and usually comes
away with “plug and play dad”.
Do not Kid yourself ladies and gentlemen just because you support a thing does not make
it anything other than a personal preference and spending all your time in any one of the
environments MS, UNIX, Apple, Linux makes you less not more and sadly lacking in any
attempt to comment on the IT industry as a Whole, I run a company because I
understand the whole, but i had to work for lots of companies in widely differing
environments to get there even my optics based Phd is just a wall hanging now.
All this means is you cannot modify a work and sell it without contributing your changes
back to the community that gave you the original work. Furthermore thousands of
companies use modified GPL'ed software on a daily basis as part of their internal
software infrastructure with no requirement placed on them to distribute their changes -
many do, but it is not a requirement.
probably better quote from the Gnu direct: we are talking about red hat here, ask
yourself why could not bob just charge for his software direct if this where true why did
he have to find a way round it?
You can charge only for distribution "Distributing free software is an opportunity to raise
funds for development. Don't waste it!"
that is their catch phrase if it was so easy to charge for linux distros the market would be
a very different place.
We run open source development platforms and like others we bend the rules to suit as
under the cooperative's rules the software is available to all comers for "FREE".
http://www.businessweek.com/magazine/content/05_05/b3918001_mz001.htm
oh yes where is the rest of your reply just to remind maybe your where to quick in
replying and missed the rest.
Your response requires validation tell me why unix based system are better how is the
networking better how virtualisation effects the equation , take my company i can
employ 2 MS server techs for the price of one Unix tech, i can source hardware without
concerns about compatibility issues, i have a support /upgrade roadmap stamped in stone
i have System management tools heads above Linux tools,i don’t have to worry about
consultants that are really pre sales with a poor knowledge base and lastly i don't have
to work with or buy from Sun.
I could go on but why i like Linux but i read the same rubbish all the time that Linux has
broke the back etc, it is like the Indian government switching from MS exchange to
Squiremail..I mean come on it is all about money squirrelmail is a decade behind
exchange and rather..Well rubbish.
Show me some stats to prove your point “They have finally realised that Microsoft has
abused its monopoly position to rip them off with mediocre software at high prices.”
Who where when?.
Linux in any flavour is not retail yet by any means , thinking otherwise is ill informed the
General public don’t want to learn anything they just want it to work.
There is no issue with IP because free/open-source software is released under one of the
appropriate copyleft licences.
I don't understand how you claim that Bob Young used an "underhanded method of
charging" or how your company can "bend the rules to suit". There is nothing underhand
or rule bending about re-distributing software when the licence allows you to do that,
whether you charge for it or not. Again, this software is free as in freedom not as in
price. It's not about making Linux distros "retail", that is the economic model used for
proprietary software, the economic model for free/open-source software is totally
different.
As for struggling with five DVDs to install Debian, as far as I'm aware most Linux distros
are available on a live CD. In my Linux circle we use this method to install Ubuntu or
Fedora and can be up and running in about 1/2 to 3/4 of an hour.
And if Microsoft Windows is secure and not over-priced, why is Google planning to
replace its desktops with Mac or Linux?
Read the article about LINUX Inc, i have no problem with companies or org's that offer
services and charge for services or distribution based systems around Linux products.
Bob was very cheeky though he charged for support but in effect offered none which is
bending the rules, I am a business man and I understand economics I just think this “We
are the champion of free” is a bit contradictory, I laughed reading the overpriced MS you
need to check your figures Unix and Linux aren’t to cheap in the back end, Sun can make
you cry even at pre sales at least MS wait to your bashing out the numbers.
You need to take pay attention to the distro vendors who are itching to go retail ask why
they have as many lawyers working for them now as coders.
I have been about the Unix/linux for years, and the move since 97 has been how to make
money, you also miss the point about debian it comes in 5 dvd’s with all the goodies and
requires a rather longer time to get install with all the selections I want and even then it
requires a tender loving touch or it might go in a huff, but hey that is linux for you.
Google planning is it now, I think you will find there wont be any Mac’s either and this
has nothing to do with functionality just PR and market share.
The point which bemuses me is why the Fanboy crowd always jump to defend anyone in
the Linux world or extol their virtues even when they are trying to find ways to change
the ethos of the community even linus is know to succumb to a bit of arm twisting for the
big boys and the greedy.
Bob is a great business man he truly is and I respect that, but a champion of open source
I would have to disagree , we use simillar methods like others but we don't kid ourselfs
we are anything other than a business.
Maybe business just needs to buy stuff from people who look like Redhat? IT
departments get budgets, and Finance departments like to see those budgets spent,
periodically, on big-ticket items?
Our Unix people are moving all our AS/400s to Belgium (that'll be cheap, won't it? I
assume on the logic is that, having the English channel in the way, will improve response
times?): Our Windows guy just blew seven grand on a Sharepoint server (it's a glorified
Wiki, except it needs four quad cores and 8Gigs, in order to run it)... Don't ask me why,
but I'm sure it felt cathartic for them.
So much IT spending and strategy is determined by an old guard of guys who are always
two years away from the Heartattcak Hotel - and so the IT industry perpetually dwells in
a state where it's going to be "great in two years, when all these old codgers have
retired". In some ways, that's Redhat's business pitch: "Just like Solaris, but it runs on a
Dell".
Redhat is a long country mile away from being the best Linux available, but if you work
in business-Linux, you tend to become accustomed to looking at Redhat systems, in much
the same way that Windows guys become accustomed to looking at the MMC, and all its
various gruesome "snap-ins".... Both those worlds are a bit like peering down a time
warp, at a computer from the 1990s, but they cost lots of money, and if systems
administration was a nice job to do, it wouldn't pay so well, now, would it?
Unix , WinTel , and even linux vairations all have their place the problem in the moderm
business enviroment is consultancy and the different business units it entails, pre sales,
technical, post sales, support.
SME and even larger customers like the Public sector are constantly getting duped into
technology and life cycle road maps which do not fit the project they are intended for ,
under specing is rife and pre tender advice and agreements seem to disappear in the
small print.
And dont blame MS or Apple or any Software developer this usaully comes from
manufacturers, they might need to shift say san unit's of a certain flavour this quarter
and that is the message that gets driven down to the consultancy business units, sell this
and not that.
You be better directing your anger at IBM, DELL, SUN, HP, LENOVO and services players
like Computacenter, Capgemini, Cerco etc.
But if we are talking consumer units for the General public then Windows and the Mac's
have it and linux has miles to go yet, and that is just reality related to market share and
public trends and not an opinion.
Again I like linux but lets get real about it or it will forever be labeled into a niche.
It is funny though as probably most people have at least 3 or 4 devices in their house
that run on linux variations like dvr's, washing machines etc..but then again they never
see it.
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