InformationWeek
Defining The Business Value Of Technology
December 20/27, 1999
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Red Hat Linux 6.1
By Jason Levitt
pen source became a brand and a revolution this year--and Linux was its poster child. For companies in need of inexpensive and highly customizable software to build an online presence, the operating system provided the comfort of full source code with a price tag that was easy to swallow. Migration to Linux in the back office was further justified with support from heavyweight IT vendors such as Dell Computer, Hewlett-Packard, IBM, Oracle, SAP, and SGI.But critics weren't convinced by free source code. Microsoft, whose Windows NT Server platform is viewed as a direct competitor to Linux, emerged as the most vocal detractor. Microsoft cited long-term support costs, the immaturity of the Linux kernel for symmetric multiprocessing, lack of a journaled file system, and mediocre performance--technically pithy, but overkill to some in the industry.
Investors were willing to give Linux time to mature. Convinced that Linux might some day challenge Microsoft in the back office, they kicked Red Hat Inc.'s stock up from an initial offering price of $14 in August to a high of $284 in December, at one point turning the commercial Linux market share leader into a $19.5 billion company, though Red Hat had little but red ink to show.
What Red Hat did get with all that money was the chance to build a Linux distribution and support infrastructure into which enterprise customers would be comfortable buying. The October release of Red Hat Linux 6.1 was the first step. For client desktops, an improved installation GUI and bundling of Sun's StarOffice suite made the operating system more attractive. For server installations, which comprise most Linux business deployments, Red Hat has smoothed out some bumps, but installing, running, and administering the server applications still requires careful reading of the documentation.
The company doesn't make money from selling the software; it makes it from bundling open-source software applications with Linux and selling the bundle as a tested, integrated, and supported product. With so many pieces of the operating system coming from different developers, Red Hat's challenge will be to integrate the server applications so the operating system can be consistently installed and managed. The acquisition of Cygnus Solutions, a leader in open-source software development tools and support, should help with that task.
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