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Computer Reseller News (AU): Those Mad Hatters

BY STUART CLASCOCK

Linux is spreading across the computing industry like wildfire,
and Red Hat Software is furiously fanning the flames.

Red Hat has raced ahead of a competitive pack of Linux vendors
vying to cash in on the worldwide Linux phenomenon.

A keenly focused management team attracts first-class Linux
kernel developers and world-class financial backers, and US-based
distributor is expanding to offices in Silicon Valley, Japan and
Europe.

A who’s who of computer industry heavyweights have taken
minority stakes in the Linux software distributor, fuelling
momentum and adding validity to the alternative operating system.
Red Hat chief executive Robert Young said the Linux distributor
sought these partners as part of a long-term tactical plan to
bolster respect for Linux in the corporate world and on end-user
desktops. Red Hat built a 350-company-strong rescuer program and
recruited corporate VARs to its board of directors.

In recent months, Red Hat secured equity investments from Compaq
Computer, IBM, Intel, Netscape Communications, Oracle and venture-
capital firms Benchmark Capital and Greylock Partners.

Tim Howes, vice president and chief technology advisor of
Netscape’s server product division, said Red Hat provided what
Netscape customers sought: a Linux company that can provide
enterprise support.

“They wanted to broaden Linux’s appeal beyond the hacker
community, beyond the hobbyist community,” said Howes. “The other
thing is that Red Hat is very open to Linux in support of
commercial endeavours, people shipping products they charge for on
top of Linux. They are also practical and business-minded.”

Behind the scenes at Red Hat is a study in meticulous execution
of good ideas, not a meteoric rise or overnight success. Red Hat
took from 1995 to 1998 to show the marketplace there was a
successful financial model to be built around non-proprietary
software, Young said. An additional eight months were needed to
seal the deals with Netscape and Intel, the first in the series of
pacts.

“All of these companies were intrigued by Linux,” said Young.
“It was as if suddenly the senior management had woken up to the
opportunity that [Red Hat co-founder] Marc Ewing and I spotted in
’95. Why wouldn’t the world prefer a better operating system that
no one controlled?”

Young’s resume offers some insight into Red Hat’s success. While
the company has savvy to spare, Young is its foremost spokesperson,
deal- maker and chief optimist. He spotted Linux’s commercial
potential long before most others.

Before Linux, Young was immersed in the Unix world, forging
contacts in highpowered user groups on both coasts. He published a
newsletter for the user groups named New York Unix, and that led
him to Linux. His readers peppered him with stories about free
software and the Linux OS.

“When I first saw Linux in 1992, people were trying to assure me
there was no economic model or engine driving it,” Young said. “I
was a big Linux sceptic, yet every time I looked at it, the
technology kept getting stronger, the number of users kept growing
and the purposes they kept putting the technology to kept get-ting
more sophisticated.”

Soon, Young realised most people think of software as being
written for the shelves or retail stores such as CompUSA, when, in
fact, the majority of software is written for internal
applications. Meanwhile, the Internet kicked into high gear, and
engineers were quick to collaborate on projects benefiting them
internally. “It benefited their institutions, and it didn’t cost
them anything to give it away because they had no commercial
interest in this software,” he said.

Young started publishing a catalogue of Linux products and began
shopping around for a product he could brand. Gleaning help from
his contacts within the Unix community, he hooked up with Ewing,
who had started the Red Hat project but was looking for financial
and marketing assistance, Young said. They met in 1994 and merged a
year later.

Red Hat’s goal is to prove to major technology vendors and
customers that having an operating system that is not owned by
anyone is not only viable but can be a better system. “The problem
is the industry has always complained about Microsoft’s ownership
of the infrastructure layer that the rest of the industry is
building technology around,” Young said.

A breakthrough came in 1996 when an industry research group
deemed Red Hat’s Linux the “product of the year” in the operating
system category. Actually, it tied with Microsoft Windows NT. “We
were the most surprised at that, all 20 of us including our
receptionist,” Young said.

Reprinted with permission from Computer Reseller News
(Australia). Here is the original
article. (102K size) -lt ed

Copyright Stuart Clascock, Computer Reseller News DWR
publishing, http://www.itnews.com.au

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