The Economist: Open-source software: Venture communism

Thanks to James
Myers for this link.

“TIRELESS technology investors will soon have a new seam to
mine. Red Hat, chief distributor of the popular Linux operating
system, filed its initial public offering on June 4th. If the
flotation goes ahead, Red Hat will be the first firm that makes its
living from selling ‘open-source’ software, which is produced by
volunteers rather than paid programmers, to go public. The listing
also suggests that the financial establishment thinks a revolution
may be under way in how software is written.'”

Red Hat was always likely to be first out of the gate. It has
caught the eye of many of the best-known high-tech companies: such
well-known firms as Compaq, Dell, IBM, Intel, Netscape (now owned
by AOL), Novell, Oracle and Germany’s SAP have all taken minority
stakes in the company.

Other listings are in the pipeline. On June 8th Caldera Systems,
which supplies Linux operating systems, said that it too is
preparing to float. And in recent months several Silicon Valley
venture capitalists have invested in open-source start-ups. In May,
Kleiner Perkins Caufield & Byers invested an undisclosed sum in
LinuxCare, which provides training and technical support for the
operating system. In November, Sequoia Capital put $5.5m into VA
Linux Systems, which makes powerful, but cheap, computers built
around Intel chips and Linux. And Accel Partners has a stake in
Scriptics, which supplies software tools based on Tcl, another
open-source language.

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