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Linux.com: Betting It All on Linux and Choice

Dec 13, 1999, 23:49 (1 Talkback[s])
(Other stories by Ronny Ko)

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"With so much money flowing into Linux, Red Hat is using its growing capital to expand its business operations beyond the operating system. As much as Microsoft owns Windows, Linux cannot be claimed by Red Hat as its own. Today, Red Hat is betting its entire business by forming strategic partnerships with industry players such as IBM, Dell and Intel. Red Hat wants to ensure that these companies will aggressively sell and ship Red Hat Linux."

"The business model is simple. Red Hat wants its brand to be synonymous with Linux as much as ketchup is synonymous with Heinz. With a larger installation base, Red Hat can benefit from charging for technical support...."

"To protect and deliver shareholder value, Red Hat acquired Cygnus Solutions for under $700 million in stocks. Cygnus makes compilers that compile applications to run on Linux. There were rumors that Red Hat was interested in acquiring Corel Corporation. If this were true, Red Hat would have gained immediate access to the consumer because it could have leveraged Corel's consumer reputation to sell and gain wider acceptance at the home consumer market."

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