“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.”