Red Hat has been doing the dog-and-pony this week, and by accepting the criticism of open source licensing gotten the rest of the industry into a bad odor.
Why aren’t there any $1 billion open source companies, asked Glyn Moody. Strange criticism, given that Red Hat is now worth nearly $6 billion.
Of course, you then note, he must be talking about sales. It’s true, Red Hat’s run rate is still short of the mark at about $800 million. It’s close to that of Novell in that regard. And I haven’t even mentioned Ubuntu and Canonical yet. (OK, now I did.)
On the other hand it’s also possible that Moody’s definition of “an open source company” is too narrow. He seems to think that you’re only an open source company if all you do is sell support for open source products, and we should only count that revenue.
When you put it that way Red Hat’s success becomes even more remarkable. No one has to pay an open source software company for its code. If a pure open source company is only one that depends on voluntary code payments for its bread, then getting $800 million of such payments a year is pretty amazing.
There may never be another Red Hat, a company that grows organically out of Linux support contracts, quietly building billions in value thousands of miles from Silicon Valley. So what?
Open source is still a raging success, and not just for customers who have seen costs slashed, or brought inside, by the availability of free online code.
IBM, for instance, rationalized what a decade ago was an incompatible collection of hardware and business units around open source software. Linux now runs on all kinds of IBM hardware, open source tools drive its service business. Do I have to mention how much money it’s worth or what its sales figures are?
Google is not the only SaaS outfit driven by open source. There are dozens, some of which are vertical, others horizontal in nature. Google’s open source Android design may have saved Motorola, to cite one example.
I suppose none of that counts, because IBM and Google and Motorola aren’t relying entirely on voluntary payments of support for their code. They do other things.
But so what? The success and importance of open source should not be measured entirely by Red Hat, even though Red Hat is a great example of what’s possible.
The billions saved by customers, the hundreds of thousands of jobs created for developers working on open source code, the hardware and service revenues made possible by open source, these count, too.
Open source is one of the great, continuing success stories of our time because there are many different ways to skin the open source cat. You can put it under your Red Hat or use it as an ingredient in many other business models, models that succeed on the bottom line. There are still more such models to be discovered.
If that’s failure, give me more failures like it.
Dana Blankenhorn has been a journalist, writer and part-time futurist for over 30 years.
