Red Hat’s Success, Open Source’s Failure
Sure the headline is a little harsh. But let The VAR Guy explain. Red Hat is celebrating its 10th anniversary as a publicly held company. Kudos to the Linux and JBoss middleware provider. Now, the problem: Red Hat’s status as the only pure-play publicly held open source company is a troubling fact for the open source industry. The big question: Can other open source companies repeat Red Hat’s profitable, successful business model?
So far the answer is a definitive “Maybe.”
- Sure, Novell’s quarterly profits often push into the black — but SUSE Linux is only a portion of the company’s overall revenues.
- Small, fast-growing open source companies like Alfresco, Digium, SugarCRM and Vyatta seem to be generating more and more business. But are they positioned to deliver ongoing profits?
- Open source seems to be gaining some traction in the IT channel — thanks to promising efforts like the Open Source Channel Alliance and the Novell-Tech Data software appliance effort.
Decade of Waiting
But let’s rewind to 1999, when Red Hat launched its wildly successful IPO. Shares initially tripled during Red Hat’s August 1998 debut on Wall Street.
Would anyone have predicted that no additional open source companies would launch IPOs over the next decade? Ten years without an open source IPO … amazing and somewhat depressing for open source business advocates.
Sure, MySQL seemed to be on the road to an IPO before Sun Microsystems stepped in and acquired the company. And the recession certainly put many high-tech IPOs on ice over the past few years.
But the open source industry needs more examples of sustainable financial success, particularly in pubic markets.