Blog 11

How do companies who sell open-source products (like Red Hat) make a living?

Apparently, this has been a hot topic on the internet for several years. Personally, I never knew it existed until this class. I had not even given it a thought until you asked the question.

In my research, I found a white paper by Robert Young, who is a founder of Red Hat. It was pretty interesting and can be found at http://oreilly.com/catatlog/opensources/book/young.html . I am sure you have already read it.

To make money with open-source products you need to sell a service not a license. Red Hat has several subscription support levels. They, also, sell a middleware called JBOSS and they get paid for their consulting and integration services. Red Hat actually incorporates hundreds of open source solutions into one software package. Then they sell the support to that package.

Red Hat initially started out as a software distribution company selling cd’s of software. Linux was one of their best selling cd’s and they saw a new potential in the marketing of open-source software. They have done a bang-up job of marketing their brand. I would bet that more people know of Red Hat than Ubuntu or any others.

A lot of companies in the open-source realm do not charge for the desktop version of their software but they do charge if their software is used commercially. They get around the licensing issue because the customers are able to modify the source code.

Some other ways of making money are certification programs and training programs. That’s big money if you ask me. I have an MSCE+I in NT 4.0 that cost close to $20,000 to get and a solid year of my life and then it was obsolete the next month. I started to get a certification in SQL Server, finished one test, and they were already moving on to the next version and I decided to get off the merry-go-round. At the time I was working and attending UNR part-time and I thought I would put my degree on hold because it was going to take me so long to graduate since I was just taking 2 classes a semester. I thought I would be smart and take a fast track and get certified. I just did not realize that the certification path never ended. At least getting a college degree path ends eventually. What do they say, hindsight is 20/20. Actually, I can’t complain because I doubt I would have the job that I have today, if I did not get certified.

Do I get 10 points for BS'ing?