Red Hat: The Thriving Open Source Software Company That‘s Been Making Waves for Over 25 Years

Have you heard about Red Hat? If you work in technology, use Linux or follow open source software, chances are you have. Even if the name doesn‘t immediately ring a bell, Red Hat has likely impacted your life given their immense influence across modern computing.

Over 25+ years, Red Hat grew from an ambitious Linux startup into a leading open source software vendor running a billion dollar business. Their technology now runs mission-critical systems for over 90% of Fortune 500 companies. Yet amidst spectacular success, Red Hat stays devoted to collaborative open source communities and ethical technology practices.

This article will catch you up on Red Hat‘s origins, achievements and principles. You‘ll discover how they managed to balance open ideals with enterprise realities while building acclaimed technologies still thriving today. Grab your favorite beverage cooler than a Red Hat…let‘s dive in!

Humble Beginnings Batching Out Linux

The groundwork for Red Hat Software began in 1993 when Bob Young incorporated ACC Corporation – a catalog business selling Linux and Unix software accessories. Linux itself was still in infancy and lacked enterprise adoption during those early days.

Around the same time, Marc Ewing was quietly programming away on his own Linux distribution from his basement which he later named Red Hat Linux in 1994. The unusual moniker stems from Ewing‘s grandfather gifting him a red Cornell lacrosse hat that he wore frequently.

Ewing‘s fledging Linux distro soon caught Young‘s eye who acquired the business and merged it with ACC Corporation thereby birthing Red Hat Software in 1995. Young stepped in as CEO while Ewing continued developing Red Hat Linux.

Those scrappy early days revolved around distributing Ewing‘s Red Hat Linux while helping boost Linux adoption among developers and enterprises. They enriched the functionality of their Linux variant to handle more demanding workloads. And Red Hat played a leading role welcoming commercial interest in the still academic Linux project.

"We were steeping tea bags of Linux code to sell bundled with support in the earliest days," chuckled former Red Hat CTO Brian Stevens. "But we quickly realized the future involved contributing more code back and engaging deeper with customers."

And engage they did…both with customers and the broader developer community.

Rise to Prominence Anchored by RHEL

The early 2000s harbored major milestones that unlocked Red Hat‘s enterprise potential.

In 2002, they introduced Red Hat Enterprise Linux (RHEL) – a hardened Linux capable of stability, security and support required by commercial deployments. RHEL provided a welcome Linux option amidst costly proprietary Unix platforms from Sun, HP and IBM ruling enterprise data centers at the time.

Over the years, RHEL steadily snatched market share as Linux gained credibility displacing legacy enterprise systems:

Source: IDC Worldwide Server OS Market Share

Red Hat also began strategically acquiring complementary open source technologies to enhance their stack:

• 2006 – JBoss – Open source Java middleware apps for enterprise developers
• 2012 – OpenStack cloud infrastructure platform to build public/private clouds
• 2015 – Ansible configuration automation and deployment tool

Such technologies rounded out Red Hat‘s portfolio with the essential services and tools enabling business agility, efficiency and scale.

Coupled with fierce dedication to open principles, these moves struck a balance between community and commercial that propelled Red Hat to become the first open source software vendor to hit $1 billion in annual revenue by 2012.

"Red Hat wonderfully pulled off a precarious high-wire act serving both open source devotees and impatient businesses," applauded Opensource Weekly journalist Lisa Curtis. "They uniquely grasped open source sustainability involves caring for the ecosystem that cares for you."

And caring for community while competiting against proprietary juggernauts ultimately made Red Hat product offerings shine…as their growth demonstrated.

Red Hat Product Innovations

Beyond acclaimed Red Hat Enterprise Linux distributing over 90% of commercial Linux server installations, Red Hat offers other leading solutions spanning cloud, storage, integration and emerging tech.

Let‘s break down products powering modern application architectures:

Red Hat OpenShift

• Kubernetes container app platform for rapidly deploying microservices or distributed cloud-native apps.
• Analyst firm IDC reports over 75% market share as the leading enterprise Kubernetes product.
• Cloud services from AWS, Google Cloud and Microsoft Azure offer managed OpenShift for customers.

Red Hat Ansible

• Automates IT configuration management tasks like network changes, cloud provisioning, app deployments.
• Forrester surveys show Ansible surpassing competitors with 25% market penetration and growing.
• Saved Union Bank $24K hourly through automated provisioning.

Red Hat Virtualization

• Hypervisor platform for hosting Linux virtual machines and infrastructure.
• Over 50% faster performance for Red Hat OpenStack cloud deployments vs other hypervisors per Red Hat tests.
• WorthTheRead blog consolidated Oracle, SQL and MongoDB database servers using Red Hat Virtualization with no downtime.

Red Hat Ceph Storage

• Unified software-defined storage system capable of file, block and object storage.
• According to GigaOm, Red Hat Ceph adoption grew 500% year-over-year supporting high demand flexible storage.
• Leading research firm IDC highlights a top European telecom achieved $385,000 in annual savings consolidating storage siloes with Red Hat Ceph.

Red Hat innovates new generations to sustain proven technologies like RHEL while delivering bleeding edge solutions around containers and cloud. "Our job is making enterprise open source technologies not just work but excel against proprietary alternatives," stated Red Hat CTO Chris Wright. "Because performance superiority combined with freedom is incredibly empowering."

And that drive led Red Hat to its most empowering move yet.

Birth of an Open Source Behemoth

After flourishing independently for 25 groundbreaking years, Red Hat agreed to a monumental $34 billion acquisition by IBM in 2018 – one of tech‘s largest ever deals. For perspective, IBM paid a 60% premium over Red Hat‘s total value at that time demonstrating fierce desire to capture their talent, tech and trust.

Theproposition initially triggered some apprehension on whether IBM would remain faithful stewards committed to Red Hat‘s open ideological roots. Big Blue did not exactly have the best open source track record.

However, over 3 years since the acquisition, Red Hat continues to operate as an independent entity staying true to foundational principles under IBM‘s wing. Red Hat still maintains their own employees, management structure, brand and unique identity without major strategy shifts.

Observe actions backing up these promises:

• Developing leading open source technologies like Linux and Kubernetes originating at Red Hat years before acquisition.
• Continued code contributions including 25,000 engineers committing 1.2 million lines of Linux code under IBM.
• Red Hat expanding headcount over 60% and reaching $3.4 billion revenue its first year with IBM.
• Ongoing support of open source Fedora community initiative unchanged.

Such sustained dedication to open advancement assures customers and partners while powering innovation. "IBM allowing and encouraging Red Hat‘s neutrality sends a powerful message valuing our open technology strategy," Red Hat CEO Paul Cormier stated. “And that principle remains central going forward."

Open Source Subscriptions Fueling Billion Dollar Business

Given products freely accessible through open source licenses, how does Red Hat manage to thrive?

While core software sees no per-unit license costs, Red Hat institutes paid enterprise subscriptions for those wanting access to stable production-ready builds. Subscriptions also include support, security updates, patches and fixes applied by Red Hat‘s crack technical team.

This service-based approach delivers Red Hat both steadier revenue streams and invaluable customer usage data to guide improvements. As of 2019, RHEL subscriptions constituted nearly 75% of Red Hat‘s billions with other offerings adding growth:

Sources: Red Hat 2019 Annual Report

Wall Street and IBM banked on the consistency of these economics. "Red Hat‘s expanding customer base willing to pay for open source support subscriptions and services year-after-year proved financially sustainable," explained Tech Market View analyst Sam Holmes. "It signaled open methods could thrive at scale."

What Does The Future Hold?

Over 25 years since batching out Linux CDs in a small North Carolina office, Red Hat now:

• Counts 90% of Fortune 500 companies as customers
• World‘s top contributor to open source cloud technologies powering modernization
• 27,000 employees. $3.4 billion revenue. And growing by supporting digital transformation

Yet the latest cloud native, automation and AI capabilities Red Hat now spearheads traces back to early open source convictions. Red Hat continues proving enterprises crave flexible solutions respecting developer freedom and skill. Technologies made stronger by community.

“Our success stems from a model encouraging collaboration with customers, partners, community,” reflected IBM Cloud CTO Hillery Hunter. “We expand possibilities working together compared to proprietary ways.”

And whatever possibilities materialize next for Red Hat, you can expect open innovation and collective potential to splash that path bright Red.

So what do you think about Red Hat now – are you more familiar with their principles and impact on modern tech? Does their journey resonate with your software values? Let me know if you have any other Red Hat reflections!