Why Making Money from Free Software Matters

Free software began as a political movement: its central aim was – and remains – the propagation of freedom. Later, it became a development methodology too, largely at the hands of Linus, whose geographical isolation in Finland forced him to develop ways of using the Internet to coordinate a new kind of massive, but decentralised, global collaboration. Later still, free software also became a way of making serious money – something that Stallman has repeatedly said he is quite happy with, contrary to much FUD claiming otherwise.

On The H Open.

The Real Story Behind Red (and White) Hat's Name

Computerworld has a short piece that has some background on Red Hat's unusual name. Bob Young is quoted as saying:

"When [Red Hat co-founder] Marc [Ewing] was at university he used to name his software projects red hat -- red hat one, red hat two -- just to differentiate them from his friends. So, of course, when he started his Linux project he just named it Red Hat Linux for lack of a better term," said Young, who left Red Hat in 2005 to focus his energies on another company he founded, online independent publishing marketplace Lulu.com.

Well, nearly right Bob. This is the real story, as told to me by Marc Ewing himself some years back:

In college I used to wear my grandfather's lacrosse hat, which was red and white striped. It was my favorite hat, and I lost it somewhere in Philadelphia in my last year. I named the company to memorialize the hat. Of course, Red and White Hat Software wasn't very catchy, so I took a little liberty.

So there you have it: the company should really be called Red and White Hat.

(B)looking Back

I wondered earlier whether blogified books were bloks or blooks, and the emerging view seems to be the latter, not least because there is now a Blooker Prize, analogous to the (Man)Booker Prize for dead-tree stuff.

I was delighted to find that the Blooker is run by Lulu.com, discussed recently by Vic Keegan in the Guardian. Lulu is essentially micro-publishing, or publishing on demand: you send your digital file, they send the physical book - as many or as few copies as you like. You can also create music CDs, video DVDs and music downloads in the same way; Lulu.com handles the business end of things, and takes a cut for its troubles.

Nonetheless, the prices are extremely reasonable - if you live in the US: as Vic points out, the postage costs for books, for example, tend to nullify the attractiveness of this approach for anyone elsewhere in the world, at least from a financial point of view. But I don't think that this will be a problem for long. For Lulu.com is the brainchild of Bob Young, the marketing brains behind Red Hat, still probably the best-known GNU/Linux distribution for corporates.

I emphasise the marketing side, since the technical brains behind the company was Marc Ewing, who also named the company. As he explained to me when I was writing Rebel Code:

In college I used to wear my grandfather's lacrosse hat, which was red and white striped. It was my favourite hat, and I lost it somewhere in Philadelphia in my last year. I named the company to memorialise the hat. Of course, Red and White Hat Software wasn't very catchy, so I took a little liberty.

Young, a Canadian by birth, was the perfect complement to the hacker Ewing. He is the consummate salesmen, constantly on the lookout for opportunities. His method is to get close to his customers, to let them tell him what he should be selling them. The end-result of this hands-on approach was that he found himself in the business of selling a free software product: GNU/Linux. It took him a while to understand this strange, topsy-turvy world he tumbled into, but being a shrewd chap, and a marketeer of genius, he managed it when he finally realised:

that the one unique benefit that was creating this enthusiasm [for GNU/Linux] was not that this stuff was better or faster or cheaper, although many would argue that it is all three of those things. The one unique benefit that the customer gets for the first time is control over the technology he's being asked to invest in.

Arguably it was this early understanding of what exactly he was selling - freedom - that helped him make Red Hat the first big commercial success story of the open source world: on 11 August 1999, the day of its IPO, Red Hat's share went from $14 to $52, valuing the company that sold something free at $3.5 billion.

It also made Young a billionaire or thereabouts. He later left Red Hat, but has not lost the knack for pursuing interesting ideas. Even if Lulu.com isn't much good for those of us on the wrong side of the Atlantic, it can only be a matter of time before Bob listens to us Brit users (to say nothing of everyone else in the world outside the US) and puts some infrastructure in place to handle international business too.