Why There Will Never Be Another Red Hat: The Economics of Open Source

Posted by mbaehrlxer on Feb 24, 2014 9:12 AM EDT
Andreessen Horowitz (a16z.com); By Peter Levine
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Red Hat, the Linux operating system company, pioneered the original open source business model. Red Hat gives away open source software for free but charges a support fee to those customers who rely on Red Hat for maintenance, support, and installation. As revenue began to roll into Red Hat, a race began among startups to develop an open source offering for each proprietary software counterpart and then wrap a Red Hat-style service offering around it. Red Hat is a fantastic company, and a pioneer in successfully commercializing open source. However, beyond Red Hat the effort has largely been a failure from a business standpoint.

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