Red Hat Rubs Its Billion-Dollar Year In Bill Gates' Face

Business Insider

Dear Bill Gates and Gartner analysts: it's time to eat crow.

These folks predicted that Linux was overhyped and would never make serious money. 

Now that Red Hat has officially posted more than a billion dollars in revenue, ($1.13 billion to be exact), the company's PR department sent us this funny list of quotes predicting doom.

  • "Linux is the hype du jour." Gartner, 1999.
  • "We think of Linux as a competitor in the student and hobbyist market but I really don't think in the commercial market we'll see it in any significant way." Bill Gates, 2001.
  • Indeed, I would go so far as to say that very few open source startups will ever get anywhere near to $1 billion. Not because they are incompetent, or because open source will ‘fail’ in any sense. But because the economics of open source software – and therefore the business dynamics – are so different from those of traditional software that it simply won’t be possible in most markets.” – Glyn Moody, “Why No Billion-Dollar Open Source Companies?," 2010. (To be fair: Moody goes on to say that Red Hat "stands a chance" because it has targeted a big market, enterprise IT infrastructure.)

Linux has become a powerhouse technology in the data center and for embedded devices.

"The collective investment in Linux is $10 billion - freely available to you," according to Jim Zemlin, Executive Director of the Linux Foundation:

Linux is used to power everything from ATMs to TV, from cell phones to servers. Android is based on Linux. Facebook and Google were both built on Linux and most of the Fortune 500 use it in in their data centers today. Linux also runs one-third of the world's websites, according to W3Techs.com.

Countless for-profit software companies based on open source software exist today. This has even created a subset of companies like Black Duck Software and OpenLogic to sell independent support contracts.

While Red Hat is now the first (and only) $1 billion open source company, companies like IBM and Oracle also sell Linux-based products and services.

For Red Hat, revenge is sweet.

UPDATED: Glyn Moody was less harsh on Red Hat's billion-dollar prospects than the original quote made him out to be. We have corrected that.



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