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Red Hat hits 10-year, $1bn Enterprise Linux birthday

How a Unix killer crawled from the dot-com bust

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Making a Linux distribution is easy, and lots of people have done it and continue to do it. All you have to do is get the source code and integrate the pieces you like and slap your logo on it.

Making a commercial Linux distribution that makes enough money to cultivate innovation and stability in the kernel is not so easy, however. Very few companies have done it, but Red Hat is one of them – and its Red Hat Enterprise Linux (RHEL) marks its 10th birthday today.

RHEL, the commercial-grade operating system that the then young Red Hat created in the wake of going public on the dot-com boom, was not Linux for grown-ups. That's what the Fedora, OpenSUSE, Ubuntu, Debian, Gentoo and other development communities are for. No, RHEL was Linux for children.

By "children" I mean it was for corporations of the world that just want to install an operating system, plunk some apps on it, and manage it like they do other platforms – and be able to forget that it is even there because it just works.

RHEL emerged from the craze for Linux company IPOs that went hand-in-hand with the dot-com bubble of the late 1990s and early 2000s. Red Hat went public in August 1999 and Linux was on fire with Red Hat, as the first big Linux distro offering commercial support, the hottest.

Red Hat had lined up partnerships with Compaq, IBM, Oracle, Computer Associates, and others in the systems racket after Linux was enthusiastically embraced years earlier by academics and the supercomputing labs.

Making the Unix Wars irrelevant

Linux, being open source and out of anyone's control, made the Unix Wars irrelevant - some would say childish - and the world still wanted the promise of open systems (which was only partly accomplished). And it got open source to boot. Linux quickly became the system that ran on all iron – whether server makers or PC makers like it or not.

Red Hat Software was founded through the merger of Bob Young's ACC Linux, a software utility supplier for Linux and Unix tools founded in 1993, and Red Hat Linux, a popular Linux distro created by Marc Ewing, the original Shadowman (the nickname for the Red Hat logo) who roamed the halls at Carnegie Mellon University.

This was not a company you would have guessed would be valued at $19.7bn by Wall Street in the December following its initial public offering. But there was a reason why a company that only generated $10.8m in its fiscal 1999 year ended in February just exploded when it went public later that year.

After Red Hat came crashing back down to earth, and Wall Street with it, what was left was a company that was a credible threat to the Unix, Windows, and proprietary system incumbents that had an army of enthusiastic, idealistic, and sharp open-source coders who were not so much interested in getting rich as they were in being right and to have their peers concede that they were. (Well, that is what a meritocracy is, at least when it is working properly.) And you might not have guessed, at that time, that Red Hat would be the first company founded on open-source software to break through $1bn in annual sales and have $1.3bn in the bank.

Too bleeding edge

And it almost didn't happen. Matthew Szulik, Red Hat's president and chief operating officer and eventually chief executive to Young as chairman, led Red Hat to the IPO and through it, but the bleeding edge nature of the original Red Hat Linux was an anathema to a company trying to establish a commercial operating system business that was stable and safe in the eyes of the corporations that would shell out cash for that support.

The idea was to make Linux as good and familiar as Unix, which garnered the lion's share of system sales during the dot-com boom era (a little less than half of all systems sales worldwide were driven by Unix).

So in 2001, Szulik hired some expert techies with deep backgrounds at Digital Equipment Corp: Paul Cormier, who became executive vice president of engineering and is now president of products, and Brian Stevens, who was brought in to manage the Linux distro and who is now CTO at the company.

Among many other things that they have done, Cormier was part of the AltaVista search engine team – the thing we all used and loved before Google came along – and Stevens was one of the key developers for the X windowing system and Kerberos security and the architect in charge of Tru64 Unix at DEC. What they wanted to do was tame Red Hat Linux and turn it into Enterprise Linux.

"I don't think the general person really understands what this meant from 10 plus years ago," Cormier told El Reg, in an interview marking this month's 10th anniversary of RHEL.

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