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Red Hat chief calls for idealism, reform, sharing

What's wrong with the United States? It's too much like the New York Yankees, says CEO Matthew Szulik.

SAN FRANCISCO--It's time for the United States to begin an era of economic sharing that will reduce resentment of the country and could mean a larger computer technology market for everyone, Red Hat Chief Executive Matthew Szulik said Tuesday.

"The real challenge...is to make the pie bigger, to challenge convention...and not hold our piece of the pie captive," Szulik said during the opening keynote speech at LinuxWorld Conference and Expo here.

There have been cases before where putting selfishness aside led to broad, powerful benefits, he said, citing the Salk vaccine for polio and the Marshall Plan to boost the European economy after World War II.

Without that sharing, the United States will continue to spur "resentment" and "alienation" in other countries, he said, noting that China, India and Eastern Europe now have begun to channel their anger into technological and scientific competition that challenges the United States.

Szulik's optimism, however, comes amid financial challenges at the company that have caused its stock to decline. In July, Red Hat said it is restating earnings for the last three fiscal years, reflecting a move to record revenue from Linux support subscriptions on the day, rather than in the month, that a deal is signed. Red Hat also has received a Securities and Exchange Commission "comment letter" regarding the company's annual report. In June, CFO Kevin Thompson abruptly resigned.

Szulik refused to comment on these issues during a question and answer session after the speech.

He noted that in a one-hour meeting, Indian President A.P.J. Abdul Kalam told the Red Hat chief of his enthusiasm for boosting education in India with open-source software. But Szulik told attendees that he continues to struggle to get his own local schools even to learn how to pronounce Linux.

Szulik issued the exhortation during his LinuxWorld keynote speech. It was at least the third time his address to the forum has offered altruistic tones. In 2003, he exhorted open-source programmers to unite for their common good, and in 2001, he called for the use of Linux to boost education.

Sharing is an intrinsic component of the open-source programming philosophy, which requires that software be freely available for anyone to see, use, change and redistribute. Red Hat makes a profit by selling subscriptions to the Linux operating system and higher-level open-source software.

Szulik made only passing references to his company's products and was completely silent on its recent financial bruising. The Raleigh, N.C.-based company is profiting from tens of thousands of new subscriptions for its premium Linux product, but its stock price has plunged after an earnings restatement in June triggered by a more conservative revenue booking method.

As expected, Red Hat used the show to announce its application server software for running Java programs on a server. The product competes with application servers from JBoss, BEA Systems, IBM, Oracle, Sun Microsystems and others.

In addition, Red Hat also announced a partnership with , a company that sells services to help companies that have programming projects ensure that open-source and proprietary software don't intermingle. The companies will jointly offer training and services to minimize legal risks.

During his keynote, Szulik--an avowed Boston Red Sox fan--tried to illustrate to Americans how they're viewed abroad by drawing an analogy to the well-funded and dominant New York Yankees. "It's that organization with the really deep payroll, the deep pockets, the organization that is always winning and unwilling to share its wealth," he said.

Szulik also called for the reform of intellectual-property law in the United States.

Copyright holders should be required to disclose all copyrighted works in their entirety, he said. Those who want copyrights but don't want to reveal proprietary software should be able to get federal trade-secret protection, Szulik said.

And software patents also need more critical scrutiny, he said. "Do software patents really inspire and create innovation?"