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Has Red Hat changed the software industry?

Red Hat claims to have changed the software industry. Has it?

Michael Chen, Red Hat's new vice president of Corporate Marketing, makes a bold statement on the Red Hat News blog today: "The way we do business has changed the software industry." I read those words and started thinking through their validity, reflecting on Red Hat's selection - four years running - as the #1 IT vendor for CIO value.

Looking around, it's not the case that the world has made a dramatic shift to open source. But we are seeing a subtle but significant shift away from proprietary models toward service-based models, whether open source or SaaS (where the underlying code remains proprietary). We are seeing an emphasis on transparency and openness that didn't exist five years ago.

Perhaps Red Hat has changed the software industry for the better. Chen writes:

So, our secret is no secret: Our software does what we say it will do, and as a company we do what we say we will do. Customers like that....

What sets us apart from our large competitors is the fact that we actually are what we seem to be, a company that brings a totally new way to develop, deploy and use software in the new century.

I think there's a great deal of truth to what Chen writes. It's fascinating to note, however, how few "open-source companies" have followed in Red Hat's shoes and given all of their software away as open source. I'm not talking about things like Red Hat Network which I would argue is a service that complements a core product. I'm wondering why so few have followed the most successful open-source company into the trenches and released all core product software - the software that customers run their own operations with - as open source.

Yes, Red Hat's market is different. An operating system arguably lends itself to the "distribution" model of open source better than it would most open-source projects. In other words, it may be easier to give away software when you're reasonably sure that having a certified binary is useful to customers.

But I'm not buying that argument. Not fully, anyway. My own company, Alfresco, releases 100% of its software under OSI-approved licenses (GPLv2) and has had dramatic growth every quarter. We're ahead of schedule to quadruple sales in 2007 over our excellent 2006 numbers. All while giving away the "crown jewels" for an enterprise application.

It turns out that there are far more benefits to maximizing abundance than there are downsides. Could we convert a few more leads if we forced customers to pay to get "the real value" in proprietary extensions. Maybe. But we also save sales and marketing costs associated with convincing customers of the value of such extensions by letting them try the software on their own terms, in their own time.

I'm not arguing that one model is better than the other (though I do believe that it's a better model for customers). I'm just wondering why the open-source world hasn't been more quick to follow Red Hat's lead with its model. We all seem to pick up on the need for a "network" offering, among other things. But opening up all the source code? That one seems to get lost in translation.