Default to open: The story of open source and Red Hat

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We've started working with Linux by 1992.
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--originally we wrote the code because we need it--
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--this idea of writing kernel really captured the imagination--
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--do really want to sell just another set of proprietary software to another set--
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--we're not going away. We not getting any less aggressive-- and a--
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We're open source company and we are not going to walk away from that
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just to make money.
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[in the BEGINNING]
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Opensource is not new. The whole software business effectively was not business.
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And in beginning it was selling hardware.
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And to run hardware you need some sort of software
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But nobody cared about software. No, nobody cared about licensing or selling software.
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That became later by standartization, commoditization of hardware
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where people could exchange software between machines.
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Now let's get back to this times. 1985, 1980.
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And there is smart hacker called Richard Stallman, rms.
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And he is-- at MIT, Massachusetts Institute of Technology
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in effectively he is working around MIT and he's a real hacker.
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The good old sense of hacker. At that time hacker was the guy who
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sneak into the office of the professor, hacking into his room.
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To get access to the terminal that was connected to the time sharing system.
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[Hey, look! Testpapers!]
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That where term hacker originally comes from.
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Richard Mattew Stallmann. He created the Free Software Foundation,
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the GNU General Public License, which nowadays rules a lot of free software out there.
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And effectively saying, you know, "I don't want software vendors
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to make a divide between users and developers.
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If I like software, I must be able to give it to anyone and share it."
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Richard Stallman was the youngest kid profiled
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in Steven Levy book. He was called little Richard Stallman by
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the elders of that AI lab
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Now Richard Stallman the great guru of Free Software movement.
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He was a mentor to me. So that shows you where I was on the
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you know, on the genealogy of this whole movement.
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It was-- that time on the late 80-s, early 90-s. Where if you wanted something
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you built it. And if wanted something really special, you shared it.
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The GPL caugth on especially in the late 80-s, early 90-s.
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Promulgated by the Free Software Foundation and in particular by Richard Stallman
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with help from Eben Moglen.
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Copyright tells you, you have the right restrict other from copying your work
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from modifying your work. From distributing your work,
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GPL says, "hey, we gonna give you the right to copy it, we gonna give you the right to modify it
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gonna give you the right to distribute it.
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And the only requirement we've got, if you do distribute it,
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you ahve to do it under the same license agreement.
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And that's way we ensure that the same benefit that you derived out of GPL license software
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you're extending to other-- other parties.
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I first ran into a-- the GPL which is a license, the GNU Public License
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in the late eighties actually, in England.
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And-- it kind of stricker caught (dimly) in me.
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But I didn't get a chance to actually do opensource code fulltime
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until after I came to the US.
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And the first job where I was doing really open source and getting paid for it
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was when I joined Cygnus, which is Michael Tiemann's company that you guy ended up buying.
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I actually remember that were quite astir when Richard Stallman announced project GNU. And the GPL.
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I remember people debating whether it was good idea or bad idea.
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Whether it could possibly work or not possibly work.
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And I remember there this thing going on
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and I learned about GNU Emacs editor and I was astounded at the idea that something so
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reach and featureful could be available with source code.
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And I actually started reading the source code of Emacs.
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I was always interested in compilers.
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I exceled at the kind of math, at the kind of study that was related to compilers
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and I began to form in my mind the idea that I was going to write The Great American Compiler.
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And on my birthday, in 1987, Richard Stallman releases the GNU C Compiler.
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I could have seen that as glass been shattered. Not even half-empty but just
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all the water gone out. Or I could at that as glass completely full.
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Here is a world class pace of software that I could contribute to
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And I didn't need to worry about working for a company or licensing it.
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and that was a first time I really began to feel that not only is this a lot of fun
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but the amount of value that could be unlocked by free software, was amazing.
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This is the innovation of Michael Tiemann that he realized-- he read the GPL which is a
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a very strange document if you first read it.
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it's basically the software license going at about evil software holders and stuff.
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And Mike Tiemann's genius was realizing, "This is a business model!"
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And that really was the innovation that can found a Cygnus and ultimately ran in, I think.
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Nobody wants start the business because while they all thought it was a great idea
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they thought, it will never work.
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And after hearing that for two years, that's when I had my crucial insight
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If everybody thought it was great idea then I was convinced
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that the capitallists succeed to find a way to evaluate it.
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And if everybody thought it will work, I realize I've had no competition.
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By default everything was proprietary
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so, you know, if you wanted to do open source work professionally,
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Cygnus was the literally the only company that was.
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There was no, you know, it wasn't like you could do open source work and work for anybody else.
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The goal of the company was to prove that this business model was as good as any model
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that had ever been imagined for software. Not just in terms of profitability but just overall sustainability.
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[enter LINUS TORVALDS]
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One of the things that made this whole free software thing work
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is that it was not dependent on the single individual.
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When Linus Torvalds sent out his message, his famous message about,
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"Hey, I'm working on an operating system. It's not gonna be professional like GNU--"
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Obviously this idea of building a kernel really captured the imagination. And his timing was perfect.
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And he wanted to call it "freax", f-r-e-a-x.
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So he created directory called freax and he wanted to upload source code there.
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And the system administrator of that ftp service said, "This is a stupid name.
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This is really complete bullets, so lets rename it. You're Linus, lets call it Linux.
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That's how the name Linux was invented.
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Which leads me to the three fundamental theories of the whole IT industry.
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It all happened by accident. It was done by amateurs. And nothing really change.
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[BOB meets MARC]
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In early 1995, I've got a call from one of my friends who was still working at Sun Microsystems
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And he told me that there is a little company in North Carolina
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that was doing some really amazing stuff
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And at the time they maybe had dozen, fifteen people.
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But they had done something really new with free software.
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I could sense there is something interesting.
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And so I brought my two co-founders together and I said, "You know what?
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I think we have to do an acquisition.
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I think we should take ten percent of our equity and buy them."
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And I did not make the sale.
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Five years later they took ten percent of their equity and bought us.
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In some ways being acquired by Red Hat was a redemption
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because people at Red Hat were believers.
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When I met Bob Young, I knew
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that Bob seen same vision I had.
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Bob had the good fortune to build envision
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around a Linux distribution which has
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major scalable benefits over something like a compiler toolchain.
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I was a big skeptic when I first ran into Linux
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91-92, as a big skeptic. I didn't think it go anyway.
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It was filling a void while you waiting for real operating system to show up
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on the new 486 machines.
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But there are no more (dimly) sales guy.
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And I looked after customers one customer at a time
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What I could see in this Linux that I have something to sell.
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Bit if I found the right customer he could not get
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from anyone else on the planet no bounder how big were. (dimly)
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Marc working out his spare bedroom down here in North Carolina over in dorm.
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Was doing a Linux distribution which he named after his missing
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grandfather's lacrosse cap. In fact in this the very first version of his first release.
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In the opening of the manual he told the story of this
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red lacrosse cap he used to wore between classes.
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And he says, "If you in the Philadelphia area and you find my lacrosse cap,
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it'd be grateful if you'd return it to me."
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By the way to this day I believe that's the only bug Red Hat's not be able to track down.
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We go back and forth and say on (dimly)
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Marc-- couple of my customers says your distributions better then
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other people's, and so, you know
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I'm selling a thousand copies a month of various Linux distributions
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I should be able to sell hundreds of yours
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So send me three month supply and send me three hundreds copies
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Dead silence at the end of the phone.
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So we finally get out of Marc that he was only thinking of printing 300 copies
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And I knew how little I was paying him for this copies.
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So we realized we have match made in heaven.
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I needed a product and he needed some marketing help.
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So we ended up merging our little businesses, my ACC Corp. with his sole proprietorship
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[We actually have done a pad of first purchase order of yours too]
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Holy cow! That's unbelievable!
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That's actually my handwriting.
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[Is it?]\nIt's my handwriting.
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[So it's certif (dimly)]
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It is certif I can vouch! There is no question.
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We sort of even somewhat nervous about to being able to qualify for office space
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Were'd a landlord who has office space rented to a company
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who had no money in the bank and whose business was selling free software.
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And we just looked down and go
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"Ooh, you know, I'm not sure I want fill out that application"
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There are very few companies that ever started
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been properly funded from the start that were ever successful.
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Because the concept of a startup is
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is you very much focused what you spent money onto
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until insure you get value from it, becomes part of your culture when you have no money.
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My first encounter with Red Hat was one of the little city of North Carolina
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There was two small rooms, we has a meet
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Can a walk through meter (dimly)
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The second time on my back it was good deal, bigger.
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They got running out of space, they got more space.
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But they still had pretty much. I--
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I first (dimly) the tech culture preannounced that crash (dimly)
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There is things like I budget from 'nuff guns and shooting the managers sitting on blindage. (dimly)
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[an OPEN BUSINESS MODEL]
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So fast we are on the spring of 98.
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I'm now sitting on the business that in tells the partner with
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Some of the top VCs in Silicon Valley want a partner with
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I think I might need some help with this.
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We had a smart team but we did not have a lot of senior industry experience.
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No, let me revise that. We did not have any serious industry experience.
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Which is actually part of our secret.
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Because we have no industry experience we didn't fall into bad habits of the industry.
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It is precisely what allowed us to rethink how the industry should work.
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From talking to Bill Kaiser at Greylock, who is still on the Red Hat board and
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who deserves a huge amount of a respect for his contribution to the Red Hat success over the last ten years.
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"Bill, we need some help. We need some high level help. I don't want a higher VP sales.
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I wanna bring in the guy who might scaled to be a CEO of this thing.
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Who do you know in North Carolina?"
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He says, "What so look complicated because he is gainfully employed
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as the president of the software company that has intentions of going public.
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So I don't (dimly) any interest in talking to-- but I can always make the introduction
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'cause maybe he knows something. No course he's Metthew Szulik. (dimly)
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And my line was, "Hey, Mett, do you really want to sell just another set of proprietary software
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to another set of faceless corporate buyers?
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Or do you wanna come and help us actually reinvent the software industry and materially improve
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how our society functions by empowering engineers to do the right thing with software and gain true transparency?
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Look at a brand this company has on the global basis.
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And the industry, our industries just starting around open source software.
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We continue wanna make information accessible to other people.
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It's very emotional to think that every day people-- more, more people buy into that vision
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of creating and defining company of the 21st century.
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And Matthew very much was the right guy for Red Hat
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[going PUBLIC]
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In some sense Red Hat really hit the lottery with the IPO.
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And one of the things happened with that IPO, that's it really did
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Catapulted Red Hat into a position where we had brand equity.
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That was far beyond anything that either a revenues justified
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or really what we could of ever imagined.
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It was still very much on the peak of dotcom era and we're able to go public at evaluation
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that just dwarf (dimly) the size of our company at the time
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And it was pretty exciting moment. There is no question.
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We came back to Red Hat after being up in New York and doing a road show
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And, you know, being in Goldman Sachs' office when it starts to trade-in.
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You know, we were (dimly) $14 and it ended up the first day $44.
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Everyone was all excited and I go, "Well, I guess it's better than going out with 14 and ending up at $10."
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[the SUBSCRIPTION MODEL]
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When Red Hat was created the whole business around Linux was just starting.
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So people were building distributions and sharing them or trying to sell them and etc.
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And Red Hat went to a mode that I would call the heroine face. We're sort of drug dealers.
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[That's right kid, first teen bucks. You sort of hold me for a while.]
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Every six month you get a fresh shot of Linux. You know, nice new box, nice new logo, new manual, new CDs.
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All wonderful. You know, we created a lot of articles. And journalist reporting about it
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because a revenue model was quite simple: sell boxes.
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Matt usually keep talking to us about, "We gotta get away from box product."
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And we (dimly) gone, "That's the only place where we make any money right now!"
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That was hard to understand what he was telling us at that time.
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You know, in retrospective is like, "Oh, year! That made a lot of sense."
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At that time, no so much.
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The problem started to creeping (dimly) from the beginning.
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People that run professional systems, business critical systems will not update the systems every six months.
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What we did with Red Hat Enterprise Linux from 2002 is saying, "You're customer, you not buying boxes anymore.
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What you now buy is to right to use a software whatever version that we produce during
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run time of your subscription which in one or three years."
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We retired our most successful product.
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We retired Red Hat Linux.
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There were lots of other ideas thrown around on how to do the subscription model.
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Everything from "should we have proprietary installer" to "should we have the whole thing proprietary."
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One of the things that we kept coming back to in that process is
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We an open source company and we not going to walk away from that just to make money.
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But because we did it, the free software line we able to keep community
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We just thinking some other companies stumbled on it because they did stuff like source code jam
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They didn't have community distribution in parallel.
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We're the first ones to go on to that subscription model.
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Every other software company on the planet would love to be on the subscription model.
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Now we have the advantage we're starting with the clean sheet of paper because we didn't have any revenue back then.
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The benefit of the subscription model is you start spreading the receive of the money
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in the recognition of the revenue that you received
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over period of time you actually maintaining that software.
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We knew the risks we were taking. We absolutely better firm
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on doing that and getting in to the enterprise market.
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By retiring Red Hat Linux, spawning RHEL
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Then fedora continuing to give the community and the open source world
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that completely free operating system that they wanted and that actually drove everything we did.
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While at the same time having a vehicle like RHEL that we needed to make money to continue to fuel the company on.
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If we didn't do RHEL, the company wouldn't be here right now.
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If we didn't do fedora, the company wouldn't be here right now.
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So one important thing that we had to do while we move from a box product company to an enterprise software company
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is really rethink how do we go to market from a legal paper perspective.
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There is thousand different license agreements out there
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but what we were doing was not creating software license agreement.
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We have the General Public License that was our software license agreement.
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And we have to create a recurring revenue model agreement for software.
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And that have never been done before. We didn't have any models to follow.
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One of the really important things that's we knew we had to do to have credibility
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with enterprise customers that we wanted to serve.
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Was to have applications from independent software vendors certified, ported to Red Hat Enterprise Linux.
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And certified to run on Red Hat Enterprise Linux.
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So we had to create a desire in those ISVs to self-certify on our platform.
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And we also had to create a program that companies will be interested and participated in
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in order to self-certify.
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[a growing COMPANY]
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Really from the day one when I joined the company I tried to build a global business.
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Not just separate countries and separate regions but people communicating, working together.
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I started with Europe, building European operations.
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European operations was there, in Germany
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in France and in UK
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that's it. We started operations in Benelux countries, Scandinavia
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We started in Eastern Bloc, or former Eastern Bloc countries
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We really cover now the entire European business
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And it's grew substantially
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Asia Pacific what the next. And our primarily business very beginning in Japan
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So we expanded then Asia Pacific business to China, to Korea, to India
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We expanded our Australian business and entered Asian countries
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Now we really covered the entire Asia Pacific
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About three years ago we acquired our partner in Latin America
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And this business in Latin America grew rather dramatically
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fantastic team and business grew in thousands of percents
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Fill from the smaller base, but we really becoming a true global company
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Which is good thing to see.
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[Welcome to the New York Stock Exchange. There is a real buzz and excitement around here this morning.]
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[Because we have the privilege to welcoming to family of listed companies.]
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[Red Hat, the world leading open source and Linux provider.]
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This is a great day for Red Hat to be listed on New York Stock Exchange.
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It's kind of an honor. And it's where biggest establish companies are.
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I think customers and competitors and partners saw that
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and said, "Whoa, this guys. This guys are for real and they've arrived."
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[JBOSS and QUMRANET]
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You know, there are two acquisitions that I think were also inflexion points for the company.
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JBOSS in the first one.
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If we gonna grow platform we really needed world-class runtime environment,
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we really need world-class development environment on top of that.
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So that was the impedance for us to go out and bring JBOSS.
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And they built a great community, they built a great brand, they built a great set of products.
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And we felt that on the combination of that with the operation system would be killer.
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You know, what we tried to do is either joined, you know, successful projects.
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We be a steward of new projects to try to point, you know, the open source model at
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new areas enterprise need.
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So application space was a natural to be able to--
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there is latec happen if (dimly) wide collaboration around Java development platform.
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A really talented bunch in Israel started the KVM project.
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and we watched that very intently and what we saw was, what we felt was
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an architecturally superior next generation virtualization.
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We really saw a next generation loadable module into the kernel that can
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here it all the goodness of the operating system
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as opposed to the separate layer and separate operating system.
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[the FUTURE OF OPEN SOURCE]
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Open source is moved from being the domain of a few techies and a few early adopters
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to truly being ubiquitous.
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Gartner today says that the majority of enterprise products will include open source components.
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Now, as we move forwards I certainly expect that in software we continue move up the stack
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in broad now into other categories.
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You know, if you look at cloud, clouds will be open source, clouds will run open source.
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So we're here at the fundamental tipping point where computing will be
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forever changed by the power of open source.
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Opensource.com is the key initiative inside Red Hat. And I think we've proven the power
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of participation in software at with open source.
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What I wanna do is take those learnings and make sure we can apply it to other areas of human endeavor.
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Be those academic research, be that health care,
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be that government and participation government, be that legal system.
22:38 - 22:42

There is so many opportunities where knowledge building upon knowledge can be valuable.
22:42 - 22:46

Basically what we finding is that if you look at open source way
22:46 - 22:50

as a way of thinking about approaching problems, a way of solving problems.
22:50 - 22:54

A way of dealing with the world around you in a different way.
22:54 - 22:58

Did you gonna apply open source way and all of its assets.
22:58 - 23:03

And what you will get is a result that's different than if approach it more traditional way.
23:03 - 23:08

It's everywhere, I mean look at growth of open source inside, you know, some of the
23:08 - 23:12

you know, more risk aversive environments that the federal government.
23:12 - 23:19

Open source use, the Red Hat business inside the US federal government is blossoming.
23:19 - 23:24

Now it's really around, less around open source and more about solutions that open sources is built.
23:24 - 23:28

So we find on the open source technology is that so many eyes on the code.
23:28 - 23:32

It's a collaborative community that we found very robust.
23:32 - 23:34

A quite stable and a quite secure.
23:35 - 23:41

Well, like any code there may be vulnerabilities but they're discovered fast and they're patch fast.
23:41 - 23:47

So that mean in my vulnerability testing the open source technologies always fare very well.
23:47 - 23:52

And at last we have the trust of the patient. It's really hard to share data.
23:52 - 23:58

So I find open source and the resulting security is foundational to health care technology.
23:58 - 24:03

The few disturbed to your data and you decide who should see what when and what context.
24:04 - 24:08

It's patient center. It's protecting privacy and confidentiality.
24:08 - 24:10

That's really the way health care should run.
24:10 - 24:17

This whole concept of sharing of-- participatory democracy if you would
24:17 - 24:20

that's embodied the open source software
24:20 - 24:25

has started to have a impact on other aspects of our lives.
24:25 - 24:29

So other issue is the Creative Commons which started into sharing content.
24:29 - 24:32

So free culture refers to
24:32 - 24:35

a balance of
24:36 - 24:37

encouragement
24:37 - 24:38

and freedom
24:39 - 24:41

for people over their own culture.
24:41 - 24:44

There are protections like copyright necessary
24:44 - 24:46

in what I thinks is of a free culture
24:46 - 24:49

but they are limited and balanced
24:49 - 24:52

to make sure that they do nothing more that give the incentive they need
24:52 - 24:56

to creators to create and leave the rest of culture as free as possible.
24:56 - 25:00

This three big things, open source, open standards, and open content.
25:00 - 25:04

And they together form the fundament for the new society that we seeing nowadays everywhere.
25:04 - 25:07

The community values of free software is incredibly important.
25:07 - 25:10

And the ability to make things happen all over the world.
25:11 - 25:14

There are many organizations and non-profits in India who believe that
25:14 - 25:19

the usage of open source is absolutely essential, you know, Braille digital device
25:19 - 25:21

Take computing to the masses.
25:21 - 25:25

And, you know, democracy use of technology in a continuous (dimly).
25:25 - 25:29

So there are organizations which are trying to promote the usage of open source software in education.
25:29 - 25:34

We have close to 250 million children who need to be educated.
25:34 - 25:40

Now if you want proprietary software on, you know, the computers that you give to this children
25:40 - 25:43

The cost of education becomes exorbitant.
25:43 - 25:46

If you look at this One Laptop per Child
25:46 - 25:51

Or universities in second and kind of better third world countries
25:52 - 25:56

always often can't afford really thought to use software, really afford to use software and buy software.
25:56 - 26:00

Of course we care about software. We care about
26:00 - 26:03

the world in which we live as well. We care about everything.
26:03 - 26:06

If you get ... will to drive some good changes
26:06 - 26:09

you know it's not just as small localized this.
26:09 - 26:11

But it has a phenomenal effect on a lot of people.
26:11 - 26:15

Open source as a methodology, as a culture
26:15 - 26:18

it really permiates (dimly) everything that we do here at Red Hat.
26:18 - 26:20

It is very important to me to be a part of something.
26:20 - 26:23

Not only building an institution but something that really matters.
26:23 - 26:27

And matter to not just our shareholders but more broadly to the communities world.
26:27 - 26:29

And Red Hat fits that mission.
26:29 - 26:31

We truly have the mission to change the world.

Title:: Default to open: The story of open source and Red Hat
Description:: Red Hat Films is proud to unveil this documentary looking at the past, present, and future of Red Hat and the evolution of open source.

Take a look back at the beginnings of open source, and its growth through the 80s and 90s. Meet the people involved, and understand how Red Hat got started, went public, and changed the technology industry along the way.

Experience this story from some of the people that helped craft it, including DeLisa Alexander, Jeremy Allison, Paul Cormier, Alan Cox, John Halamka, Venky Hariharan, Lawrence Lessig, Alex Pinchev, Brian Stevens, Michael Tiemann, Mark Webbink, Jim Whitehurst, Jan Wildeboer, and Bob Young.

See what the early days were like, and what they think the future might hold for open technology and the software business.

more » « less
Video Language:: English
Duration:: 27:02

i-rinat added a translation

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i-rinat

Default to open: The story of open source and Red Hat

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