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The company that got a $ 2 billion business with free software

The company that got a $ 2 billion business with free software

The company that got a $ 2 billion business with free software

If you have ever wondered if it is possible to make money with free software, the most valuable company in the sector shows you that it is.

Free software starts from a simple premise: anyone should be able to copy, study and distribute the program and its source code, without having to ask anyone for explanations.

At the time Richard Stallman, the main supporter of free movement, I compared it to cooking recipes; You may want to copy an omelette recipe and improve it, or simply make tortillas every day until you are done, there should be nothing to stop you.

Free software = giving away the money?

The greatest criticism of this philosophy has always been that, if we give it all away, we cannot obtain any kind of economic benefit; therefore traditionally free software has been considered as something unproductive, as a very nice idea but that has no real implications in the market.

But time has shown that you can do business with free software, and also very juicy. On the one hand we have the fact that the vast majority of Internet companies today use, in one way or another, free software. This page that you are visiting? Created with free software. Google? With free software. the mobile you are using? You probably have a good portion of free software.

But that is the business of those who use free software, can you really make money creating free software, dedicating resources and time to write code that will be given to the first person that passes?

The company that shows that it is possible to earn money with free software

The Red Hat example is the best example that you can earn a lot of money creating free software; to the point that Red Hat has just become the first open-source company valued at more than $ 2 billion.

Not bad at all, considering thatIt has doubled in value in just four years; in 2012 Red Hat was the first open-source company to exceed $ 1 billion.

We know this after the company’s financial data for the last quarter of 2015, in which got an income of 544 million dollars, exceeding analyst expectations by $ 10 million and rising 21% over the previous year.

How did you do it? Red Hat has its own Linux distribution, considered one of the best, if not the best, for professional and production environments. Red Hat Enterprise Linux is well known in the community for its stability, its security and the development of its own software in conjunction with the community.

Red Hat Enterprise Linux is born Fedora, a desktop distro that is more geared towards the average user. We can get it on its official page and it is considered one of the great alternatives to Ubuntu today. With Red Hat Enterprise Linux and Fedora, Red Hat has invested heavily in free software development.

The subscription model, the safety net for companies

Now, if you search Red Hat Linux in any search engine, you will discover that the official page asks you to pay a subscription to download and use the distro (although you can download a free evaluation version). How is that possible?

Although we are talking about free software, there is nothing stopping us from selling a Linux distro; in fact, precisely because we are talking about free software, there is that freedom.

Technically Red Hat does not sell its distro, but what it sells is a subscription, thanks to which we will receive full technical support from Linux experts and quality assurance, that the software integrated into the operating system follows the highest standards of security and stability.

The data also reveals that 88% of Red Hat’s revenue comes from this subscription model, which has been a great success among companies that need advanced and professional support. Making the move to Linux without a network can be dangerous, and many companies rely on this subscription model to get the proper support.

Red Hat shows us that it is possible to succeed financially with free software. It is true that its business model is not for everyone, and that not all the companies that follow it have the same success, but at least we know that it is possible to achieve it.