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Linux at the bat
Red Hat's Marc Ewing steps up to the plate against Microsoft in the billion-dollar free-software ballgame.

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By Andrew Leonard

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Oct. 4, 1999 | In December 1992, Marc Ewing graduated from Carnegie Mellon University and promptly founded a software company called Red Hat. In August 1999, Red Hat went public with spectacular success: As of late September, Red Hat's market capitalization was hovering around $6.5 billion. Not bad for a computer geek, even if such dormitory-halls-to-dumbfounding-riches stories seem commonplace in the late '90s.

But what makes Ewing's story all the more amazing is a little oddity about Red Hat that has turned the software industry upside down: Red Hat doesn't own its main product.

Red Hat sells distributions of the Linux-based operating system, a compendium of so-called free software that is protected by licenses requiring that the software's underlying source code be made freely available to all comers. Red Hat tweaks that software, burns it onto CD-ROMs, dresses it up nicely in slick packaging and offers various support services. But it doesn't own the software -- nobody does. If you want to get it yourself, you can download it free from the Red Hat Web site, or copy it from a friend. You can even copy it, change the name, and sell it yourself at whatever price you like.

No question, the Red Hat business model smells a little funny -- but so far Wall Street appears to be savoring the scent. In a summer marked by lackluster public offerings, Red Hat's blazed forth, setting a fine example for all the other fast-growing little companies that have homesteaded claims in the frenetic free-software gold rush. Everyone wants a piece of the Linux action -- but right now, Red Hat owns the No. 1 brand name in the business.

Shortly after Red Hat's emergence from its SEC-mandated "quiet period," Salon talked to Marc Ewing, now serving as Red Hat's chief technical officer, and asked him to let us know what it's like to be rocketing along the free-software roller coaster.

As of about five minutes ago, the Red Hat Wealth Monitor had your personal net worth pegged at $1,126,971,000. That's not too bad. [Note -- two weeks later, by the time this article was published, Ewing's worth had plummeted to a mere $800 million or so.]

That's wacky.

How did all of this get started?

When I started Red Hat I wasn't really meaning to do anything with Linux. I was working on a rapid application development program that was going to run on Unix, but I didn't have any money to buy a Unix workstation at the time -- they cost something like $10,000. Then I happened to run across Linux, which was brand new at the time, and would run on my home PC, so I used that instead.

Over the next few months and early summer I discovered that I wasn't spending any time working on my project, I was spending all my time fixing Linux and getting it updated and making it easier for me to use. I eventually came to the realization that what I really ought to do was work on putting together a better Linux distribution. So that's what I did. I dropped my other project and started doing what I had been doing as a business.

How did you hook up with Bob Young, Red Hat's CEO?

I was working on Red Hat for about a year and a half before I released my first product, Red Hat Linux, in the fall of '94. At the time, Bob had a catalog company that was basically a distribution company from which you could order Unix- and Linux-related products. He bought something like 300 to 350 of the 500 copies that I was going to print. Quickly, over the next few months, we merged the two companies. Bob wanted to be more than just a distributor of products, he wanted to really have a company. His strength is in marketing and sales, and he wanted a product that he could help shape the vision for. He ended up doing all the business stuff that I didn't want to do and allowing me to just concentrate on the technology aspects, so it was a pretty good fit.

So if someone had come up to you at that point and said five years from now your personal net worth will be a billion dollars, what would you have said?

Next page | From hacking on Linux in a spare bedroom to taking on Microsoft



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