"Their open source offerings are loss leaders intended to stimulate enterprise sales. Mission critical systems get built on the open source software, and then managers can elect to buy enterprise features and support from the vendors."
It's even simpler than that. They give away the source and simply sell the support contracts, to both big and small customers (Red Hat does quite a bit of small-mid business sales).
But, to go even smaller than Red Hat, there _is_ value to open sourcing your "crown jewels", and making it up in other ways.
Wordpress and Digium (Asterisk VOIP developer) are two off the top of the head that profit very well from their completely open-source core competencies. MySQL did so well they were bought by Sun (now Oracle) for US$1 Billion, and Trolltech makes about US$30 Million for Nokia marketing Qt toolkit for embedded, which is a niche of a niche.
There are others out there that are sustaining a business based solely on open source software, such as Jaspersoft and SugarCRM. Hell, Motorola just bought that company that makes Cappuccino just yesterday, so there has to be some value to it, for sure.
It's even simpler than that. They give away the source and simply sell the support contracts, to both big and small customers (Red Hat does quite a bit of small-mid business sales).
But, to go even smaller than Red Hat, there _is_ value to open sourcing your "crown jewels", and making it up in other ways.
Wordpress and Digium (Asterisk VOIP developer) are two off the top of the head that profit very well from their completely open-source core competencies. MySQL did so well they were bought by Sun (now Oracle) for US$1 Billion, and Trolltech makes about US$30 Million for Nokia marketing Qt toolkit for embedded, which is a niche of a niche.
There are others out there that are sustaining a business based solely on open source software, such as Jaspersoft and SugarCRM. Hell, Motorola just bought that company that makes Cappuccino just yesterday, so there has to be some value to it, for sure.