Will Red Hat's OpenStack Contributions Turn To Gold?

It's happening again. Red Hat, which for years has dominated both the development and monetization of Linux, has turned its code contributing hand to OpenStack, the popular open-source cloud computing project. While Red Hat initially fought OpenStack, today it has become OpenStack's biggest contributor.

This bodes well for Red Hat. And for OpenStack.

Source Code Vs. Source Of Code

To understand why, it's important to understand how commercial open source works. In proprietary software, source code matters. A developer or company writes software, locks it up under a proprietary license and sells the right to use the software. Proprietary software licensing attempts to make digital goods sell like physical goods.

But in open source, being the source of the source code matters most. Since open-source developers essentially give away software for free, the key to monetization lies in being known as the source of the code, such that one becomes known as the best source of support, updates and add-on components for the software in question. 

Red Hat has turned this open source development and distribution strategy into more than $1 billion each year in support for Linux, a project that it heavily influences by contributing roughly double what any other vendor contributes, as the Linux Foundation's annual Linux development report states. It may not seem like much, but Red Hat's contribution rate of 11.9% gives it outsized influence with prospective Linux customers. No other vendor is better able to influence the inclusion of customer requirements in the Linux kernel.

Now the same thing seems to be happening in OpenStack.

Red Hat Gets Behind OpenStack

While OpenStack was once controlled almost exclusively by its founder, Rackspace, today Red Hat has taken the lead on contributions to OpenStack:

Source: OpenStack (Data compiled by Bitergia) Source: OpenStack (Data compiled by Bitergia)

Again, Red Hat's contributions double those of the next two largest contributors, Rackspace and IBM. Again, Red Hat's contributions put it in the pole position to profit from an open-source project.

Particularly OpenStack, which has been criticized as being long on community and short on actual deployments. 

Red Hat isn't particularly concerned with winning popularity contests. As a public company, it needs real customers paying real money for real OpenStack deployments. As such, it has released RDO, Red Hat's community distribution of OpenStack (similar to Red Hat's Fedora project for Linux), and this week Red Hat announced the availability of the Red Hat OpenStack Early Adopter Program, which provides early access to its enterprise-grade distribution of OpenStack, similar to Red Hat Enterprise Linux (RHEL).

It's not hard to imagine Red Hat's customer base extending their RHEL, JBoss, and Red Hat Enterprise Virtualization (RHEV) deployments to the cloud with Red Hat OpenStack.

Just What OpenStack Needed?

After all, this is the playbook Red Hat perfected with RHEL and has put to use selling middleware, virtualization, and now cloud. While Red Hat's involvement offers no guarantee of success, when Red Hat sticks to markets it knows - enterprise infrastructure - using a business model that fits - enterprise hardening of community code - its success rate is pretty impressive. With $35.5 billion at stake in the cloud market, according to recent Gartner projections, making OpenStack work is a big deal.

Since shifting into a true community project, OpenStack has steadily attracted new, active contributors, Red Hat chief among them. The next phase involves making OpenStack safe for the enterprise. Arguably no company has more success turning open source into a safe investment for CIOs than Red Hat. 

As such, Red Hat being number one in OpenStack contributions may go a long way toward making OpenStack number one with CIOs.

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