The Talk of ISPCON: Intel, Netscape Invest in Red Hat

Intel and Netscape Communications Corp.
showed their faith in the growth of the Linux operating system by
investing in Red Hat, a company that builds, maintains and provides
technical support for its branded version of the operating system.


The companies made the announcement during a panel discussion of Linux
and the open source code distribution model that has fostered its
development at ISPCON Fall ’98 on Tuesday. A growing number of ISPs have
been using the operating system because of its low cost and the amount
of control it offers through an open source code.


Linux inventor Linus Torvalds said, “I had a need that drove me to do
Linux, and I am not that special. So Linux really filled a void.”


ISPs, businesses and individual users seem to be turning to the software
as an alternative to Windows NT, the Mac OS and Unix, said Catherine
Heenan moderator of the panel and reporter with San Jose television
station KRON. The Linux movement has taken much of the industry by
surprise, she said.


“Sure it surprises me. It surprises me less than it used to,” Torvalds
said, because he has been watching Linux spread “from a couple of
long-hared hacker guys,” in 1991 when he developed it to millions of
users now. In the past few months, he said, it seems like the OS has
received an increasing amount of press, however.


Bob Young, president of Red Hat Software said the companies did not
reveal the amount of the investments because Red Hat is a privately held
firm, and the companies do not want comparisons with some of its
other investments and partners. “It was enough resources to do what we
want to do,” he said.


Venture capital firms Greylock and Benchmark Partners have also taken a
minority equity position in the company.


The Intel investment may seem surprising to some because of that
chip-maker’s close relationship with Microsoft, the dominant seller of
operating systems with Windows and NT. Sean Maloney, Intel vice
president of marketing and sales, said, while the headlines probably
sound exciting about Pentium chip maker Intel’s investment in an
alternative operating system, “the reality is probably a little more
boring than that. We want to get as much software as possible running on
Intel. It doesn’t affect support and development in NT.”


John Paul, senior vice president and general manager of the Server
Products Division of Netscape said, “It’s important that there is a
choice.” But the two biggest reasons that Netscape invested in Red Hat
and is interested in the Linux operating system is that it offers a free
distribution model, under which the source code is freely distributed
and improved upon by any programmers who are interested. Since
improvements are shared, and because the source code is available it
gives users a tremendous amount of control.


“The free part is a lot less important than the control part,” Paul
said.

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