Red Hat Linux is Mad Money

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Over the years, I’ve heard a lot of different people try and explain the economic proposition that open source and Linux offers. One of the best such explanations I’ve ever heard came on CNBC’s Mad Money show this week during which host Jim Cramer was interviewing Red Hat CEO Jim Whitehurst.

Before Cramer got roasted by The Daily Show’s John Stewart last year, I had been a fan of Mad Money. Cramer takes a hyped-up approach to investing and his show is more entertainment than it is financial education, usually.

With Red Hat, Cramer noted that it is a disruptive force and that’s what makes it attractive. His view is that in tech, disruptive forces are the most valuable types of companies.

With Open Source software in particular, Cramer stressed that it is a real route to profit – especially for Red Hat.

He clearly understood that Red Hat doesn’t sell software license, they sell the support and services around the software. Whitehurst explained that the Open Source business model is about providing the mission critical support and reliability that big companies need.