Red Hat: Open source benefits from US unpopularity

Foreign countries do not want to pay US 'IP taxes,' Red Hat President/CEO Jim Whitehurst says

The unpopularity of the United States has IT users in foreign countries happy to use open-source software, Red Hat President/CEO Jim Whitehurst said at the Open Source Business Conference in the US.

This way, they do not have to pay "intellectual property taxes" to American companies, he said. Outside the United States, open source is seen from a public policy perspective as a fundamental good, Whitehurst said.

"I never thought I would say this but actually, being very unpopular in the world, as frankly the US is these days, is a huge benefit to open source," because people are resentful of sending billions of dollars back to the US in IP taxes, Whitehurst said. They also do not want to pay it to Western Europe, he said.

Whitehurst said he has met with government officials in countries like Russia and China. Moving to a model not shackled by US IP laws is extraordinary, he said.

But an audience member asked if Red Hat, when meeting with officials in countries not wanting to pay American companies, urges them to follow the GNU GPL (General Public License) and share code. "There is a ton of GPL violations going on," the audience member said.

Whitehurst responded he did not see some deep conspiracy over this issue but stressed the relative newness of the problem. "Absolutely it's an issue we need to watch and to manage," he said.

Whitehurst also discussed Red Hat's business model, which relies on subscriptions and support. "Fundamentally, our business model is to create enterprise editions of open source projects," he said. "We have created an enterprise version of Linux that you can sleep on [at] night knowing that it does not go down," he said. Open source also means having to work every day to keep customers happy, Whitehurst said.

More needs to be done to get enterprises involved in the open-source community, Whitehurst said. "We do a lousy job of getting enterprises involved in the community," he said.

Whitehurst said Red Hat has an 80-plus per cent share in Linux with a little more than US$500 million in revenues. "The dollars in open source relative to what we do are relatively small," he said.

Also at the conference Tuesday, officials from several open-source ventures, serving on a panel about the future of open source, contended that a turbulent economy was good for open source.

"I do think it's going to be good," said Roger Burkhardt, president and CEO of Ingres. "The question is when will the benefits come."

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