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The Red Hat business model, Part II

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Linux

I've written once on this topic before, but never with Red Hat's assistance. But yesterday I got to present the Red Hat subscription model with two members of Red Hat's legal team - the lovely Jennifer Venables and the ok-looking Rich Bynum (Just kidding, Rich! Smile - at Red Hat Summit. And all throughout the Summit I had open source entrepreneurs asking me for clarification on just how the model works.

Since I have a personal interest in seeing more companies move to a pureplay open source model, I'll try to dig a little deeper into the nuances of Red Hat's model. Listening to Jennifer and Rich speak, little subtleties became more apparent to me. I'll try to explicate them here.

First off, it's critical to remember that Red Hat's model works because it innovates. The model requires constant innovation. This is not good if you're trying to milk a product for monopoly rents ("Monopoly" here referring to the limited monopolies afforded through copyrights and patents).

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