Bare the wealth

A Linux programmer builds a "wealth monitor" that tracks Red Hat's valuation and who's getting rich off free software.


Andrew Leonard
August 26, 1999 8:00PM (UTC)

Bill Gates has his Wealth Clock. Now Red Hat, one of the world's leading vendors of the Linux-based operating system, has its own Wealth Monitor. On Wednesday, Red Hat, which had just over $10 million in revenue in 1998, was worth just a hop, skip and a jump under $5 billion.

Since going public, Red Hat has "transcended everyone" in the rest of the Linux world, says Red Hat Wealth Monitor creator Kendall Clark. "They have gone on to a higher level."

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Therefore, Red Hat deserves close scrutiny -- in this case, the kind of monitoring that updates itself every 15 minutes during the NASDAQ trading day. It's not just that Clark, who describes himself as "kind of a leftist," is suspicious of capitalism in general -- "I'm not happy with the stock market as an American institution," he says. More important is the reality that Red Hat has built its success on the backs of thousands of individual contributors who did their programming for free.

"Here we had something where money wasn't the chief motivating factor," says Clark, founder of the North Texas Linux Users Group and author of a how-to document on creating user groups. "But now everyone wants validation from Wall Street. Maybe we should have been happy with the validation we got from universities and the technical community."

Clark's Wealth Monitor points out some glaring disparities. By his reckoning, the Linux development "community" -- which Clark roughly reckons to number around 6,000 people -- is responsible for about 500 of the 573 megabytes that constitute the standard Red Hat distribution. Pro-rating those figures against Red Hat's current market capitalization would mean that each contributor ought to be valued at about $867,000. On Wednesday, the company's founders were worth upwards of $600 million each, while shares set aside for developers were valued at just under $60 million.

Clark doesn't intend to cast blame on Red Hat -- he doesn't see the company in the same big-business league as Microsoft. And he acknowledges that Red Hat made a valiant effort to include developers in its initial public offering. But he hopes that Red Hat will take some of its newfound millions and plow them directly back into the developer community -- after all, he notes, there's something odd about the fact that Landmark Communications CEO Frank Batten, a major Red Hat investor, is now suddenly "the richest man in free software."

"I am not especially critical of Red Hat," says Clark. "But the question is not whether Wall Street will corrupt Red Hat -- of course [it] will. It's a question of how much Wall Street will corrupt them, and in what direction, and whether it's acceptable to the community."

Even if Red Hat is irredeemably corrupted, Clark is not particularly worried. He says one of the reasons he became interested in Linux was because it excited him that "the technical part of life can have a moral dimension." For him, sharing source code, programming for the public benefit, is a good thing to do, period. A free operating system, he notes, is "great for nonprofit groups -- there's no economic barrier to having a hard-core, big-boy, bad-ass server. That's as good as things get in the computer world in my opinion."

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"If Linux wasn't on the cover of every technical magazine, would that be such a terrible thing?" Clark asks. "If it doesn't knock off Microsoft, would that be such a bad thing?"

"Sure, it would be cool" to knock the Redmond, Wash., giant off its perch, adds Clark. "But most people will continue doing what they have already been doing. The sort of core Linux user, the power user in computer science departments all over the world, will keep on doing what they've always done."


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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