Red Hat took its name from a red Cornell lacrosse cap that co-founder Marc Ewing wore, a cap that belonged to his grandfather. The company sold Linux, an operating system anyone could download for free. Its customers paid for a tested version, manuals, and someone to call when things broke. When Red Hat filed to go public in June 1999, Linux was the rebel of the server room and Microsoft ruled the desktop.

A Cap and a Catalog

Ewing packaged Linux in North Carolina. Bob Young ran a business that sold Linux and Unix software by catalog. Young bought Ewing's company in 1995 and the two built Red Hat together. The code was open, so any rival could copy it. Red Hat bet that companies would pay for a brand they trusted, plus updates, training, and support. It sold boxed copies of Red Hat Linux in stores and signed service deals with businesses that ran Linux on their servers.

Shares for the Hackers

Red Hat priced its IPO at $14 a share on August 10, 1999. The next day the stock closed near $52, one of the biggest first-day gains Wall Street had seen. The company set aside shares for the open-source programmers whose work it sold, so some of them could buy in at the offer price. Red Hat survived the dot-com crash and became the first open-source company to pass $1 billion in yearly revenue. IBM bought it for $34 billion in July 2019.

Cover: Portrait of a Man in a Red Cap, German. Art Institute of Chicago, public domain. Chosen for a man in a red cap (the red hat).