Red Hat was founded by entrepreneur Marc Ewing, and in 1995 merged with Canadian Bob Young's company ACC Corporation. Young then took the role as CEO of the company, until succeeded by Matthew Szulik in 1999.
Open source lies at the foundation of their business model. It represents a fundamental shift in how software is created. The code that makes up the software is available to anyone. Developers who use the software may freely improve the software. Even competitors like Microsoft admit that the result is rapid innovation (compare the Halloween documents).
Red Hat solutions combine Red Hat Linux, developer and Embedded Technologies, training, management services and technical support. Red Hat optionally delivers this open source innovation to their customers via an Internet platform called Red Hat Network.
On August 11, 1999, the company completed its Initial Public Offering of six million shares of common stock at a price of $14/share on the US NASDAQ. Its stock ticker is RHAT. On November 15, 1999, Red Hat announced its merger with Cygnus Solutions, a leading open source vendor. Consequently, Red Hat now develops Cygwin. Other acquisitions have followed, notably ArsDigita, Sistina.
The bulk of Red Hat`s revenue comes from corporations paying yearly support subscriptions for a stable version called Red Hat Enterprise Linux.
For home use, Red Hat released Red Hat Linux 9, a version upgrade for Red Hat Linux 8. Red Hat has announced that they will drop support for Red Hat Linux on April 30, 2004. The current consumer distribution of Red Hat Linux will be replaced by Fedora Linux, a community supported Linux distribution, sponsored by Red Hat, and derived from the original Red Hat Linux distribution.