“”"But then someone turned around and took everything in RHE that wasn’t Red Hat corporation proprietary (which is some, like the install routines, but not much) and packaged for nothing.”"”

Yes. The full source code of Redhat’s operating system is fully downloadable from their FTP websites. Several other companies and organizations have downloaded that source code and built up a bug-for-bug clone of Redhat Enterprise Linux.

Two big examples of this are:
* CentOS Linux – this is a for-free downloadable and fully ‘community supported’ (meaning the people that use it will support other people using it) distribution. They charge nothing for this and only accept donations necessary for maintaining the servers and occasionally getting people together.
* Unbreakable Linux – This is a direct competitor to Redhat setup by Oracle corporation. They offer the same thing, basically, but charge less and offer ‘enterprise level’ support.

Yet despite this Redhat continues to make more money then ever. In the period since the last post Redhat has actually purchased several companies that produced proprietary ‘closed source’ software (software that is designed to take advantage of copyright law for profitability) and has actually turned around and open sourced their software. They continue to work closely with Oracle, in a successful manner and despite being direct competitors in the OS market, to improve Redhat Linux with such things as a new BTRFS file system.

Why does Redhat continue to make money when people can freely use Redhat clones?

Because when they pay Redhat money they are not paying them for a copyright license, they are paying Redhat for the expertise and industry support that Redhat has built up over the years by being a major developer of the operating system they sell. No other corporation, other then Microsoft, is able to offer the same sort of complete ‘bottom to top’ support that Redhat offers. Also Redhat has gained the certification and independent software vendor (ISVs) support from many other corporations.

When you run ‘enterprise level’ software your business depends on the support and quality of software that is offered by other corporations. Those ISV corporations, in turn, only support specific configurations in order to keep their own costs down. You can usually run whatever software on whatever OS you want, but if you want to have official support from the developers they will usually expect that your running Redhat.

Thus by taking advantage of open source software and working to provide a stable and supportable version of Linux Redhat is able to leverage their expertise, support services, and ISV associations to maintain profitability.

By working and freely associating with other corporations with as minimal restrictions as possible they have been able to produce a modern, competitive, operating system at a fraction of the cost and difficulty that their copyright-leveraging competitors do.

Nobody can argue logically about the overwhelming success companies like Microsoft enjoy due to the restrictions of copyright law over the property of others, but it’s also certain that Redhat and other OSS software have achieved widespread success and is able to be a real competitor at a with much better efficiency and vastly reduced cost.

What is one of the major limitations of OSS continued success?

Why patents, of course.

OSS was able to create a freely distributable version of Unix (called FreeBSD, OpenBSD, NetBSD) and Unix Clone (Linux) due to the fact that the copyright law is restricted to derivative works. These operating systems exist simply because they purged all copyrighted Unix code (or in the case of GNU and Linux, rewrote it from scratch) from themselves and thus threw off the shackles of government+corporation oppression.

However due to the fact that software patents are no respecter of original thought or independent works major corporations are increasingly using patents to limit the competitiveness of OSS. Sometimes intentionally, sometimes not.

There now exists a entire industry (commonly referred to as patent trolls) that exist as nothing more then as leeches on the patent system. They produce no software and offer no services. They are usually front corporations formed by a group of lawyers that purchase the ‘IP’ remnants of failed proprietary software corporations and then use the patents from the failed company as a mechanism to extract payments from software corporations that actually do produce products. Since the patent trolls produce no products or services it is impossible for them to violate patents. Thus they are immune to the attacks they inflict on other corporations.

They also work with the Universities, too. Which is why you will see little objection to ‘IP’ in academia. (which generally produces no products and services they provide are mostly immune from software patents).

One famous case is Eolas suing Microsoft for the use of the Web Browser Plugin mechanism. Eolas played the part of a small software company that Microsoft used it’s monopoly power to suppress their business and ruin them and thus were using patents to get what was justifiably theirs. In reality University of California ‘sold’ their patent to Eolas and in turn Eolas was to extract licensing fees from corporations and send the profits back to UC.

This was ‘technology’ developed in 1993, patented in 1998 and used against Microsoft in 2004. Eolas continues to threaten, harass, and sue corporations to this day.
http://www.eolas.com/eti-10-09-release.html

This is the legacy of ‘IP’. Companies that produce nothing are immune from the rules they use to attack and sue other corporations and massive inefficiencies due to copyright.

Oh yeah, you’re wrong. Sure can. Or rather, they can _try_. For instance, Red Hat Enterprise Edition as David C. mentions above.

But then someone turned around and took everything in RHE that wasn’t Red Hat corporation proprietary (which is some, like the install routines, but not much) and packaged for nothing.

There are several embedded systems houses that are taking the basic Linux kernel code, stripping out what they don’t use, even adding bits and pieces, and selling it. What they cannot do is lie about it and claim it as their own. They don’t.

http://www.gnu.org/licenses/gpl.html

Rest of agreement doesn’t seem to allow for modification and sale, retaining full rights to the modified source.

Copyrights are not like regular property rights that have natural limits in supply and demand. People need to stop looking at copyrights like a free market property right, and need to start looking at it like a government microregulation on how people use information.

Ironically, there’s a similar problem with GPL – you can’t modify and sell stuff that’s licensed under the GPL (hundreds of programs) – effectively forcing out all produce-for-profit entrepreneurs who would add functionality and brand an existing public domain codebase. That’s a “copyright” of sorts which tends to play into MSFT’s hands.

http://www.captaincopyright.ca/