The redhat model is really an outgrowth of the open source consulting model. If you look at smaller companies there are hundreds of projects that have spawned c

The redhat model is really an outgrowth of the open source consulting model. If you look at smaller companies there are hundreds of projects that have spawned companies doing consulting, custom development and professional services. Red Hat is unique mostly because they have been able to grow to this massive size. Part of this was initial capitalisation, part of it was right time, right place and mostly the fact that they have been able to add value to end customers more then their competitors. XenSource had the problem of many other providers taking their output and repackaging it into a better product for customers (Amazon takes Xen, makes AWS. Other companies build their own virt products around it. If Xensource was the best virtualization platform and people had flocked for it, they would have been able to build a solid revenue from enterprise customers who required the guarantee of support for their mission critical workloads. Unfortunately there are lots of virtualization platforms around and I never found anything compelling in XenSource's Offering. VMware & HyperV have all the 3rd party support, oVirt / RHEV / OpenStack fill the cheap end. I accept that with what the market wants Open Source companies of the size of Red Hat are rare, mostly because investors want larger returns, however this doesn't mean a open source company can't be profitable and grow to this size, it will just be significantly slower. Companies in the space typically will have a slow but solid growth pattern when firing on all cylinders, Not the 'hockey stick' growth curve many investors are looking for.