The hat trick.

• Author: Gray, Tim
• Position: Red Hat Software Inc. - Cover Story

The media turned a tiny Triangle software distributor into a giant killer. What does Red Hat have under its cap?

A New York Times reporter flew down to Durham for an afternoon to find out what the buzz was about. Her story on Red Hat Software Inc. ran on the front of the business section in September. The Wall Street Journal sent a writer. His piece made the front page in December. The Washington Post wanted to know if the little company really was a Microsoft killer. USA Today directed readers to the software distributor in a story on how to get hold of a hot operating system for servers called Linux (rhymes with cynics). Even the New York Daily News, a tabloid more conversant with Donald Trump's dating woes than high technology, weighed in.

That's heady stuff, the kind of ink a public-relations specialist would kill for, especially for a company with only 100 employees and which didn't even rate coverage in a local daily until three months before the Times came calling. The Massachusetts flack brought in to manage the media blaze admits he did little to stoke it. "I wish I could claim that we created that great coverage," says Dave Close of Waltham-based Schwartz Communications Inc.

So who did? Credit crazy luck and Bill Gates. As the Microsoft Corp. antitrust case - and anti-Microsoft sentiment in general - was heating up, Red Hat provided the narrative the media needed. They found Microsoft's antithesis: a company that encouraged users to make free copies of its software so that programmers could change and improve the code. Gates would consider it heresy.

Microsoft's lawyers even tried to exploit Red Hat's sudden vogue at the trial. One held aloft a box of Red Hat Linux 5.2 and argued that the little Carolina company represented a legitimate threat to his client's dominance. A preposterous claim - "Maybe in 20 years," Young says - but the media loved it. Red Hat had slightly more than $10 million in sales last year; Microsoft, $14.5 billion.

With the national attention, the company's phones have been swamped with so many calls from prospective customers and employees that even the operator's line sometimes rings busy. Orders for Red Hat Linux have tripled. Spokeswoman Melissa London has gotten calls from brokers who insist the company is public - it's not - and want to know why they can't find its ticker symbol. "I had one guy tell me our symbol was RH and he'd read it in The Wall Street Journal."

In March, Compaq Computer Corp., IBM Corp., Novell Inc., Oracle Corp. and German software company SAP AG all took minority stakes in Red Hat, joining Intel Corp. and Netscape Communications Corp., which had invested in September. Growing sales and the security of knowing it had money in the bank enabled Red Hat to move into swanky new offices in February, trading 10,000 square feet and two small satellite offices for a 50,000-square-foot suite. It's so big, London says, that "very often one end of the building doesn't know what the other's doing." The company needs the space because it's adding 10 employees a month.

Young admits the cacophony of coverage helped open doors. "It gives us credibility if everyone's talking about Red Hat. People perceive us to be big and significant. They don't say, 'Red Hat who?' They know who we are." Give Young credit. He was ready when reporters came calling. "What's that Vince Lombardi saying? 'You make your own luck.'"

Give credit, too, to the Justice Department, particularly for the investment by software maker Netscape and the others. "Companies feel free to announce support for Linux because Microsoft...