The Case
Red Hat Inc. was a tiny software company miles away from Silicon Valley, in more ways than one. The Research Triangle Park, N.C.-based company develops and distributes the
Linux operating system, often called open source software because it is created by volunteer programmers and given away for free on the Internet. Red Hat makes its revenues off
service and maintenance fees for the system.
Prior to 1999, the media - not to mention corporate IT decision makers - perceived Linux as a weird and risky system created by anti-establishment programmers. Members of the
press characterized open source software as the software for "hackers and hobbyists."
Red Hat worked with Schwartz Communications to develop a media relations campaign that would change the reputation of open source software with business media and position Red
Hat and Linux as a smart, safe choice for corporate operating systems.
Wearing Many Hats
The campaign launched on Jan. 4, 1999 with a $180,000 budget and an aggressive model for reaching the media. The Schwartz team identified three key audiences: the technical
elite, including the Red Hat installed base and the open source community; CEOs and CIOs responsible for setting corporate IT strategy and making big-ticket purchase decisions;
and investors, including anyone who potentially would invest in Red Hat (assuming an IPO) or partner with the company.
To reach all these audiences, and to ensure that the press coverage thoroughly communicated that Linux was not desktop but server software, Schwartz pitched every level of the
media. The team worked with the business press, online press, print and broadcast media.
Schwartz also conducted frequent phone calls and email briefings with analysts from major high-tech consultancies to ensure that the press would have access to well-informed
and enthusiastic analysts for stories.
Hat Trick
Another key campaign strategy was to position Linux as an alternative to Microsoft. By comparing Red Hat's open source code to the software giant's own operating systems,
Schwartz was able to add clout to the Linux image and effectively explain to the media what Linux did. "For those [reporters] who did not have a clue what Linux was, certainly
everyone knew what Microsoft Windows was," says Peter Gorman, director of Schwartz Communications.
Plus, the comparison conveniently leveraged the fact that Microsoft's own corporate reputation had lost some of its luster. "So many people were frustrated with Microsoft
being the conglomerate," Gorman says.
The comparison did have its downside, however. Reporters were prone to positioning Linux as a competitor to the Windows desktop software (rather than Windows NT, the operating
system). Schwartz staffers emphasized that the product was server software in their pitches, and if mistakes were made, the team insisted on corrections.
Schwartz had one more trump card to play in its efforts to reverse Red Hat's underground image. Then-CEO Bob Young was a media dynamo. "Bob is a very outgoing, friendly guy,"
says Gorman. "A lot of the press really bonded with him. He's a story unto himself." The team put Young, now Red Hat chairman, in the spotlight as much as possible, endowing
the company with major leadership likability.
Hats Off
Mid-campaign, a hugely successful IPO tripled the value of Red Hat, due in part to Schwartz's efforts. The IPO also provided more fuel for the media blitz, which ended in
December.
All told, the media relations campaign generated more than 1 billion media impressions. Coverage peaked following the IPO, with more than 150 million impressions in August and
more than 193 million in September.
Red Hat's revenue more than doubled over the course of the campaign without a single dollar spent on advertising. Total print placements from April through December (Schwartz
did not begin measurement efforts until March) were at 5,500 and total broadcast placements for the same period were at 1,383.
Not only did the campaign put Red Hat and Linux in the limelight, but it built a whole new reputation for open source software. A Harris Interactive survey released in
November ranked Red Hat at No. 17 on its Top 40 Best Regarded Technology Companies, beating out companies like Yahoo!, Amazon.com and Apple. Red Hat was No. 10 on the Top 10 list
for Vision and Leadership.
And media coverage routinely referred to Red Hat as the leader among open source software companies.
Major Press Appearances in 1999 v. Press Appearances Since Red Hat's 1995 Founding
Wall Street Journal 101 v. 15
New York Times 19 v. 3
USA Today 29 v. 6
Business Week 18 v. 4
U.S. News and World Report 5 v. 1
Forbes 6 v. 2
Fortune 15 v. 0
Time 6 v. 1
Computerworld 74 v. 34
Information Week 68 v. 18
Schwartz
Peter Gorman
781/684-0770
Red Hat
Bob Young
919/547-0012
Schwartz Scoop
Headquarters: Waltham, Mass.
Founded: 1990
Gross billings ('99): $21 million
Staff: 235
Specialties: Computing, networking, software, Internet technology, medical
technology
Clients: 105, including Red Hat, Ventro, Enermetrix, Be Free, Checkfree
Unique Selling Points: Works only for entrepreneurial, smaller tech companies
or intrapreneurial divisions of larger companies. Business model provides large
teams, heavy emphasis on media placement. Has specialized in start-ups for 10
years.
Schwartz staff on the Red Hat account: 8
Best advice for pitching media
on high-tech stories: Treat reporters with respect. Bring them the right
story at the right time, with all the evidence available and easily accessible.
Most important: frame the story in a way that is relevant to the outlet's readers
-- which means you must have a good understanding of the show, publication or
site.