Red Hat is a leading software company in the business of assembling open source components for the Linux operating system and related programs into a distribution package that can easily be ordered and implemented.
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Red Hat was one of the first companies to realize that "free" software could be sold as a product. After examining the successful marketing campaign of Evian water, Red Hat concluded that to achieve success, the company had to create more Linux users and brand Red Hat as the Linux name that customers preferred. Today, the "Red Hat Plan" is discussed as a model in business schools.
The advantages to buying the distribution from Red Hat, rather than assembling it yourself at no cost, is the support you receive. Red Hat offers services that aren't provided as quickly by individual component developers, including members of the Free Software Foundation. Like all free software, Red Hat's packages allow the buyer to modify and even resell modified versions of code as long as they do not restrict anyone else from further modification.