The center is slated to become Red Hat's second-largest engineering facility, after the company's lead development center outside Boston. It will be located in a building close to the Informatics Faculty of Masaryk University, with which the company plans a close collaboration.

"We've always had a lot of engineers working for us remotely there," he said. "So, when we looked to expand, it wasn't just about finding great engineers. It was about finding great engineers who are already part of the [Linux] community."

Red Hat's business revolves around providing implementation and support for its variant of the Linux operating system, Red Hat Enterprise.

Unlike its closed and overwhelmingly dominant competitor, Microsoft Windows, Linux is an open-source system, meaning that its source code — the complex language of conditional statements that runs all computer software — is freely distributed across the Internet for criticism and improvement.

Traditionally, companies like Microsoft keep their source code secret, as it is seen as the lifeblood of the company's business.

But advocates of open-source software say that the closed nature of this development stifles innovation and allows code to grow flabby around the sides as it ages. Instead, software must be set free.

"When you have a user who can install software for free, that's cool, but that's not what the open-source community has in mind when they say free," said Douglas Arellanes, an open-source developer based in Prague.

Rather, it means "the freedom to go in and tinker with [source code] and adapt it for specific means, the one requirement being that when you make these changes, you share it with others."

At its new facility, Red Hat will hire programmers to improve Linux, with the requirement that all of their breakthroughs, even though they are funded by Red Hat, be made freely available to the rest of the Linux community, including competitors.

To make a profit, then, Red Hat must beat its competitors on the support it provides its clients, including blue chips like Amazon.com, Morgan Stanley and Goodyear, which use Linux to power a variety of computer systems, from print and file servers to financial trading and telecom back ends.

"Red Hat has proven that Linux can be used and adopted very successfully in the commercial market," Cormier said. "That's going to open the floodgates. You're going to see more open source [moving] to more areas."

A recent study for the European Union on the economics of open-source software seconds this conclusion. Firms like Red Hat have invested an estimated 1.2 billion euros ($1.6 billion/33.3 billion Kč) in development, it says, and the existing base of open-source software now available is the sum of a collective 131,000 years of mostly unpaid effort from programmers across the world.

In six case studies made of organizations that migrated to open-source software, the report concludes, in almost all cases the cost of migrating to this software netted long-term savings over the ownership costs of traditional software.

Linux, which has had the reputation of being difficult for average computer users to install and maintain, has made marked gains in usability in the past few years, Arellanes said.

"It's made the leap in functionality and user friendliness to match or better Windows," he said. "And they're making great gains on the supposed leader in user experience, Mac OS X."

Brno rising

Linux is divided into 1,200 packages, discrete divisions of the operating system that govern, for example, language capabilities or graphics displays. Linux engineers tend to specialize in particular packages, Cormier said, and so it is important for Red Hat to find engineers in even obscure specialties.

Central Europe, along with Scandinavia, provides a disproportionate number of these engineers, confirmed the recent EU study.

And, if they can't be found, they can be trained.

Red Hat chose to invest in Brno because of the robust computer science programs at Masaryk University and the Brno Institute of Technology, said Cormier.

The Informatics Faculty of Masaryk University in particular has been a hotbed of open-source development since its founding in 1994. It was the first faculty in the Czech Republic devoted to informatics, said Jiří Zlatuška, dean of the faculty and former rector of the university.

Red Hat approached Zlatuška a year and a half ago, and talks have proceeded from there. Masaryk students are expected to provide Red Hat with a steady flow of interns and, after graduation, trained professionals.

In return, Red Hat developers will be accessible mentors and teachers to the students, and their presence will aid the creation of the university's new master's degree in open-source development.

"Brno as a city aims to be an innovation center," Zlatuška said, speaking from his position as city councilor. "We aim to be a center of modern technology and want to bring more technology companies here. We'll be competitive on a European scale."

"Brno is trying to re-create the conditions that led to the creation of Silicon Valley, [through] private-public partnerships and monetizing research coming out of the universities," Arellanes said, much like is done at Stanford or Berkeley, Silicon Valley's feeders. "It is becoming a high-tech center."

Red Hat's investment follows a year when the Czech Republic had success in attracting research-oriented investment from the United States.