Dreamhost Driven by Linux-Enhanced Economics

Linux and FOSS (Free/Open Source software) are powerful and underrated economic engines. Ignore the whining of certain crybaby convicted monopolists about those unwashed viral FOSS hippies; FOSS is the rocket engine of high tech. It powers the Internet, Google, Amazon, a lot of commercial networking gear, most of this newfangled voice-over-IP stuff, and a host of other businesses.

Anyone with smarts and a work ethic can build a good FOSS-based business. To illustrate the importance of Linux and FOSS in creating opportunities for poor but ambitious geeks, I looked for a suitable Linux-based business to profile, and chose Dreamhost. My original intention was to profile a few of the excellent, independent hosting services I had grown up with, but they’re all gone now, swallowed by larger businesses that took away everything that made them special. (I have a special fondness for Web hosts, because “Freedom of the press is guaranteed only to those who own one.”) But Dreamhost has survived, and thrived, as one of the largest (if not the largest) independent, Linux-based Web hosting services.

From Dorm Room to All Grown Up

It’s also one of the oldest. It was founded in 1997 by Dallas Kashuba and Josh Jones, who were tender young college students at the time, and who still run the company. Linux and FOSS gave them an invaluable boost: good-quality server software for free. Their first server was a used PC running Debian Linux. Running servers on x86 hardware is commonplace now, but back then running “real” servers meant some flavor of expensive Unix on expensive hardware.

Linux Strengths

As young as Linux was in 1997, it had several major advantages over its elder Unix cousins. Its #1 advantage was cost (none.) #2 was the GNU toolchain. These are the excellent utilities that Linux users take for granted, such as the gcc compiler suite, binutils, the GNU build system, and the GNU debugger, but which are not distributed with Unix systems like HP-UX, Solaris, or AIX. Unix admins often hunt them down and install them and they work fine. In fact a lot of admins say the GNU tools are what make running the big commercial Unix systems bearable.

The other big advantage was Linux’s, and especially Debian’s, support of a multitude of hardware platforms, and especially the inexpensive x86 platform. Add Debian’s apt-get and young Dallas and Josh had a powerful, manageable platform to build a business on, with features that to this day are still not available in expensive commercial alternatives.

Linux and FOSS development are so fast and so diverse that a small company like Dreamhost can offer customers a wealth of advanced features without having to charge a mint. In the hyper-competitive world of Web hosting, every dime counts. In addition to the usual Web and email goodies, every customer gets a both a shell account and a graphical control panel. How, you ask, can users on a shared server get shell accounts? These days there are all manner of ways to manage this via various virtualization technologies. Dreamhost uses GRSecurity. Which is both Free software (GPL) and free of cost.

Managing a hosting service doesn’t have to cost a mint, either. Dreamhost doesn’t use any fancy commercial network monitoring tools, but relies on ordinary Linux utilities like ps and top, and bales of custom scripting, to keep an eye on network activities and to respond to problems. They also have one other potent tool in their arsenal, the most important one of all: skilled, experienced technical staff. The fanciest software in the world can’t substitute for skilled humans, so the Dreamhost overlords work hard to recruit and retain good people. I know, these days it’s weird to actually value people rather than viewing them as interchangeable, annoying line items, but it seems to be working for Dreamhost.

Linux’s stability and scalability also contribute directly to the bottom line. It doesn’t take many admins to herd a big flock of Linux servers, and Linux itself doesn’t require gobs of muscular hardware just to get out of its own way, so you can devote more hardware resources to doing useful work.

Linux Challenges

When Kashuba and Jones chose to build their business on Debian, they knew they wouldn’t get vendor support. They felt that the benefits of going with Debian outweighed the drawbacks; they were already familiar with it, and community support was usually good. But they were still more on their own than with a commercial product.

A big downside of going with Linux lies in using it as an NFS server. They tried using Linux-based NFS servers, including expensive commercial boxes. According to Kashuba:
“In our experience, one of the weakest aspects of Linux as it stands today is as an NFS server. We’ve tried using Linux-based NFS servers several times and it’s ended up biting us in the butt every time. I’m talking about commercial storage products that weren’t cheap ‘off the shelf’ boxes, too. That’s an area that I think could really use some work. We’d love to be able to build our own Linux-based enterprise level NFS attached storage and that’s just never been feasible for one reason or another.”


You’ve probably heard the term “software ecosystem” more times than you care to remember. But it’s an apt description of how FOSS works. It enables a company like Dreamhost to offer a large feature set at a low cost. Some of Dreamhost’s customers base their own businesses on Dreamhost. Other customers get to share their hobbies or publish their own Deep Thoughts. Web hosting review sites like Webhostingtalk.com and a host of imitators spring up like mushrooms after a rain. Then along comes someone like me who gets paid to write about it, and sometimes readers get inspired to try something new or contribute in some way, and on it goes.

All the big-time economists and financial news go all gaga over the giant globalcorps, as though they were the only ones that count, and the rest of us are mere fodder. But the more potent economic forces happen below their radar, in the all the millions of little businesses and sole proprietorships. Thanks to FOSS there is still a place in the modern world for the small-timer and the do-it-yourselfer.


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