by Matt Asay

Red Hat: Growing its influence through RHX and RHN

analysis
May 9, 20075 mins

First off, in today's executive press roundtable Matthew Szulik noted that Red Hat now signs up 10-15,000 new customers every 90 days. That's a shockingly large number, especially when you consider how many of its major customers it loses. In Q3, 24 of 25 major customers renewed...the one rebel being Oracle, oddly enough. :-) I was able to ask a few questions. Here they go: What happens in RHX when Red Hat start

First off, in today’s executive press roundtable Matthew Szulik noted that Red Hat now signs up 10-15,000 new customers every 90 days. That’s a shockingly large number, especially when you consider how many of its major customers it loses. In Q3, 24 of 25 major customers renewed…the one rebel being Oracle, oddly enough. 🙂

I was able to ask a few questions. Here they go:

What happens in RHX when Red Hat starts to expand its footprint in the open source ecosystem? Should RHX participants be worried about Red Hat building or buying its way into a competitive relationship with them?

Donald Fischer suggested that Red Hat is very comfortable with the concept of coopetition, and will host (and, in fact, already does host) competitive offerings to its own.

So, it’s very possible that Red Hat will acquire (or build) its way into a competitive relationship with its RHX partners. But Red Hat’s commitment is to play fair and to let customers decide on the technology they want. Different business applications – including those that compete in the same segment – offer different strengths. Red Hat is not looking to make RHX a monoculture.

RHN…

I asked what Red Hat plans to do with Red Hat Network now that it is on track to be open sourced. Every open source company has or needs a “Network,” and Red Hat has the basis for a Network story for each of these companies. To make this effective, however, Red Hat needs to collaborate with a community to ensure that the open source’d RHN fits the disparate needs of the vendor community (my needs as a Java-based business application are different from SugarCRM’s as a PHP-based business application, or MySQL’s as a database, etc.).

Still thinking here, but Red Hat, in fact, could seed the open source market with its technology to make a common platform for distributing and managing open source software. Who cares? Well, customers care, because management “just works” with Red Hat Network. Vendors care, because they get a relatively easy way to add value to their offerings (and allowing them to drop these hybrid models and go fully open source). And Red Hat should care because it makes it easier for it to integrate acquisitions into the company from a business model and a technical delivery level.

That’s my thinking. Red Hat’s actual answer was a bit more vague, out of both prudence (it’s a public company) and pragmatism (it’s not open sourced yet and will likely not be for many moons). But I got the feeling from the three who answered (Brian Stevens, Paul Cormier, and Tim Yeaton) that Red Hat is already working with its community of RHN customers to tweak and develop the system to meet an ever-widening body of requirements. So, from one angle, RHN is already positioned to accept community contributions.

My advice (unsolicited) to Red Hat would be to think of this move as much more than a way to remove the last vestige of prorietary software from its business, and to instead use it for strategic advantage to cement its role as the hub of the open source ecosystem. As it gets more and more open source ISVs wedded to Red Hat technology through RHX, expanding that relationship through the vendors’ “offline” relationship with Red Hat through RHN will be a great coup.

Ubuntu…

Brian Stevens acknowledged that Ubuntu has done many things well, but that (in his opinion) it hasn’t been an innovative force from a technological perspective. But one thing it has done really well is to push control to the users so that they can spin their distribution in a range of different ways.

Fedora is building into its distribution the ability to optimize distributions for personal niches, as Ubuntu has done. Fedora has been a big monolith of sorts – a “black box” (as Brian Proffitt suggested). Red Hat seems to recognize that while it may do the heavy lifting on technical innovation, it has plenty to learn from “usability and user-driven” innovation. In other words, Ubuntu’s innovation has been in how its developers and users interact with the system and skin it for personal use, and such innovation matters a great deal (and, to my way of thinking, perhaps as much as the technical innovation).

Red Hat has a massive opportunity in front of it. The question is whether it’s prepared to aggressively leverage its brand into a full open source ecosystem. RHX allows it to toe dip into multiple areas of enterprise software. But whether Red Hat will capitalize on its brand and its institutional understanding of how to sell and support software beyond the operating system and middleware is a big question.

It’s a question that may be answered in part by resources: Red Hat is the biggest open source vendor, but its resources are relatively limited compared to an Oracle or Microsoft. But I feel strongly that the company needs to be careful about being perniciously prudent about how it shepherds those resources.