10 years after Red Hat got serious on enterprise Linux, the company is re-organised for enterprise cloud.
The Linux distro last week scraped up its Linux, virtualisation, OpenStack and cloud management businesses into a new infrastructure-as-a-service (IaaS) unit.
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Also created in the shuffle was an applications platform group responsible for JBoss and OpenShift. The existing storage and big data units continue as before.
The purpose of the reorganisation?
To drive “consistent strategy and story to customers” of a cause Red Hat calls the “hybrid cloud” according to the new infrastructure unit’s chief, Tim Yeaton.
The idea is to sharpen Red Hat’s focus on cloud and to make hybrid cloud easier for customers to comprehend and – hopefully for Red Hat – buy.
Yeaton told us after his appointment he will drive strategy, integration and messaging for the cloud across all its Linux, virtualization and cloud software products.
The last time Red Hat got really, really serious on something was in 2003, and that was when it decided to go all-out on the enterprise - bulletproofing its server Linux and charging companies subscriptions for support. Before that, Red Hat was just another Linux distro loving the desktop which charged the hapless and the hopeless for telephone support - not something that was really scalable.
Beards are the business
10 years on, Red Hat Linux subscriptions have turned Red Hat into a $10bn market-cap company while revenue is running at $1.4bn.
If one thing has helped persuade cynics and entrepreneurs that Linux could be a serious business, it has been Red Hat’s success.
Now Red Hat is looking to the cloud to drive its next decade of growth.
Only this time, in sharpening its focus Red Hat will be helping the very piece of software that it’s betting on for success: OpenStack.
Red Hat wants to leverage the cloud to further its ambitions as a technology provider – just as Microsoft is trying to ensure its future, too.
Red Hat’s shtick is something called an “open” cloud – that is, a cloud without the proprietary or closed APIs used by the likes of Microsoft or Amazon.
Your apps and your data can be taken out or you can build your own.
The foundation is Red Hat Linux and OpenStack. But only one of these is doing well and making tonnes of money. Guess which?
Red Hat revenue grew 15 per cent year on year to $397m in its latest quarter. Compare that to fellow enterprise IT providers like SAP and IBM struggling to eke out two to three per cent software licence growth.
It wasn’t always thus: Red Hat has started making Linux in 1993 but it wasn’t until 2003 that Red Hat got serious and focused on the enterprise – under products and technologies president Paul Cormier - who introduced paid subscriptions.
Red Hat succeeded to such an extent that it pulled Microsoft to heel: enough Windows Server shops were running RHEL by 2005 that Microsoft was forced to support RHEL as a managed guest in its Windows virtual server.
Developers aren't 'focused' on it
OpenStack sprung out of a similar passion, just as Red Hat Linux had done, but unlike RHEL, OpenStack seems to be struggling.
It was supposed to be the Linux for the cloud - open code and license for a project build using a community methodology. But three years on and despite much hype and some success - PayPal runs on OpenStack – OpenStack is failing to break into the enterprise, as Gartner notes here.
Gartner blamed OpenStack vendors' love of technology and failure to relate to the customer.
But the technology is in trouble, too. The project has attracted members across the board with thousands of developers, but they aren't focusing their efforts. The result is an OpenStack with elements lacking crucial stability found in clouds from Microsoft and Amazon.
Yeaton concedes that OpenStack has adoption problems, only he positions it more diplomatically. He sees lots of, er, “pilots” ramping up. “You hear this a lot with our field executives looking at 2014 planning,” Yeaton told The Reg.
Red Hat will continue to its participation in OpenStack. “We will make the platform bullet proof,” he promised.
So Red Hat will increase its focus on OpenStack to the betterment of OpenStack but how does Red Hat help OpenStack into enterprises?
Yeaton reckoned he will put “more resource in the field” to work with customers as they get started on OpenStack. “We are creating teams to help customers define architectures and build out that fabric,” he said.
This isn’t a consulting practice, rather a “cross function set of experts.”
Yeaton will drive product strategy, messaging and devise “solutions” around RHEL, virtualisation, OpenStack and cloud.
Bring on the suits
Red Hat's man was vague on what this would mean in terms of cross-pollination between products, as he was just days into the job. He did say, though: “As a group we will defining the integration and evolutionary paths that lets customers build workloads that move fluidly across architectures.”
Yeaton also pointed to his first tour of duty at Red Hat between 2005 and 2007 - he left to become CEO at open-source licence specialist Black Duck and has now joined Red Hat fresh from that firm.
Between 2005 and 2007, Yeaton was senior vice president of worldwide marketing and general manager of enterprise solutions. Yeaton said: “I spent time on product roadmap - that’s my passion.”
“Solutions” and enterprise selling is something Red Hat has been working on for RHEL and JBoss under CEO Jim Whitehurst, a former Delta Airlines chief operating officer, as it tries to become more like IBM.
There is a risk cloud could hurt the RHEL cash cow, though.
The logical conclusion of cloud is that by turning off your servers through consolidation or outsourcing, you no longer require operating systems.
That would suggest a threat to RHEL. It seams dangerous, meanwhile, to have moved the RHEL cash engine into a group wedded to an idea that’s still relatively new (cloud) and a philosophy (the open cloud) that’s an unproven theory.
It’s the closed clouds of Amazon, VMware and Salesforce that dominate, with Microsoft pushing hard its own particular brand of non-portability with Azure.
Yeaton insisted RHEL hasn’t been downgraded at Red Hat, rather RHEL will be critical in taking the cloud fight to VMware but particularly Microsoft.
“Linux is still the centrepiece of the company, it is core still to the business,” Yeaton said. “OpenStack will leverage RHEL.”
Rather, RHEL is critical to taking on Microsoft in the cloud.
Customers are still rolling out their own data centres but they are experimenting with cloud and bursting where needed.
The strategy is: sell them the operating system platform now, and cloud down the line once they are ready to move. The idea is the apps and infrastructure don’t need to be re-written and customers can re-use their existing Red Hat skills and infrastructure.
“Our goal is to become the open-source driver for end-to-end systems, from bare metal to public cloud,” Yeaton said.
“The one who comes closest to replicating that is Microsoft because the operating system is so elemental... We need to have a strong proposition in the operating system.”
“When you talk to those building cloud infrastructure behind the firewall, the thing they had to think about was how our middleware didn’t easily replicate in the public cloud. We want to make that much more seamless – to move workloads in and out to Amazon Web Services and private cloud infrastructure and have mission-critical support."
He reckons working with the new applications platform group, under senior vice president Craig Muzilla, formerly vice president of the now non-existent middleware business unit. Applications is responsible for developers working on JBoss and OpenShift - Red Hat's Platform as a Service (PaaS).
Of course, neither the open-cloud idea nor the fact Red Hat has re-organised around OpenStack are guaranteed to work just because Red Hat was successful in its first round of selling and supporting Linux.
Red Hat has tried to reposition itself before, to diversify out of being "just" a Linux company with the purchase of JBoss for its middleware in 2006. Relatively little came of this, and the lion's share of Red Hat's business still comes from Red Hat subscriptions with the company still considered first and foremost a Linux distro company rather than a diversified software operation along the lines of, say, an IBM.
The problem was Red Hat's foundations as a Linux distro company.
This time, Red Hat will be hoping Yeaton can bring something different: an outsider's experience. Yeaton chatted to El Reg about his time after Red Hat at Black Duck, which he joined in 2009.
Black Duck became part of the application development chain, helping enterprises manage the open-source modules that their devs were sucking in and using in mission-critical apps. Black Duck helps manage software licences and built up a practice specialising in licensing of open-source software.
What did Yeaton learn? How to think beyond the operating system, to take into account other elements of the software stack customers want.
Interestingly, it was Red Hat - an investor in Black Duck - who approached Yeaton to come back as infrastructure chief.
“The one area I learned a tonne about at Black Duck but didn’t have at Red Hat was how big companies think about leveraging open-source components, above where Red Hat has products - not just to leverage the ISV, but to enabled the large custom development teams in customers.
"I had great ISV enablement experience [at Red Hat] but not in helping customers consume open-source components at scale,” Yeaton said.
Ultimately, success depends on two factors: if the open-cloud theory works and if OpenStack stabilises. If it all works out, Red Hat could reinvent its way to another billion dollars. ®