Less than 40 days ago, Jim Whitehurst stepped into the role of CEO at Red Hat replacing industry icon Matt Szulik, who continues to serve as chairman of the board. With Red Hat's navigation duties in his hands, Whitehurst plans to focus on execution as a path to future success with the operating system and enterprise infrastructure software. The new CEO took time out of his preparation to deliver the keynote at next week’s JBoss World conference to talk with Network World senior editor John Fontana about his background, his plans to conquer the enterprise infrastructure market, Linux desktops, virtualization, Red Hat's role in the future of open source, and of course, Microsoft and its patent crusade.
Less than 40 days ago, Jim Whitehurst stepped into the role of CEO at Red Hat replacing industry icon Matt Szulik, who continues to serve as chairman of the board. With Red Hat's navigation duties in his hands, Whitehurst plans to focus on execution as a path to future success with the operating system and enterprise infrastructure software. The new CEO took time out of his preparation to deliver the keynote at next week’s JBoss World conference to talk with Network World Senior Editor John Fontana about his background, his plans to conquer the enterprise infrastructure market, Linux desktops, virtualization, Red Hat's role in the future of open source, and of course, Microsoft and its patent crusade.
You have a diverse background, consulting, COO at Delta, but no real hands on within open source, so why are you a fit for Red Hat?
I think the good news is that Red Hat's core strategy is pretty solid. Ninety percent of what a leader does is about execution. I would any day rather have a lesser strategy executed flawlessly than a flawless strategy executed haphazardly. And I think I bring a whole series of skills around execution. Secondly, I also have some big company experience. Remember, just four years ago Red Hat broke $100 million, so this is a company that still has a lot to do in developing the processes and the systems and the governance structures to continue to scale and be effective and make sure [those things] don't slow the business. Having been at a big company and kind of knowing those structures well, I think I bring a lot to the table to make sure that our internal capabilities never become a hindrance. While I am not from an IT background, I am relatively techie, have hacked on Linux for many years, been a big Fedora user for quite a long time, and so I do kind of understand the community to some extent.
You have a strong business background, is signing a cross-patent licensing deal with Microsoft still bad business for Red Hat?
If we knew what kind of patent issues we had that would be helpful. So it is hard to have productive conversation if we don't know what they are. So it’s way too early to say that. To be clear, I am not some type of religious zealot, I do not have a problem having relationships with proprietary software companies, but we need to think about if it is good for the customers. Interoperability - great - but we would like to do that on open standards. But in terms of patents, it would be helpful if Microsoft would be a little more forthcoming.Red Hat is attempting to move beyond being just an OS vendor, what’s on your to-do list to meet that goal?
We are in a good position in that we have two core product lines that are extremely successful and are in massive markets – RHEL (Red Hat Enterprise Linux) and the layered products that sit on top of that: security, file system, JBoss and the SOA platform. Those are massive, massive markets and we are relatively a small share player.
If you look at data center infrastructure - kind of a broad definition - globally it is nearly a hundred billion dollar market. We are a $500 million company. If you look at the quality of our technology, the power of our open source development model and the quality of our brand, we have a long, long way to go to reach our full potential. So certainly we will move beyond just the OS, and I think we are already doing that to some extent. But let me say, 30 days in is a little early to start prescribing strategy, but based on 30-days-in it would take a pretty strong argument for me to want to get outside of data center infrastructure.
I know investing an incremental dollar in these core businesses will generate multi-dollars of return so why would I want to go invest in something different. I get asked all the time, why weren't you in the bidding for MySQL, and I say, well why would I want to be in the database business. It may or may not be a good business, we don't know that much about it, but we know a lot about the businesses we are in and there is lots of untapped growth potential there so lets make sure we have reached the whole growth potential before we start losing focus.Red Hat has some stated goals around middleware, courting developers and services/SOA; how will you push these goals toward creating a Red Hat enterprise infrastructure platform?
We have lot of thoughts around that, but you will have to come to JBoss World next week if you want to hear a little bit more (chuckles). If you look at our Linux automation, kind of the broader technology vision and what we are looking at in delivering around SOA and middleware, we have a pretty compelling value proposition that we think works quite nicely together. But I think we need to do a better job of articulating that in the marketplace. Specifically around SOA and next steps there, in terms of Linux automation, we still need to do a better job of walking through the power of taking an open source operating system, thinking broadly about the OS in context of virtualization, and what we are basically saying about any application, any time, anywhere.
Think of the power of being able to run an application on bare metal, on a virtual instance in your datacenter, or move it over and run it on Amazon EC2, their compute cloud. When you start to talk about how you enable software-as-a-service, how you enable ISVs to sell in a software-as-a-service mode, it is a key enabler there.
We can do virtual appliances, application appliances with our ISVs that can run certified in any of those locations. So we are enabling a lot of future business models for our ISV partners and customers. Virtualization, it is great to talk about server consolidation, but when you really start thinking about being able to add applications that are truly portable, which we can do with the combination of the OS and virtualization and the work we are doing with Amazon and others, it is incredibly powerful.The JBoss acquisition has not lived up to expectations, what are you doing on that front and what will success eventually look like in terms of exploiting JBoss.
We would have to argue whose expectations. One comment; recognize that we fundamentally changed the business model of JBoss. What I mean by that is JBoss was basically doing a consulting service and trying to monetize a dot .org project. We migrated it to a structure similar to RHEL/Fedora. We did it for a couple of reasons; it is a compelling business model. We have proven it, I would argue it is right now the only proven open source business model of any scale. But more important, I think it is what customers need. What I mean by that is so many companies say “we develop on JBoss but then we implement in production on BEA.” Why? “This is mission critical, we have to make sure it runs, we have to make sure it continues to run going forward.” There is an inherent conflict. Open source is about contiguous iteration and that is why you get continuous innovation. But when you put something in production, the last thing you want is iteration and innovation. You want to put it in there and you don't want the thing to ever go down. Well, how do you use Fedora, or in the case of JBoss, the .org version knowing the thing will continue to iterate going forward. So by having an enterprise edition we believe we add a lot of value for our customers by making it more stable. But in doing so, it takes a while.
How do you characterize Microsoft as a competitor?
Obviously, Microsoft has a massive eco-system. We like to brag about our eco-system. A lot of the value we bring is a huge certified ISV base and a ton of knowledgeable people, but it is obviously much smaller than Microsoft’s. So Microsoft is a strong competitor. I think the issue with Microsoft is that it is expensive, it locks you in, it is relatively bloated, it is a lot of closed standards, and I think far thinking CIOs recognize the danger of getting that locked in. So we think our much more nimble, open source, higher-value offerings are very competitive with them, They’re a solid competitor but we feel good competing against them.Will you emphasize growth on the desktop or is that battle off the radar for now?
I think desktop is a place that is important to support certain areas of the world or certain customers in certain circumstances. It is just not an area where I think there are going to be a lot of big dollars, quite frankly. In order to make money in open source, you better be adding some value. Certainly there are times where desktop may make some sense, but the relative value versus free alternatives out there, I just don't see it as great. Again, this is 30 days in for me, and so I don't need a headline saying "Red Hat not interested in desktop," but what I would say is that I am skeptical that there is a lot of incremental value, there is some, but in terms of being a battlefield that would imply we are all going after it because there is a lot of money to be made there.
If you are Microsoft, they own Windows and continuing to renew Windows, etc, etc, etc. There is no other Windows out there and in their niche with their applications, obviously they make a lot of money. When we look at Linux, Red Hat does not own Linux. On the desktop, I think there is a ton of room for Red Hat, Fedora, and a ton of other distributions but why would you pay, and I am making up a number, $25 for one Linux over another when it is free. I think the desktop will be a huge market in terms of Linux continuing to take share from Microsoft, but it is just unclear how much of that will be paid. And what is paid, it is hard for me to see how it will be more than several dollars.
In Nirvana, what does Red Hat look like in three years?
In Nirvana, we are continuing to grow our share of servers, we are clearly known as the leader of SOA architecture, we are the clear leader in the application server space, we have crested well above the billion dollar level, re-accelerated our growth rate and re-established our position as a large growth company. Those are all quite achievable. Whenever you come into something from the outside, you can talk to people, you can read everything out there, which I did a lot of and had a lot of questions, but I have to say I have been very pleasantly surprised from the inside with the health of our business, the quality of the people and the size of the opportunity.
Linux Foundation CEO Jim Zemlin last year called Red Hat a pillar of open source, is that something you think you have to live up to?
We do have a set of responsibilities as the leading open source company to continue to foster open source and be a leader. We have our fund where we invest in some Linux companies to foster some things we think need to be fostered. We do everything we can to foster the movement. Part of that is because we think it is the right thing to do. Obviously as the leader in open source, expanding open source is good for business, so it is a nice symbiotic relationship and we take our responsibility seriously. We work hard to be good partners and contributors to open source. There are various companies that view open source as something to be exploited. I always like to look and see how much companies are contributing back upstream versus forking the code. We are good stewards of our reputation in open source. It is important.