Will Red Hat find a place in the sun on the cloud software market?
Last week , the financial results of Red Hat of the first quarter of 2012 fiscal year (ended May 31) became known - the company's net profit increased by more than a third . Red Hat is confident that they will not only step over $ 1 billion in annual revenue, but also set themselves a new goal - to triple sales in the next five years and earn up to $ 3 billion annually! O_o
Some time ago, I thought about how “How did Red Hat cross the $ 1 billion line?” . Now I am ready to express my assumptions. As arguments, I will quote phrases from the news about the aforementioned financial results, and I will supplement the post with the translation of a small note “Can Red Hat Score Two More Victories?”
So, in my opinion, there are only three reasons for the success of Red Hat:
1) Red Hat is not only Linux.
Despite the fact that for most users, Red Hat is associated exclusively with the production of one of the Linux distributions, Red Hat has quite a weighty portfolio of various corporate software.
2) Honest attitude to partners.
According to Alex Pinchev (Alex Pinchev, president of global sales and marketing for Red Hat), most of the revenue comes from Red Hat partners . Unlike, for example, VMware, which has both its own applications (SaaS) and its own cloud hosting, Red Hat avoids the game on the field of its partners, limiting itself only to the delivery of infrastructure software.
3) Thoughtful investment.
Already, it is clear that investing in the purchase, first JBoss, and then Qumranet (KVM), bring quite tangible returns. But, these are not just bargains that have become “cash cows,” they are the underlying technologies, respectively, of OpenShift and CloudForms. Thus, Red Hat did not just buy some products, but also actively develop them, trying to occupy new market niches.
')
Just a new market niche, or rather, the cloud strategy of Red Hat, is devoted to a note on the site The VAR Guy (below is the translation). Red Hat makes a big bet on cloud computing and it is thanks to them that it hopes to triple the profit:
But can Red Hat find a place in the sun on the cloud computing market?
It is a known fact that RHEL ( Red Hat Enterprise Linux ) and middleware JBoss occupy a dominant position (if we talk about the open source market). But can two new initiatives — namely, Red Hat Enterprise Virtualization and OpenShift become so successful? To do this, Red Hat will have to enlist broad support, primarily among cloud computing partners.
For those who do not follow the news, let me remind you that Red Hat is “at the finish line” to becoming the first $ 1 billion company specializing in Open Source. Red Hat Enterprise Linux deservedly occupies a leading position in the Linux market for traditional servers, and now strives to take its place on the servers for cloud computing. As for JBoss, it not only continues to gain popularity, but also becomes the de facto standard among experienced IT consultants.
Not bad. But Red Hat did not stop at these two directions, now it is busy building a business around RHEV (Red Hat Enterprise Virtualization) and OpenShift. We believe that in the long run, investment in RHEV will bring good dividends, but it’s still early to say that OpenShift will gain a critical mass.
The entire Red Hat virtualization strategy is based on a KVM (kernel-based virtual machine). It is built into the kernel, so RHEV is a logical continuation for RHEL. No doubt, VMware will not soon lose its leadership in the virtualization market, but Red Hat users and partners are already considering RHEV as the most likely platform for virtualization. According to Jim Whitehurst (Jim Whitehurst), CEO of Red Hat, in the long term, VMware will repeat the fate of Sun Solaris. RHEV will be driving out VMware, just as cheap x86 servers with Linux have been “eaten up” by expensive Solaris SPARC servers.
According to our estimates, RHEV will gradually grow, and by 2013 it will reach a critical mass. Already, Red Hat can show several of its partners who successfully use RHEV. These include Mainline Information Systems (a large business partner of IBM), Shadow-Soft (cloud consulting company), Unilogik Systems (a certified Oracle partner) and Zinc Solutions (web-design and web hosting).
To compete with VMware, Red Hat must enlist the support of hundreds of new partners. But using Open Source virtualization and the impressive Linux installation base of Red Hat seems to be a solid foundation for long-term success.
At the same time, Red Hat launches OpenShift , a PaaS platform (Platform as a Service), which will allow developers to write applications running on any cloud infrastructure. The project OpenShift is intriguing and ambitious. This is what industry expert Dana Blankenhorn [Dana Blankenhorn] says:
This seems to be true. But will Red Hat really be able to bite off a piece of the “pie” with larger software companies (Microsoft and VMware), with much larger development teams? Hmm ... The answer may be in the Red Hat community strategy and the growing list of companies promising to support OpenShift. But the work on OpenShift remains unfinished - only Express Developer Preview and Flex Developer Preview are available so far. Red Hat promises to launch OpenShift Power by the end of this year.
Usually Red Hat and its partners achieved good results, occupying already established markets. For example, Red Hat Enterprise Linux became the successor of various Unix-systems, and middleware JBoss pressed BEA WebLogic and IBM WebSphere. If this scheme continues, Red Hat Enterprise Virtualization will be able to occupy part of the VMware market.
But the uniqueness of the situation is that the cloud computing market is in its infancy. At any moment everything can change on it. There are no leaders who would remain so in the long term, and standards are still evolving. As a result, Red Hat cannot “destroy” the cloud computing market, since the market itself has not yet been formed. The OpenShift platform will have to compete on equal terms with a large number of participants in the “cloud” market - and this is a difficult task for any company, not only for Red Hat.
Conclusion: Red Hat has a really difficult task, it has found itself in an unusual role - it forms the market together with other companies, and does not force out the proprietary software suppliers. If Red Hat succeeds in carrying out its plans, the company will not only receive good financial dividends, but also reach a new level. The level at which Open Source is not just a significant price reduction, but also the functionality ahead of competitors. And ... here we must pay tribute, Red Hat has prepared a very good foundation for the "cloud" battle. I believe Red Hat will succeed. ;-)
Some time ago, I thought about how “How did Red Hat cross the $ 1 billion line?” . Now I am ready to express my assumptions. As arguments, I will quote phrases from the news about the aforementioned financial results, and I will supplement the post with the translation of a small note “Can Red Hat Score Two More Victories?”
So, in my opinion, there are only three reasons for the success of Red Hat:
1) Red Hat is not only Linux.
Despite the fact that for most users, Red Hat is associated exclusively with the production of one of the Linux distributions, Red Hat has quite a weighty portfolio of various corporate software.
A significant part of the orders received for the supply of middle-level software (middleware).
2) Honest attitude to partners.
According to Alex Pinchev (Alex Pinchev, president of global sales and marketing for Red Hat), most of the revenue comes from Red Hat partners . Unlike, for example, VMware, which has both its own applications (SaaS) and its own cloud hosting, Red Hat avoids the game on the field of its partners, limiting itself only to the delivery of infrastructure software.
63% of Red Hat's revenues in the last quarter brought sales through partners, which exceeded the expected figure of 60%
3) Thoughtful investment.
Already, it is clear that investing in the purchase, first JBoss, and then Qumranet (KVM), bring quite tangible returns. But, these are not just bargains that have become “cash cows,” they are the underlying technologies, respectively, of OpenShift and CloudForms. Thus, Red Hat did not just buy some products, but also actively develop them, trying to occupy new market niches.
')
Just a new market niche, or rather, the cloud strategy of Red Hat, is devoted to a note on the site The VAR Guy (below is the translation). Red Hat makes a big bet on cloud computing and it is thanks to them that it hopes to triple the profit:
This figure will triple over the course of 5 years due to widespread cloud computing, Whitehurst (Jim Whitehurst, CEO of Red Hat) said: Clouds are generally based on open source solutions. ”
But can Red Hat find a place in the sun on the cloud computing market?
Can Red Hat win two more victories?
It is a known fact that RHEL ( Red Hat Enterprise Linux ) and middleware JBoss occupy a dominant position (if we talk about the open source market). But can two new initiatives — namely, Red Hat Enterprise Virtualization and OpenShift become so successful? To do this, Red Hat will have to enlist broad support, primarily among cloud computing partners.
For those who do not follow the news, let me remind you that Red Hat is “at the finish line” to becoming the first $ 1 billion company specializing in Open Source. Red Hat Enterprise Linux deservedly occupies a leading position in the Linux market for traditional servers, and now strives to take its place on the servers for cloud computing. As for JBoss, it not only continues to gain popularity, but also becomes the de facto standard among experienced IT consultants.
Not bad. But Red Hat did not stop at these two directions, now it is busy building a business around RHEV (Red Hat Enterprise Virtualization) and OpenShift. We believe that in the long run, investment in RHEV will bring good dividends, but it’s still early to say that OpenShift will gain a critical mass.
The entire Red Hat virtualization strategy is based on a KVM (kernel-based virtual machine). It is built into the kernel, so RHEV is a logical continuation for RHEL. No doubt, VMware will not soon lose its leadership in the virtualization market, but Red Hat users and partners are already considering RHEV as the most likely platform for virtualization. According to Jim Whitehurst (Jim Whitehurst), CEO of Red Hat, in the long term, VMware will repeat the fate of Sun Solaris. RHEV will be driving out VMware, just as cheap x86 servers with Linux have been “eaten up” by expensive Solaris SPARC servers.
According to our estimates, RHEV will gradually grow, and by 2013 it will reach a critical mass. Already, Red Hat can show several of its partners who successfully use RHEV. These include Mainline Information Systems (a large business partner of IBM), Shadow-Soft (cloud consulting company), Unilogik Systems (a certified Oracle partner) and Zinc Solutions (web-design and web hosting).
To compete with VMware, Red Hat must enlist the support of hundreds of new partners. But using Open Source virtualization and the impressive Linux installation base of Red Hat seems to be a solid foundation for long-term success.
At the same time, Red Hat launches OpenShift , a PaaS platform (Platform as a Service), which will allow developers to write applications running on any cloud infrastructure. The project OpenShift is intriguing and ambitious. This is what industry expert Dana Blankenhorn [Dana Blankenhorn] says:
More people are working on OpenShift, the PaaS platform of Red Hat, than they have worked on any other Red Hat product, and it directly competes with platforms from VMWare and Microsoft. This platform supports many operating systems and frameworks, not just those that Red Hat does, and there are good prospects for this approach.
This seems to be true. But will Red Hat really be able to bite off a piece of the “pie” with larger software companies (Microsoft and VMware), with much larger development teams? Hmm ... The answer may be in the Red Hat community strategy and the growing list of companies promising to support OpenShift. But the work on OpenShift remains unfinished - only Express Developer Preview and Flex Developer Preview are available so far. Red Hat promises to launch OpenShift Power by the end of this year.
Usually Red Hat and its partners achieved good results, occupying already established markets. For example, Red Hat Enterprise Linux became the successor of various Unix-systems, and middleware JBoss pressed BEA WebLogic and IBM WebSphere. If this scheme continues, Red Hat Enterprise Virtualization will be able to occupy part of the VMware market.
But the uniqueness of the situation is that the cloud computing market is in its infancy. At any moment everything can change on it. There are no leaders who would remain so in the long term, and standards are still evolving. As a result, Red Hat cannot “destroy” the cloud computing market, since the market itself has not yet been formed. The OpenShift platform will have to compete on equal terms with a large number of participants in the “cloud” market - and this is a difficult task for any company, not only for Red Hat.
Conclusion: Red Hat has a really difficult task, it has found itself in an unusual role - it forms the market together with other companies, and does not force out the proprietary software suppliers. If Red Hat succeeds in carrying out its plans, the company will not only receive good financial dividends, but also reach a new level. The level at which Open Source is not just a significant price reduction, but also the functionality ahead of competitors. And ... here we must pay tribute, Red Hat has prepared a very good foundation for the "cloud" battle. I believe Red Hat will succeed. ;-)
Source: https://habr.com/ru/post/122799/
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