Red Hat CEO on Crisis, Virtualization and Ballmer

About the crisis

Jim Whitehurst (CEO Red Hat) says that the crisis has become a “perfect storm” in a positive sense for his company, has brought more customers looking for reduced infrastructure costs. The most pleasant thing is that the previously expensive division of JBoss now shows the growth rate of incomes greater than the rest of the company.

“With our sales model (annual subscriptions), we don’t want to close well every quarter,” Whitehurst remarked during a short morning meeting on Wednesday in Palo Alto. When Whitehurst began its third year as CEO, Red Hat reported on the $ 164.4 million received from the sale of subscriptions from a total profit of $ 193.3 million in the last quarter. However, some of the most important customers renewed their Advanced Server subscription to 127% of previous contracts.
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Whitehurst says that many of those who switched to Linux used Unix in the past, but during the crisis, “more and more transitions are being made by Windows users.” Red Hat Enterprise Linux is now running on 15% of servers in data centers, he said. (Microsoft talks about 70% of Windows Server on new servers in data centers). According to Whitehurst, companies are switching to Linux "not only because of its high quality, but also because it is open source software and it costs less," which is an important factor during the crisis.

The negative factor of the crisis is that IT savings have destroyed many new projects, and developers prefer to use Linux in new projects, Whitehurst said.

Microsoft with their Windows and Windows applications, and Oracle with their Oracle Enterprise Linux (based on Red Hat Enterprise Linux) and Oracle applications want customers to buy a vertical stack of applications — and applications and OS — from the same vendor.

Whitehurst considers the vertical stack an erroneous approach. “Somewhere Oracle has customers who use the full stack. But our customers say they want horizontal problem solving, that is, a general-purpose OS that can work with applications from different vendors. With this horizontal problem-solving strategy, Red Hat has taken a solid second place among OS vendors, ”he said.

The modularity of Red Hat Linux and JBoss is a big plus for companies considering the potential difficulties of adding another commercial OS or application server to the infrastructure. Whitehurst claims that the CTO of one of the Fortune 10 companies recently told him that his company chose a three-year subscription to RHEL and JBoss among alternatives not because of initial savings, purchasing licenses, but because they saved "on hardware and costs". to support a large, unnecessarily bloated piece of commercial software. ”

About virtualization

Whitehurst also hopes that the KVM hypervisor, which the company is promoting as its main product in the virtualization market, is waiting for success. In the virtualization market for enterprises, Red Hat competes with VMware, Whitehurst said. KVM was created by Qumranet, an Israeli firm that Red Hat bought in September 2008. KVM is a hypervisor that is built into the Linux kernel and became part of RHEL 5.4 in September. In addition to KVM, Red Hat also supports the Xen hypervisor.

KVM is built into the kernel, and uses the kernel scheduler and memory manager, as opposed to individual hypervisors. This gives RHEL a performance advantage when it is used as a host for virtual machines.

Whitehurst believes that over the next few years, users will require virtualization to be part of the OS, not a separate layer of software. He admits that this opinion makes him closer to the position of Microsoft than most other suppliers. “Twenty years ago, people bought the TCP / IP stack separately. Now it is just a part of the OS. Virtualization will be the same. ”He said.

With KVM in RHEL 5.4, customers have “better performance and better utilization of hardware resources” for running new virtual machine servers. KVM "is already more popular with open source developers than XEN," he said.

About relationships with other open-source companies

Whitehurst often travels to Silicon Valley from his headquarters to speak with familiar directors of companies that produce open source software, venture capitalists and the press. Every time he visits the Valley, he gives a dinner to his CEO’s friends and collects news about new open source projects.

Red Hat was successful under the leadership of the previous CEO, Matthew Rogue, who brought maturity to the young company's business. But with him she was more isolated. Whitehurst tries to ensure that the main players in the open source market are closer to each other, which would allow them to rally at any time, if necessary. Although, this is exactly what Whitehurst considers unlikely. Sometimes it seems to him that it is easier to negotiate with Microsoft, which has manifested clear hostility towards open source software in the past, than with Oracle, which owns two open-source companies and is trying to acquire a third, MySQL AB.

About Balmer

“I’m not on the Steve Ballmer Party Invitation List,” Whitehurst jokes, but our companies have found areas for collaboration. Both compete with VMware, so both certify their OS under the hypervisor of another company. Whitehurst also noted that the growth of Google and VMware pushed Red Hat into the "Microsoft target list." Now Microsoft has enough new challenges in the OS and mobile devices market to worry a lot about Red Hat.

About current affairs in the open source market

When it comes to competition in the virtualization market, “our view, alas, is closer to the views of Microsoft than Oracle”. Oracle, Sun, IBM, Virtual Iron (now part of Oracle) and others have seen Xen as a way to join hands in open-source VMWare market combat, and most of them provided their own version of Xen. That was a mistake, Whitehurst said. They fragmented and divided the Xen community.

Perhaps in the near future, MySQL will become part of Oracle, because Oracle is awaiting approval for a merger deal with Sun. There is a possibility that after this, Michael "Monty" Widenius, one of the MySQL authors, will start promoting his version of the DBMS, MariaDB, as the only "legitimate heir" of the open MySQL. If that happens, "the code will forknut, and this is one of the worst things that can happen with such a product," Whitehurst said.

A project with independent reviewers, testers and contributors is much stronger when everyone works on the same code base than when dividing the community that accompanies the fork. If this happens with MySQL, it will not necessarily be the fault of only Oracle.

Whitehurst sees how more and more open source software companies are being absorbed by market giants. This is because the code of such companies is very high quality. But he believes that it would be better for both developers and the community to keep companies independent. Red Hat is such a company, he says, and sends a jab to Oracle. “I like the clear prospect of being a clean open-source company. It bothers me that as part of a large company you must think within the framework defined by this company, ”he said.