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When Computer Weekly began writing about Red Hat, the company was beginning to get its story together around Linux as a replacement for Unix servers in the datacentre.
Linux in the datacentre was a “no-brainer”, according to Werner Knoblich, senior vice-president and general manager of Red Hat Emea.
“It started with the investment banks on Wall Street with electronic trading,” he says. “It was all about speed. They wanted to utilise fast hardware.”
At the time, the clock speed of Intel-powered hardware was outperforming Unix hardware. He says the faster Intel processors suited the high transaction rates required by high-volume trading systems.
This became the sweet spot for Red Hat, where the Unix-like open source Linux operating could run the new generation of high performance Intel-based servers.
Open source is about innovation
“Our success in the datacentre had nothing to do with cost savings. The driver for adoption of Linux was true functionality and technical capabilities,” says Knoblich.
Open source is becoming the innovation engine for technology, he says. “If you look at where innovation is happening in the cloud, in infrastructure or with containers – or with big data or artificial intelligence – all the innovation is occurring in open source communities.”
Many people compare open source to commercial software – also known as “closed source”. Knoblich does not believe open source is a business model. “Open source is a software development model. It is our development engine,” he says.
We use only open source software, or acquire technologies and then release the code as an open source project.” While a company like Microsoft will rely on its army of internal software developers to develop Windows or Azure, he says: “All of our 4,000 developers build software in open source communities, and 100% of whatever we do goes back to the open source communities.”
To make money, Knoblich says Red Hat then offers its customers a subscription through Red Hat Enterprise Linux (RHel), which includes technical support and a product that is certified by major hardware and third-party independent software providers.
“Our business model is to add value to the free, open source technologies. Our version of Linux is certified by IBM, HP, Dell, Fujitsu and all the hardware manufacturers, SAP, Oracle, and other software companies,” he says.
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Long life-time support is the third part of the subscription. “We maintain Linux for up to 13 years compared with other products, which vary between five to seven years’ support,” says Knoblich. “We fix bugs in older versions, which the open source community tends not do itself.”
As an example, he says of the recent Spectre and Meltdown processor bug: “We knew about the flaw months before it was made public and we had a fix the day it was announced.”
This patch was made available to all versions of Red Hat Linux, which were still under maintenance contracts. It is the enterprise subscription which has cemented Red Hat as an enterprise open source software provider, and enables it to offer enterprise support analogous to that available from the likes of Microsoft, Oracle and IBM.
Enterprise open source
Red Hat has evolved from a single-product company to a multi-product company: to what Knoblich describes as “a portfolio” company.
In 2002, the company’s strategy began to take form with the launch of Red Hat Enterprise Linux (RHel), a distribution of the free open source Linux operating system, packaged up as a subscription with an enterprise support agreement.
Then, in 2006, it made its first major acquisition, purchasing JBoss for $400m to establish itself in the Java application server market, where it could offer an alternative to IBM WebSphere and Oracle WebLogic.
“We then developed our middleware from the JBoss application server to a complete portfolio including a rules engine, a business process engine, data caching and data virtualisation. We then expanded into virtualisation and the cloud. We are now focusing on OpenStack and OpenShift for container management,” says Knoblich.
While it started out as a Linux company, this diversification has meant its revenue from Linux has dropped from 100% to 70%. “Every single quarter, the share of revenue is shifting from Linux to emerging technologies,” he says.
The company began talking five years ago about how the world of IT was shifting to a hybrid cloud model. “No one believed us,” says Knoblich. “Everyone was saying it would be 100% public cloud. Today, everybody is talking about hybrid cloud, and I expect it will be hybrid for many, many years to come.”
Products that work in a hybrid world
From a product strategy perspective, he says Red Hat has tried to ensure its products work in a hybrid world. “We are giving customers the ability to run workloads on bare metal, in the public cloud, a private cloud or in a virtualised environment,” he says.
OpenShift, an extended version of Kubernetes, is the company’s hottest product. “OpenShift works as an abstraction of the hardware. A customer wants to develop an application once, and without touching the code, run it on VMware or move it to Azure or AWS.”
So while Red Hat remains an enterprise Linux company, Knoblich sees it increasingly becoming a major force in OpenStack and with containers. In fact, after Google, which invented Kubernetes, he says Red Hat is the next largest contributor to the open source container management software.
Knoblich regards open source software not as a cheap or free option, but a powerhouse for innovative software development. And while the webscale giants like Google, Amazon and Facebook may well be the largest contributors in the open source community, Knoblich sees Red Hat as the next largest contributor, whose value is in its independence.