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Red Hat Enterprise Linux to contribute $10tn to global business

A study on the economic impact of Red Hat Enterprise Linux by IDC revealed that the operating system is expected to contribute to business revenues worth 5% of the global economy

Red Hat Enterprise Linux (RHEL) is expected to contribute to more than $10tn worth of global business revenues, or 5% of the global economy, in 2019, a study has found.

Commissioned by Red Hat, the study by analyst firm IDC found that RHEL is most frequently used in enterprise management and production (26%), IT infrastructure (20%) and customer relationship management (18%).

Enterprises using RHEL also expect to save $6.7bn in 2019 alone, thanks to a reduction in the annual cost of software by 52%, and the time it takes to perform standard IT tasks by 25%.

The economic benefits of RHEL extend to global employment and local investments as well. By the end of 2019, the RHEL ecosystem will directly employ nearly 900,000 workers, with an additional 236,000 jobs added through 2023.

The number of RHEL-focused IT professionals – defined by IDC as those who work with software, hardware and services stacked on RHEL – is estimated at 1.7 million worldwide and will reach 2.1 million by the end of 2023.

But more than a technology platform, the IDC report showed that RHEL is a revenue driver. By the end of 2019, the RHEL ecosystem of partners and resellers will generate more than $80bn, gaining $21.74 for every dollar of revenue generated by Red Hat.

IDC expects this trend to continue, with net new ecosystem revenues from 2018 to 2023 adding up to more than $135bn for Red Hat partners.

While some of the firms in the Red Hat ecosystem are multinational organisations, most are not. Fuelled by the RHEL ecosystem, IDC said these regional companies will invest more than $35bn in local economies by 2023.

RHEL 8

At the Red Hat Summit in Boston, taking place on 6 to 9 May, Red Hat took the wraps off RHEL 8, its latest version of the Linux operating system that has been touted to make it easier for enterprises to take advantage of the latest innovations in hybrid cloud, containers and DevOps.

It includes built-in management tools, such as Red Hat Insights to proactively identify and remediate IT issues, from security vulnerabilities to stability problems, before they occur.

The operating system also uses predictive analytics based on Red Hat’s vast knowledge of open technologies to help administrators avoid problems and unplanned downtime in production environments.

During a keynote session, Red Hat engineers also demonstrated how RHEL 8 can be used to deploy different versions of software packages via Application Streams, as well as build and deploy virtual machine templates or “golden images” across multiple locations including on-premise and public clouds including Amazon Web Services (AWS).

Growing Linux adoption

Brendan Paget, director of product portfolio at Red Hat Asia-Pacific, noted that Linux adoption in the Asia-Pacific (APAC) region is growing. “From 2017 to 2018, the paid Linux market in APAC grew 14% and Red Hat is growing faster than that,” he said.

On the relevance of RHEL 8 to APAC customers, Paget said the operating system’s new management tools, including Red Hat Insights, which proactively identifies and remediates IT issues before they occur, will be useful to enterprises in a region where there is a shortage of skilled administrators.

“We need to find the skills for people to administer these systems, and Insights will be useful to help smaller teams run a large scale set of systems,” he said.

Asked about the potential takeup of RHEL 8 in APAC, Paget said enterprises that are planning to develop containerised applications are likely to be the earliest adopters.

Damien Wong, Red Hat’s vice-president and general manager for Asian growth and emerging markets, singled out enterprises that are still using the Unix operating system as another potential customer segment that will benefit from RHEL 8.

“RHEL 8 does increase our value proposition,” Wong said. “Red Hat Insights embedded within RHEL 8 will provide organisations with additional capabilities around our past knowledge and experience in remediating issues.”

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