Open source supplier Red Hat is growing its business quickly in non-traditional markets in the UK, mirroring US expansion, according to chief executive Jim Whitehurst.
Whitehurst told Computerworld UK that while Linux had a deep presence in financial, telecoms and military sectors, Red Hat predicts fast growth in other markets where a number of companies are moving away from Unix.
“We are seeing a lot more business in less traditional sectors where Unix still predominates, and there’s really a lot of Unix still out there,” he said. “Transport, retail, oil and gas, and utilities are big sectors for growth.”
Discussions are also ongoing between the company and the UK government, Whitehurst said, noting that Whitehall was “keen to level the playing field” for open source.
He said that Linux business expansion was not dependent upon organisations refreshing their hardware. “I don’t care about server growth rates in markets,” he said. “We’re really in the business of taking marketshare from rivals.”
Partnerships are also key. Red Hat has been developing its relationships with system integrators including Accenture and Capgemini, and server markers such as HP and IBM, Whitehurst said, in order to help grow its business where those companies have a presence.
Last week, as Red Hat delivered positive financial results, showing revenues had risen 25 percent year on year to $244.8 million (£153.3 million), Whitehurst predicted that it would become “the first pure-play open source company to achieve $1 billion [£626 million] in revenues next fiscal year”.
While the newer sectors were proving significant growth, Whitehurst said the more traditional sectors including finance were also solid, both for Linux support and other Red Hat products. “We still have historical strength there,” he said.
Stock exchanges are among Red Hat’s major customers, with venues such as NYSE (which also uses JBoss middleware), Tokyo and Deutsche Borse using its products. However, the London Stock Exchange recently moved from a Microsoft Windows Server architecture to Novell SUSE – a key open source rival to Red Hat.
Whitehurst said Red Hat offered better support and quicker problem solving than other Linux distributions, including Novell’s. “People often go to Novell and say it’s the cheapest option. But we invest more in the product and we believe we are quicker to respond to user demands and to solve problems.”
He said he felt Novell “lost a lot of momentum” when it “did a deal with Microsoft”, referring to a joint patent agreement signed by the companies in 2006 that proved controversial in the open source community.
In 2010, Red Hat released version six of its Enterprise Linux product, offering larger memory capabilities, power saving and a raft of bug fixes.
A key part in growth was the start of the recovery of the IT market, he said. “Spending has definitely improved. We’re in the middle of a paradigm shift in computing, with Linux becoming seen as a more viable alternative. There are a lot of new projects out there and they’re more likely to be developed on the open source stack.”
Red Hat takes regular feedback from customers to help it develop its products, Whitehurst said.
Cloud computing is a key area of business for the company, and clients include Amazon, Salesforce and Google who provide “regular information” on a “day to day basis” as well as in strategic meetings.
Further growth would come from JBoss middleware – including its application server, service oriented architecture, and data services.
And virtualisation was a major area of potential growth for Linux, he said. “Very little Linux has been virtualised. Our product might not have all the bells and whistles of VMware but we believe it’s faster.”