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Matthew Szulik, CEO of Red Hat, spoke this morning at a Merrill Lynch investment conference. He repeated the Red Hat executive observation from last week (see blog entry of February 7) that Oracle's November announcement about servicing Red Hat Enterprise Linux (RHEL) has legitimized the market. He also spoke about the Novell/Microsoft deal: he says "free doesn't cut it" for his users (those who want "free" can go to fedoraproject.org). Enterprise customers understand they need the service level Red Hat provides for a fee so he hopes everyone just uses up the Microsoft coupons (that get users SUSE Linux). When the coupons are gone, OSS market dynamics will get back to normal.

Szulik highlighted the server-side compute loads now being migrated over to Linux (graphics and telecomms now as opposed to simple things like mail boxes 10 years ago). Because of this, the discount offered by Oracle on a Red Hat Linux knock-off is a small part of TCO and is not affecting Red Hat's business. He tied the Fedoraproject.org activity to the later RHEL release schedule in the same way that Max Spevak had (see my blog entry of February 3).

The Red Hat CEO highlighted Red Hat's own virtualization "incorporated" in RHEL Version 5, scheduled for release the end of this month (as opposed to SUSE Linux with its Xen-based virtualization "on the side") . The EMC move last week to partially spin out VMware has made virtualization a hot topic but Szulik cautioned that virtualization is not trivial (I give him points for reality).

On JBoss, Szulik commented on the organizational process (e.g., departing executives) and the functional advances Red Hat has made to JBoss already (e.g., localization). He cited the great cross selling opportunities because only about 3% of Red Hat Linux systems had JBoss on them. Also he said JBoss was mostly a development phenomenon and top execs (even top IT execs) had very little exposure to it. It is Red Hat's challenge to take advantage of that opportunity. JBoss saved them efforts in middleware development that they had already started; that team was able move over and take over some of the holes left by JBoss management "retirements." SOA is going to take 3-7 years. Again, he gets high marks for reality from me.

He spoke of Red Hat's opportunities by industry and geography, all of which were cited as mainframe or UNIX migration opportunities. He gets more high marks for reality. He feels Linux on desktop success will follow because of efforts such as Mozilla and stateless Linux but that is more of an opportunity outside the U.S. (that jibes with Microsoft's results). Again, reflecting reality, he is not simply talking about knocking off Windows personal productivity users by the millions.

For the integration software user, Szulik's understanding of
-- your needs by industry and geography
-- IT history (he had a lot of references to the past successes and problems of Unix, object technology, development tools, and so forth; problems he says he can help you avoid),
- the fact that you want choice
-- the entire stack and to leading edge functionality such as virtualization (not just Linux)
are all good signs.

NOTE: Early in my blogging schedule, I feel Red Hat is getting too much attention. This is partially because they are one of the few OSS pureplays. But it is also a sign that there few other OSS "solutions," particularly true of real applications. In my opinion, Linux is still at the stage infrastructure software products such as VAX VMS and DG RDOS were in 1975. I will be digging for more solutions this Thursday at the InfoWorld Open Solutions Conference (formerly east coast LinuxWorld). If you are aware of OSS middleware or applications you want followed, let me know using the comment section below.

Posted by dennisb in OSS Business Issue |Digg This|Add to del.icio.us

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