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Paul Cormier and Tim Yeaton (see for OSS Talking with… interview early next week) led off the Red Hat financial analyst conference conducted as part of the Red Hat Summit in San Diego this week. The slides are available on the Red Hat web site under the Investors heading.

Paul Cormier began by talking about Red Hat customer involvement in influencing product roadmap development. Of course listening to users is as old as IBM Share and COMMON but the fact that users take the lead in the open source software (OSS) development process, over internal development departments, is what’s new. He outlined how the Red Hat Open Source Architecture is so linked to the community. Even “outside” OSS efforts such as GNU, Apache, Xen virtualization, and so forth lead into the corporate Red Hat deliverables such as Red Hat Enterprise Linux (RHEL) 5.

Now, according to Cormier, with JBoss and RHEL 5, the architecture, which was just a roadmap, has been replaced with a platform, “a (substantive) new era in operating environments.” The three offerings in the platform include the RHEL “advanced” platform, the JBoss framework, and the two put together. As is typical, with JBoss—where the technology is less mature—the explanation is a little more complicated (in terms of trying to rationalize the classic JBoss app server with Hibernate, Metamatrix and other piece parts).

Tim Yeaton took over to talk about the market, emphasizing virtualization. Naturally this market opportunity analysis is of more interest to the IT investment community rather than to users. But looking at the data can be useful to you in terms of understanding your needs in juxtaposition with your peers’ needs.

Tim began by outlining the server market in terms of new acquisitions (68% Windows, 22% Linux and 10% Unix, according to IDC). Are you seeing this in your enterprise?

Tim also used IDC data to illustrate that the perceived leading value of virtualization, production consolidation (50% of the action today), gets replaced by 2010 by mission- and business-critical high-availability applications as the leading use of virtualization functionality.

Red Hat mixed Aberdeen, IDC and Gartner data; out of past loyalties, I only cite IDC. An IDC slide shows the Linux/OSS ecosystem growing from $15 billion in 2006 to over $40 billion in 2010.

-- If Red Hat feels it only can compete for a portion of that bar, I’m not sure which parts they are targeting.
-- But with programs like the Red Hat Exchange, I don’t see why Red Hat can compete for the whole stack except for hardware.

After Tim and Paul, Alex Pinchev, the VP of sales, talked about many aspects of how users are supported, especially talking about how Red Hat plans to build back its channel flow as a percentage of total (it dropped because of the acquisition of the mostly direct JBoss, not because channel flow dropped absolutely).

At the end, Charlie Peters, the CFO, repeated the presentation given yesterday and summarized here.

CEO Matthew Szulik did an epilog on recent results that highlighted the RHX program (apparently more news to come on Thursday May 10) and the worldwide strength of Red Hat.

The only thing I was surprised by was the dog that didn't bark. Red Hat also put out a press release today on desktop Linux but there was no mention of that sujbect for the financial community by the marketing, engineering, sales, financial or executive speakers. I suspect that the Red Hat Linux on Desktop message is strictly for the true-believer community and that the real Red Hat strategy continues to be to replace Unix on servers.

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

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