Red Hat guns for MS database space
With a little help from IBM friends
I understand you've got a database coming out, can you tell us a bit about it?
The database will be shipping on July 10th. In essence it is another fillip to the Red Hat architecture, it's open source (based on the PostgreSQL database) and offers a whole range of advantages to organisations wishing to deploy a database solution. We have ventured down this road because we see an opportunity to take our disruptive business model into other tiers of the technology architecture. It simply made a lot of sense for us to move down this route.
So how will this compare with other offerings in this space?
It will compare very favourably. Organisations will be able to take the Red Hat Database and implement it into their departments and draw their own comparisons with current proprietary solutions and I think they will be very pleased.
Why so pleased exactly?
The reasons for buying a Red Hat Database are very compelling. Our unique selling point is based around the open source principles and the considerable cost benefits that can be experienced by making such a choice. Add into that the global support that we provide and Red Hat Database is a very strong solution.
But will that convince serious businesses to buy the product?
I think it will, yes. We are increasingly seeing technologists at all levels of the business, and through all levels of business, making the philosophical decision to follow an open source path. They are having that debate with themselves - do they go open source or stick to proprietary - and we are winning a great deal of mind share. But the philosophical argument is only a part of the proposition. The economics of the Red Hat Database quite simply make a lot of sense. We offer a very low total cost of ownership, an open source GPL and a subscription model that makes the price package very reasonable indeed. We estimate that we will coming in at around 25% of the cost of proprietary solution and that gives organisations a very attractive, cost effective, route into open source.
So you're going head to head with Microsoft?
Certainly we will be operating in a very similar space to Microsoft yes. But that isn't our target market just yet. We have a product that is perfect for departmental use, anything less than 100 seats essentially, and we will be looking for wins in this space. The first people that we will be targeting will be the existing Linux and open source users. We already have a customer base of thousands - everyone from current Red Hat users to Apache users. After that we will be looking to scoop up some of the migration from SCO and, particularly, Solaris. We see more and more people migrating from the proprietary Unix systems and, once again, we can provide them with a very cost effective solution.
We are uniquely placed in this market in that we have absolutely no reliance on Microsoft whatsoever. That means we can come to market with innovative solutions that challenge existing beliefs and offer organisations new opportunities. There has been an awful lot of very hard work gone into this solution. And it continues as we speak through open source and our own dedicated development team, which was about 10 or 11 last time I looked.
Presumably a great deal of the success of the database is going to be inextricably linked to the VAR community. But that means going up against the likes of Progress, IBM and Oracle. How are you going to manage that - this lot have invested very heavily in the VAR community?
The success of any database is, in many ways, linked to the availability of applications and we will be launching a number of initiatives to target the VAR community. Already though we are making gains and have gathered a lot of support. Our argument is simple, developers need scalable, robust, strong solutions that are cost effective. That is precisely the solution that we can offer - and that is already swaying the VAR's.
And Oracle and IBM?
To be honest I don't think these two have got a lot to fear. We've obviously had conversation with these two and especially IBM and they have known about this release for some time. However, we were never going into their space. If you look at DB2 for instance they operate in the top tier enterprise space, we will be operating just below that. I think what you will find is that our database will provide a very attractive upgrade path for users moving from departmental to enterprise databases - it certainly makes a lot more sense than a proprietary solution.
But what about the Informix solutions?
Again, I don't think that there is very much overlap between the products.
Do we take it then that Oracle and IBM are using Red Hat as a stick to beat Microsoft?
I think it is fair to say that we are being successful against a number of things. At the top end we are beating proprietary Unix solutions, especially Solaris, and becoming a very attractive platform for people looking to standardise their architectures. At the low end we are undoubtedly slowing down the penetration of NT. The desktop is Microsoft's. But when it comes to servers and workstations we are making a lot of wins. All of this does mean that we are seeing a lot more focus and more partnership opportunities from IBM; if that hurts Microsoft so be it.
We noticed that your recent financial results were well received. Does that mean Red Hat is maturing as a business, or that it has figured out how to manage the financial analysts?
The results showed that we can profitable and cash flow positive. We've beaten the financial analysts for the past seven quarters and we are showing that this open source movement works. We have major companies buying into this movement and that justifies the hard work and justifies the principle of open source. Further to that though, it shows how well this company is being managed. When we started this company we took the view that to be successful we need experienced managers and that is a principle we stick to. We are making money, we are making contract wins and, step-by-step, we are making major gains in this industry on the basis of a whole new business model. It is of course worth bearing in mind that we are going up against some of the most successful companies the world has ever seen, but that hasn't stopped us so far.
So where do you see Red Hat nowadays? The launch of the database suggests a possible new approach - now you have the perfect infrastructure for applications, can we expect Red Hat Office on the horizon?
No. We have no ambition to do that. Certainly we know that it is a hugely successful area, as we have seen with Sun's recent StarOffice win in the Department of Defense, but we already support a number of suites. Overall Red hat is working its way around the architecture. To date we have the compiler technologies, which we acquired from Cygnus, the operating system and now the database - as well as plenty of other solutions. Further to that we've got the Stronghold security solution, from C2, which is actually doing very well indeed. We've found a lot of the European financial institutions turning to this for their needs. And of course we've got the Red Hat network (the electronic maintenance and testing suite) which holds the whole thing together, providing pivotal support for all of the Red Hat solutions. But we do still see gaps in the technology architecture that need addressed.
The general file system (GFS) is something that we believe could do with some work. GFS could do with a solid open source solution and we are working very hard on this. We already support a number of GFS but we may look to develop or support further initiatives over time. It's certainly an area we are looking at very closely.
But what about the future of Linux as a whole. We read an interview recently where Linus Torvalds said it is still very much a hobby for him. Is that a good message to be going out to would be business users?
I think Linux is very much a hobby to Linus, but that doesn't mean it is for everyone else. You have to remeber the structure of the developments. Beneath Linus there are ten core maintainers, seven of which work for Red Hat. Beneath them there is perhaps another 100 and beneath them you get into the tiers of thousands of maintainers. This means that Linux is just about Linus anymore, he is undoubtedly a critical figurehead, but developments on Linux are enormous. There are very strong development teams out there working on Linux, and I really do mean exceptionally strong development teams. There are companies that have Linux now so engrained in their organisation, and the activities of their developers, that it really is a very serious environment.
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