Feeds

Red Hat chief tells start ups to grow, not cash out

The romance is gone

Remote control for virtualized desktops

OSBC Red Hat chief executive Matthew Szulik today told startups to forget the "romance" of open source and build businesses that compete with proprietary vendors on services and value.

Opening the Open Source Business Conference (OSBC) in San Francisco, Szulik said [advocates of] open source no longer need to legitimize its existence by talking about lower costs or the actual technology components. The challenge now is scaling to meet customer demand.

Szulik urged startups to rip up the prevailing Silicon Valley business plan of exit strategy via Google acquisition, and focus on delivering value - especially to enterprise customers.

"It's about how do you create a culture - that's very, very different to how do you create a product and sell that to Google," he said. "There's more than enough venture capital to fund early stage companies, but [the question is] how do you grow beyond a $1bn company?"

He spoke of trillions of dollars of opportunity in liberating IT infrastructure and data locked up in enterprise legacy applications and platforms. That means potentially migrating applications, building composite applications or adding a web-front end to legacy systems.

"The enterprise can't simply unhook billions of dollars they've invested in Cobol and legacy environments. That's an enormous opportunity for some clever mind," he said.

With large enterprises already using Linux and open source in mission-critical deployments and their infrastructure, open source has arrived. So the discussion has shifted to what Szulik called new sources of value - or service levels.

"The software industry wasn't trained to create a high degree of services. If it were, 45 per cent of your budgets wouldn't be tied to services and maintenance. What makes open source work, is not the one and zero but developing service levels to compete with the proprietary space [vendors] and scale beyond that."

According to Szulik, building a scalable business is "something Red Hat continues to have to learn".

Continuing the theme of unlocking enterprise data from legacy and proprietary systems, he made his first veiled reference to Microsoft, on Office and the global move towards open standards around document XML formats such as ODF.

According to Szulik "someone" (i.e. Microsoft) wants remuneration for storing and retrieving personal information "at a time when search and indexing is evolving".

He also picked up on the debate re-ignited by Microsoft last week when again laid claim to unspecified patents that Linux and open source infringe. According to Szulik, open source is not a "renegade industry" and respects intellectual property. But companies will derive little business value from devising and registering patents, he argues.

"There's little emperical evidence between patents and innovation, especially in the infrastructure space... we see patents really being a challenge to innovation. The industry moves much, much faster than any remedying process. If you receive a patent injunction it will be years, and you will be out of business, before there's a remedy," Szulik said. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Bada-Bing! Mozilla flips Firefox to YAHOO! for search
Microsoft system will be the default for browser in US until 2020
Be real, Apple: In-app goodie grab games AREN'T FREE – EU
Cupertino stands down after Euro legal threats
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
Nexus 7 fandroids tell of salty taste after sucking on Google's Lollipop
Web giant looking into why version 5.0 of Android is crippling older slabs
SLURP! Flick your TONGUE around our LOLLIPOP – Google
Android 5 is coming – IF you're lucky enough to have the right gadget
Microsoft: Your Linux Docker containers are now OURS to command
New tool lets admins wrangle Linux apps from Windows
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.