Feeds

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

The romance is gone

Security for virtualized datacentres

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. ®

Internet Security Threat Report 2014

More from The Register

next story
ONE MILLION people already running Windows 10
A third of them are doing it in VMs, but early feedback focuses on frippery
Sign off my IT project or I’ll PHONE your MUM
Honestly, it’s a piece of piss
Netscape Navigator - the browser that started it all - turns 20
It was 20 years ago today, Marc Andreeesen taught the band to play
Torvalds CONFESSES: 'I'm pretty good at alienating devs'
Admits to 'a metric ****load' of mistakes during work with Linux collaborators
Sway: Microsoft's new Office app doesn't have an Undo function
Content aggregation, meet the workplace ... oh
Do Moan! MONSTER 6-day EMAIL OUTAGE hits Domain Monster
Customers freaked out by frightful service
Ploppr: The #VultureTRENDING App of the Now
This organic crowd sourced viro- social fertiliser just got REAL
Return of the Jedi – Apache reclaims web server crown
.london, .hamburg and .公司 - that's .com in Chinese - storm the web server charts
NetWare sales revive in China thanks to that man Snowden
If it ain't Microsoft, it's in fashion behind the Great Firewall
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
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.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.