Feeds

Red Hat plots re-org to deal with JBoss woes

Bad Java aftertaste

Build a business case: developing custom apps

Red Hat is suffering from JBoss reflux, according to a pair of prominent open source software watchers.

Credit Suisse analyst Jason Maynard has issued a fresh report in which he downgrades Red Hat to "neutral" from "outperform" due to what he sees as organizational struggles. The analyst once thought Red Hat's digestion of JBoss would result in a strong sales increase. Instead, Red Hat faces serious challenges learning how to be more than a one-trick Red Hat Enterprise Linux (RHEL) pony.

"Our checks indicate that the organization continues to be in a state of flux as the company works through its transition to a multi-product company," Maynard wrote. "These struggles appear to be more pronounced than we had anticipated and will likely take longer to fix. In our opinion, these challenges are largely fixable but it won’t happen overnight."

According to both Maynard and pro-bogger Matt Asay, Red Hat looks set to undertake a major reorganization designed to improve its sales model. Maynard expects Red Hat to create distinct business units for each of the company's major product areas - OS, middleware and network delivery. The analyst thinks this transition will only add to Red Hat's near-term woes, while the bogger is more optimistic.

"This seems like a good thing . . ." Asay wrote. "Let the JBoss team operate quasi-independently and meet their business requirements without thinking too hard about the OS business (i.e., support for Windows should be a non-issue). This is similar to how Oracle has managed its acquisitions, to good effect."

(Full disclosure: Asay is part of El Reg's Open Season team.)

Adding to the Red Hat grumbles, both the analyst and bogger reckon that SVP of marketing Tim Yeaton has left Red Hat for a start-up.

Maynard also found time in his note to malign the Red Hat Exchange (RHX) - an online watering hole for open source software tied to RHEL. He says there's not much in the way of adoption going on with the site. We've documented RHX's woes at length, covering both lack of interest and licensing issues, so Maynard's criticism comes as little surprise.

Asay, also an exec at open source CMS maker Alfresco, happens to take part in RHX and is stilling willing to give the effort more time.

"We have continued to work with Red Hat on a range of opportunities related to RHX and I continue to be optimistic," Asay wrote. "Red Hat has been very flexible in re-engineering RHX in response to market demand. Is it perfect? No. But from where I sit I can see a lot of work to improve it, and the customer interest to indicate the changes are moving in the right direction."

Blood bath flowing over the edges of the tub, Maynard delivered one last kick to the groin over Red Hat's failure to buy Zimbra for a ridiculous price ahead of Yahoo!. "Yahoo! acquired Zimbra for $350 million thereby squashing one of the more interesting product line extension and growth strategies for Red Hat."

Fetishize email much?

In the end, Asay holds out hope for Red Hat's apparent coming transformation.

"I'm more sanguine. While now is no time for Red Hat to rest on its laurels - its market keeps getting more and more competitive - it's also no time for panic. The company has, on the surface, an incredibly powerful story, with the market-leading Linux distribution married to the market-leading middleware stack. Now it just needs to ensure that everyone internally is aligned." ®

Build a business case: developing custom apps

More from The Register

next story
KDE releases ice-cream coloured Plasma 5 just in time for summer
Melty but refreshing - popular rival to Mint's Cinnamon's still a work in progress
Leaked Windows Phone 8.1 Update specs tease details of Nokia's next mobes
New screen sizes, dual SIMs, voice over LTE, and more
Secure microkernel that uses maths to be 'bug free' goes open source
Hacker-repelling, drone-protecting code will soon be yours to tweak as you see fit
Mozilla keeps its Beard, hopes anti-gay marriage troubles are now over
Plenty on new CEO's todo list – starting with Firefox's slipping grasp
Apple: We'll unleash OS X Yosemite beta on the MASSES on 24 July
Starting today, regular fanbois will be guinea pigs, it tells Reg
Another day, another Firefox: Version 31 is upon us ALREADY
Web devs, Mozilla really wants you to like this one
Cloudy CoreOS Linux distro declares itself production-ready
Lightweight, container-happy Linux gets first Stable release
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.