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Red Hat's off to China with ambitious growth plans

Firm looks to cash in on huge cloud expansion

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Linux software giant Red Hat has become the latest US technology behemoth to talk up the huge potential in the Chinese market, revealing plans to expand its footprint there as it attempts to come good on ambitious growth plans.

CEO Jim Whitehurst told China Daily that he would be putting a greater focus on the People’s Republic, where next generation cloud projects are cropping up all over the place.

"The open-source Linux system is the hero behind the scene. Most of the stock exchange market systems are based on the Linux system," he said.

China is still some way behind the US, Australia and Japan in terms of the revenue it contributes to Red Hat, but this is set to change because organisations there are unencumbered by decades of legacy investments, Whitehurst told the state-run paper.

As the Linux giant looks to ramp up annual sales from $1bn to $3bn within the next five years – an effort which will require 20 per cent CAGR – it plans to target two key areas.

The first is in tapping the enterprise market as it shifts from old Unix systems and storage boxen to Linux kit Linux-led storage. The second target market is building a hybrid cloud ecosystem.

As part of its China push, the firm is apparently adding 100 more customer-facing staff, and will consider opening more offices in the country. It opened a new Beijing office in October and also has one in the financial capital of Shanghai.

Whitehurst’s sentiments echoed those of EMC’s Greater China president Denis Yip, who argued at an EMC Forum event in Hong Kong last June that China is now at the cutting edge of global cloud computing deployments.

China is leading the way, which is strange because this is normally what happens with the US and then China follows – it has been like that for the past 20 years,” he said at the time.

“They are leading because there is no burden. They don’t need to care about old apps because they have none, so they’re building from scratch.”

Another sign of the increasing momentum behind cloud in the PRC was the launch in August of the China Open Source Cloud League (COSCL).

This alliance of Intel, web giant Sina, Shanghai’s Jiao Tong University and local Linux vendor China Standard Software Company (CS2C) is set to drive the OpenStack project in China. ®

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