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Red Hat: We CAN be IaaSed about OpenStack cloud

Reorg shows it's not just a Linux company. Again

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10 years after Red Hat got serious on enterprise Linux, the company is re-organised for enterprise cloud.

The Linux distro last week scraped up its Linux, virtualisation, OpenStack and cloud management businesses into a new infrastructure-as-a-service (IaaS) unit.

Also created in the shuffle was an applications platform group responsible for JBoss and OpenShift. The existing storage and big data units continue as before.

The purpose of the reorganisation?

To drive “consistent strategy and story to customers” of a cause Red Hat calls the “hybrid cloud” according to the new infrastructure unit’s chief, Tim Yeaton.

The idea is to sharpen Red Hat’s focus on cloud and to make hybrid cloud easier for customers to comprehend and – hopefully for Red Hat – buy.

Yeaton told us after his appointment he will drive strategy, integration and messaging for the cloud across all its Linux, virtualization and cloud software products.

The last time Red Hat got really, really serious on something was in 2003, and that was when it decided to go all-out on the enterprise - bulletproofing its server Linux and charging companies subscriptions for support. Before that, Red Hat was just another Linux distro loving the desktop which charged the hapless and the hopeless for telephone support - not something that was really scalable.

Beards are the business

10 years on, Red Hat Linux subscriptions have turned Red Hat into a $10bn market-cap company while revenue is running at $1.4bn.

If one thing has helped persuade cynics and entrepreneurs that Linux could be a serious business, it has been Red Hat’s success.

Now Red Hat is looking to the cloud to drive its next decade of growth.

Only this time, in sharpening its focus Red Hat will be helping the very piece of software that it’s betting on for success: OpenStack.

Red Hat wants to leverage the cloud to further its ambitions as a technology provider – just as Microsoft is trying to ensure its future, too.

Red Hat’s shtick is something called an “open” cloud – that is, a cloud without the proprietary or closed APIs used by the likes of Microsoft or Amazon.

Your apps and your data can be taken out or you can build your own.

The foundation is Red Hat Linux and OpenStack. But only one of these is doing well and making tonnes of money. Guess which?

Red Hat revenue grew 15 per cent year on year to $397m in its latest quarter. Compare that to fellow enterprise IT providers like SAP and IBM struggling to eke out two to three per cent software licence growth.

It wasn’t always thus: Red Hat has started making Linux in 1993 but it wasn’t until 2003 that Red Hat got serious and focused on the enterprise – under products and technologies president Paul Cormier - who introduced paid subscriptions.

Red Hat succeeded to such an extent that it pulled Microsoft to heel: enough Windows Server shops were running RHEL by 2005 that Microsoft was forced to support RHEL as a managed guest in its Windows virtual server.

Developers aren't 'focused' on it

OpenStack sprung out of a similar passion, just as Red Hat Linux had done, but unlike RHEL, OpenStack seems to be struggling.

It was supposed to be the Linux for the cloud - open code and license for a project build using a community methodology. But three years on and despite much hype and some success - PayPal runs on OpenStack – OpenStack is failing to break into the enterprise, as Gartner notes here.

Gartner blamed OpenStack vendors' love of technology and failure to relate to the customer.

But the technology is in trouble, too. The project has attracted members across the board with thousands of developers, but they aren't focusing their efforts. The result is an OpenStack with elements lacking crucial stability found in clouds from Microsoft and Amazon.

Yeaton concedes that OpenStack has adoption problems, only he positions it more diplomatically. He sees lots of, er, “pilots” ramping up. “You hear this a lot with our field executives looking at 2014 planning,” Yeaton told The Reg.

Red Hat will continue to its participation in OpenStack. “We will make the platform bullet proof,” he promised.

So Red Hat will increase its focus on OpenStack to the betterment of OpenStack but how does Red Hat help OpenStack into enterprises?

Yeaton reckoned he will put “more resource in the field” to work with customers as they get started on OpenStack. “We are creating teams to help customers define architectures and build out that fabric,” he said.

This isn’t a consulting practice, rather a “cross function set of experts.”

Yeaton will drive product strategy, messaging and devise “solutions” around RHEL, virtualisation, OpenStack and cloud.

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