Red Hat – 2011 TMMBA International Study Tour Company Visit

Open Source on a foggy morning – a conversation with a Red Hat

As our tour bus waggled its way out of München and towards the Red Hat European headquarters at Grasbrunn I thought about Cloud Computing.  I glanced out the bus window towards the direction of the sky but saw no clouds.  It was fog, fog and more fog.  After attempts to figure out how clouds compute I suffered a mini brain aneurism and decided to stop thinking because I was certain all would be explained at Red Hat.  The fog was going to break and the day come back with clouds, sky and such.

 A building emerged from the fog.  Upon our arrival at Werner-v-Siemens-Ring 11 a man in a black sweater wearing a red hat greeted us.  The mystery deepened amidst the fog.  Who is this man and why is he wearing a red hat?  I expected to be lead to a smoke-filled room illuminated by nothing but a single hanging light bulb.

 We followed the man in the red hat up three flights of stairs in a monotone building and promptly sat down in a neutral-colored conference room.  The man in the red hat was an energetic and polite fellow: imagine Waldo (from Where’s Waldo?) wearing a black sweater and red hat.  As it turned out, the man was Jan H Wildeboer, the Evangelist of Open Source Affairs with Red Hat.

 Red Hat was founded by Richard Stallman, Lawrence Lessig and Linus Torvalds.  The mission of Red Hat is being both the keeper and collaborator of Open Source code.  Their current market capital is about $8 or $8.5 billion with $1 billion in revenue.  They do not have capital assets but consist of people resources.  They have 25 APAC sites, 35 EMEA sites with the rest in the US.

The process of acquiring Open Source code begins with an open source community of roughly 100,000 projects.  After rounds of selection and stabilizing these projects, selected projects are funneled to Red Hat.

The main advantage of using Open Source is that most of the technologies are well established, mature and proven for enterprise use.  It is easy for an enterprise to expand their use of open source to help them grow.  Open Source technologies are cost-effective because of the low cost of entry across the hardware, administration and software.  Finally, they are both flexible and secure because there are no vendors to lock-in and it’s easy to integrate.

 Red Hat’s business model is to sell “boxes” or available Open Source codes to clients and charge subscription fees.  The subscription fees ensure the clients receive updates when available.  Otherwise the clients are free to terminate the subscription at any time and customers can tailor their own development needs.  Red Hat called this low cost, high value computing.

 Red Hat’s value propositions for the clients include matching the right products for each client’s business needs.  Their product’s level of scalability and availability has been proven across enterprises and enterprise classes.  Most importantly, Red Hat staff provides expert front-end client training followed by continuous support, forming a consultancy relationship with clients.

 Luckily, a brave individual (let’s call him “Satyen” to protect his anonymity) asked Jan, “Wow, this is very cool but what about Cloud Computing?”  Jan shrugged his shoulders and replied, “It’s just a generic term.”  He went on to explain that Cloud Computing is “simply” computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services.  Okay the conversation ended with me experiencing a second aneurism with near cardiac arrest. 

 As we silently proceeded down the gray stairwells I again wondered what exactly Cloud Computing was again?  Perhaps it didn’t really matter as Jan had advised.  What really matters are the principles Red Hat was founded upon:  Creating a community where developers and enterprises can share tools.  But this community is nevertheless fragile and can only be maintained as long as there is mutual trust between parties.  Red Hat has vowed to remain true to its calling (like a crime novel detective) and continue to differentiate themselves from other corporations like Microsoft, SunMicro or Oracle (somehow always the villains of an unending story).

 Our tour bus waggled itself back onto the main road.  I turned and looked out the window and the Red Hat HQ was already fading into fog, with the exception of a hint of red still visible in the distance.  Again I looked to the sky in search of a cloud or two but the day turned out to be sunny and blue.