Red Hat’s Top 4 Priorities for 2013: Cloud, Virtualization, And…
What are Red Hat‘s top four priorities for its fiscal year 2013? Sure, driving adoption of key technologies (virtualization, cloud and storage) is one top priority. But what are the other “big three” focus areas? And where do channel partners fit into the Red Hat (NYSE: RHT) conversation? Here are some clues, plus questions The VAR Guy will ask Channel Chief Roger Egan during CompTIA Breakaway (July 30-Aug. 2) in Las Vegas.
Red Hat’s fiscal year 2013 runs from March 2012 through Feb. 28, 2013.
Top Four Priorities
According to an SEC filing, the company’s top four priorities for the current fiscal year involve generating:
1. widespread adoption of Red Hat enterprise technologies, including virtualization, cloud and storage technologies, by users globally;
2. increased revenue from our existing user base by renewing existing subscriptions, converting users of free versions of our enterprise technologies to paying subscribers, providing additional value to our customers and growing the number of open source enterprise technologies we offer;
3. increased revenue by providing additional consulting and other targeted services; and
4. increased revenue from channel partner relationships, including original equipment manufacturers (“OEMs”), IHVs, ISVs, cloud computing providers, value added resellers (“VARs”) and system integrators, and from our own international expansion, among other means.
Hmmm… now let’s dissect each one of those goals, and prep some questions for Egan.
Goal One Analyzed: Expand Enterprise Technology Sales
The company has pushed far beyond its core Linux business. Indeed…
- Red Hat Enterprise Virtualization (RHEV) is built into the company’s Linux platform. RHEV is based on KVM (kernel-based virtual machine), an open source hypervisor. CEO Jim Whitehurst has previously predicted that RHEV will leapfrog VMware, much in the way that Linux leapfrogged Unix a decade ago. So far, VMware continues to hum along.
- Red Hat Storage is both a private cloud and public cloud play — potentially allowing partners to shift storage workloads on-premises and off-premises.
- Red Hat’s cloud technologies are CloudForms (for building and managing self-service systems and applications in the cloud) and OpenShift (platform-as-a-Service, orPaaS).
Questions for Egan:
- Virtualization: Last year Egan mentioned 400 professionals were certified on RHEV. Has that figure grown, and is Red Hat gaining ground on VMware? Also, is the company running into Citrix XenServer and Microsoft Hyper-V in the market? What makes Red Hat unique amid all those rivals?
- Storage: Red Hat made an acquisition to get into the storage market. Are channel partners now trained on the platform?
- Cloud: It’s getting pretty darn crowded in the cloud market, where platforms like OpenStack, Amazon Web Services, Windows Azure, CloudStack, VMware Cloud Foundry and more are competing for IT’s attention. Can CloudForms and OpenShift stand out in that crowd? How?
Goal Two Analyzed: Upsell Existing Customers
The VAR Guy has already pointed out that Red Hat’s top competition likely is CentOS, the free alternative to Red Hat’s subscription-based software.
Question for Egan: Are there specific sales pitches that channel partners should use when trying to shift CIOs, IT departments and cloud services providers (CSPs) from CentOS to paid, subscription-based Linux?
Goal Three Analyzed: Additional Consulting, Services Revenues
Mid-size and large enterprises can certainly use consulting services tied to JBoss middleware, storage, virtualization and Red Hat’s other technologies.
Question for Egan: But how will the company balance its own consulting services with those of channel partners?
Goal Four Analyzed: Increase Revenues From Channel Partners
The VAR Guy believes roughly 50 percent to 60 percent of Red Hat’s annual revenues (now above $1 billion) involve channel partners. It’s good to see a mix of traditional partners (VARs, OEMs, ISVs) and emerging partners (cloud computing providers) on the company’s radar for growth.
Question for Egan: Is there an opportunity for the partner base to increasingly earn monthly recurring revenues? Also, are there preferred cloud providers that Red Hat VARs should engage?
Got an additional question for Egan and Red Hat? The VAR Guy is all ears. Post a comment or email a question… if you’ve got our anonymous blogger’s email address.