red hat reality check

First, the good news: Red Hat’s latest quarterly financial results suggest the company is firing on all cylinders — with quarterly sales and profits up 20 percent year over year. Plus, channel partners now generate roughly 60 percent of Red Hat’s revenues. So far, so good.

The news potentially gets better when you look at Red Hat’s product pipeline. CIOs continue to embrace both Red Hat Enterprise Linux (RHEL) and JBoss middleware as low-cost alternatives to closed-source options. And Red Hat seems quite serious about making Red Hat Enterprise Virtualization (RHEV) a true alternative to VMware vSphere and Microsoft’s Hyper-V.

Overall, Red Hat’s Enzweiler wants partners to focus on three key opportunities:

JBoss Challenges

Enzweiler sounded upbeat during the Red Hat Summit. But he conceded Red Hat’s partner program isn’t perfect. The biggest challenge likely involves JBoss, since Red Hat has its own JBoss consulting team — which the company acquired in 2008.

Red Hat’s internal consultants met with channel partners last week, in an attempt to listen to ongoing channel conflict concerns. Enzweiler says many of the concerns have been mitigated but he concedes: “It’s like taking lifetime dancing lessons; we’re not going to be perfect but we’re going to keep showing up for the lessons and keep trying to improve.”

Virtualization Opportunities

In stark contrast, it sounds like Red Hat has no plans to launch our acquire a major virtualization consulting team. As a result, the RHEV market represents a prime cross-sell and up-sell opportunity for Red Hat’s existing Linux partners, Enzweiler says.

Red Hat’s virtualization pitch is pretty simple: The company claims RHEV is more scalable and lower cost than VMware. But Red Hat concedes it has to improve the management tools surrounding RHEV. It sounds like Red Hat eventually hopes to leapfrog VMware with a potent combo (the forthcoming RHEL 6 and RHEV 2.3 releases) over the long haul.

But VMware certainly isn’t standing still, and that company has plenty of channel support behind it…

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