Q&amp;A: Red Hat&#39;s CEO on his company&#39;s latest acquisition
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OCTOBER 01, 2004  - After his company announced that it&#39;s acquiring security and authentication tools from Netscape Security Solutions to bolster its software arsenal (see story), Red Hat Inc.
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Red Hat's  new chief executive  said on Friday that the company will continue to pursue a  business model under which it makes its software available at  no cost and makes money selling services to businesses.
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(InfoWorld) - The release of Red Hat Enterprise Linux 5 in March should strengthen Red Hat's lead in the open-source software market and fend off challenges from Oracle, Microsoft, and Novell, an industry analyst said. After meeting with Red Hat executives Friday, W.R. Hambrecht & Co. financial analyst Robert Stimson wrote in a research note Monday that he is "confident that Red Hat will remain the premier Linux player despite recent competitive hoopla." Red Hat's stock price declined in October 2006 whenÂ Oracle announced it would undercut Red HatÂ on the price of support for Red Hat's open source Linux distribution. That was followed in November by news ofÂ a collaboration between Microsoft and Novell. Microsoft said it would work with the Linux distributor to make Windows interoperable with SUSE Linux. Microsoft said it will also help market SUSE to its customers. While those developments caused Red Hat's stock price to dip below $15 a share, from $27 before the news, they "have had little to no effect on Red Hat's underlying fundamentals," Stimson wrote. Red Hat stock closed Monday at $22.54. Hambrecht forecasts Red Hat to finish fiscal 2007, which ends Feb. 28, with earnings per share of $0.51 on revenue of $401.6 million, up from $0.39 a share on revenue of $278.3 million in fiscal 2006. Expected new features of Red Hat Enterprise Linux 5 include an integrated server and storage virtualization capability that should be competitive with industry-leading virtualization software from VMware, Stimson said in an interview. Red Hat 's virtualization software uses just 3 percent to 4 percent of a server's CPU to run, versus 20 percent or more for VMware, he said. That makes Red Hat better able to run multiple software applications on one physical server. Stimson considers the competition from Oracle and Microsoft/Novell "a nonevent so far" as he's seen little evidence that Oracle is winning support business away from Red Hat. Oracle did not reply to a request for comment. Stimson has seen a "backlash" in the open-source community to the Microsoft/Novell arrangement. He noted that all five members of a Novell software development team quit Novell after the Microsoft deal was announced, and four of them went to Red Hat. They were working on the Samba Project, developing an open-source file and print server software product than can run on a Windows operating system. "I think (Microsoft/Novell) is tainted now because I think they are violating [the] GPL," said Jeremy Allison, the fifth member of the team to quit Novell in December 2006. He went to Google but emphasized that he was not speaking for Google on this subject. GPL stands for General Public License, the contract that keeps open-source software open. Analyst Stimson said the Microsoft/Novell partnership has only strengthened Red Hat's position in the market because of the reaction from others in the open-source community.
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Red Hat Inc.  Chief Executive Matthew Szulik said his company last year held talks with Microsoft Corp  over a patent agreement that broke down before the software giant signed a deal with Red Hat rival Novell Inc .
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Though its next official full release is still months away, enterprise Linux player Red Hat (Quote, Chart) is rolling out the latest incremental update to its Red Hat Enterprise Linux (RHEL) 3 product.
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The Story: Sun Microsystems has been in and out of the (metaphorical) grave more often than Count Dracula. The one-time king of the Internet servers suffered a body blow when the dot-com bubble burst, and since then it?s been a struggle to keep the company?s name on the buy lists of enterprise IT shoppers. That struggle has been chronicled by endless stories in the trade and financial press with headlines featuring bad puns like ?The Sun is setting.?                                                    Those days are finally, if quietly, coming to a close.[ Slideshow: 2007's top underreported tech stories ]In less than two years in the CEO?s chair, Jonathan Schwartz has put the company firmly in the black and, after years of bleeding, resuscitated Sun?s flagging software business and storage businesses, and put together a product road map that Morgan Stanley analyst Katherine Hubert calls its strongest in years.?You have to credit Schwartz because he understands the way to combine hardware and software,? says Bud Mathaisel, CIO of outsourced-IT provider Achievo. ?Although Sun?s image slipped from public view, they were making very competitive technology and pricing.?Sun?s line of Galaxy and blade servers are hits across a wide swatch of businesses, and its storage business is growing. Sun has already entered the market for quad-core servers (while rival AMD?s Barcelona remains problem-plagued), and in the next year or so Sun will roll out new server, storage, and networking products. Also, Sun acquired SeeBeyond in August 2007, a $387 million buy that positions Sun to become a vendor of choice in the race to provide the integration tools needed to support enterprises? SOA strategies.The powerful new hardware lineup, plus the enterprise service bus that came with SeeBeyond once again makes Sun core to the datacenter.Not all of the credit goes to Schwartz, of course. His predecessor, cofounder Scott McNealy, poured hundreds of millions into R&amp;D in the dark days of 2002 and created the UltraSparc T1 (or Niagara), the server chip that?s keeping Sun competitive with larger rivals IBM, HP, and Dell.What?s more, McNealy had the foresight to bring back hardware wizard Andy Bechtolsheim in 2004. Bechtolsheim led Sun efforts to design the AMD Opteron-based Sun Fire x64 servers ? better known by their code name ?Galaxy? ? that were key to Sun?s datacenter reentry.The Bottom Line: Sun?s transition from leader to laggard and back to contender has been very painful, particularly because of the deeps cuts in personnel Sun has been forced to make. But the numbers ? four profitable quarters in a row plus record margins ? as well as a growing list of wins, point to a company on the upswing. Sun may not be at the top of everybody?s vendor list, but once again, it?s worth your consideration.Complete list of 2007 underreported tech stories: 1.? Java is becoming the new Cobol 2.? Sun Microsystems is back in the game 3.? Hackers take aim at Mac OS X 4.? There are some threats you can worry less about 5.? Companies may have found a way around H-1B visa limits 6.? Open source?s new commercial strategy 7.? End-to-end Ethernet finally arrives 8.? Blade servers arrive for the masses 9.? BI is dead; long live BI 10. Balance of power shifts to software buyers
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Red Hat Inc.  Chief Executive  Matthew Szulik said his company last year held talks with  Microsoft Corp  over a patent agreement that broke down  before the software giant signed a deal with Red Hat rival  Novell Inc .
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CEO still eyeing AMD. Also: Server maker unsheathes new blades and a software pact with Microsoft.
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Red Hat Inc. RHAT.O, a Linux  software distributor that in July said it would restate three  years' of financial results, on Thursday named Charles Peters  as chief financial officer.
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(InfoWorld) - The president of virtualization software leader VMwareÂ on Wednesday questioned the strategy of rivals that are integrating virtualization functionality into their operating systems. Diane Greene made the comments at the third and final day of the Morgan Stanley Technology Conference in San Francisco. VMware, a subsidiary of storage vendor EMC, doubled revenue in EMC's latest quarterly report, compared to the year ago quarter, as enterprises embrace VMware's virtualization software to make more efficient use of the servers in their data centers. Rivals such as Red Hat and MicrosoftÂ have responded to VMware's dominance by integrating virtualization into coming new operating systems. Red Hat isÂ introducing Red Hat Enterprise Linux 5Â next week and Microsoft's new Windows server OS is due later this year. But Greene, in discussing virtualization with analysts for the investment firm, said she wonders how effective the competition's virtualization features can be. "Traditionally, the operating system manages the hardware and manages the application. Once you virtualize with a hypervisor, that is now what is managing the hardware, not the OS," Greene said, in a presentation that was distributed via webcast. "Now the operating system is just managing the application. So certainly Windows and Red Hat are moving to integrate virtualization into their OS, but part of the value proposition seems to be lost when you do that." Spokespeople for Red Hat did not respond to a request for comment, but a spokesman for Microsoft said its OS easily supports virtualization. "Resource management has always been part of operating systems. Today, vendors such as Sun, Novell, and Red Hat incorporate virtualization into their operating systems," wrote Patrick O'Rourke, a senior product manager for Windows Server, in a prepared statement. "We are making investments across Microsoft to offer our customers a complete set of virtualization products from the desktop to the datacenter. All assets, both virtual and physical, [are] managed from a single platform." VMware is a strong contributor to the earnings of parent company EMC, which also sells storage hardware and security software. Greene also is executive vice president of EMC. Revenue for VMware increased to $232 million in the fourth quarter of 2006, 101 percent more than a year prior. The growth comes from increased demand for VMware Infrastructure 3, a virtualization software suite for servers and storage networks. VMware's growth prompted EMC to recently announce plans toÂ spin off 10 percent of VMwareÂ in an initial public offering of stock. EMC executives said they anticipate releasing the prospectus later this month for the IPO, expected about midyear. Greene noted the stock sale will benefit VMware employees as well as potential shareholders. "Our stock-based compensation will track our performance and that is the ideal model," she said. Also at the Morgan Stanley conference, Greene acknowledged that virtualizing servers, which helps them use more of their designed capacity, may suppress server sales growth. But she said many customers are upgrading servers as they introduce virtualization into their operations. Those new servers are more high-end products, with greater processing power, and should yield higher margins for server vendors. EMC reported fourth quarter 2006 financial results Jan. 23, posting net income of $389 million, or $0.17 a share, on revenue of $3.21 billion. It edged out analysts estimates of $0.16 a share.
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Red Hat on Thursday named Charles Peters Jr. as executive vice president and chief financial officer. Peters replaces Kevin Thompson, who unexpectedly announced his resignation in June, a few days before the
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Sun Microsystems Inc.'s combative chief executive, Scott McNealy, fresh from resolving his long-running quarrel with archrival Microsoft Corp. , has found a new target for his wrath: Linux software maker Red Hat Inc.
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CEO weighs in on Linux, EU regulators, music pirates and "bad people out there in cyberspace."
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Having established itself as the leading enterprise Linux vendor,&#160;Red Hat is in a pivotal phase of reinventing itself as a broader open-source software provider and a long-term technology leader a la Microsoft and Oracle. It&#39;s a tall order, and among other things it will take a business plan that lets the company move smoothly through this make-or-break stage.Coming up with that internal plan lies on the shoulders of 30-year IT veteran Nick Van Wyk. Van Wyk joined Red Hat last year from EMC, taking a newly created role as vice president of operations to optimize Red Hat&#39;s subscription model and create better business processes to support the company&#39;s channel.Two weeks ago, Red Hat also appointed him to a new role as senior director, transformation, in charge of examining the company&#39;s internal processes and operations to &quot;reposition all of our systems to support the next stage of our evolution,&quot; he said.That stage includes capitalizing on its April 2006 purchase of JBoss and the open-source middleware package that comes along with it, as well as growing from a company with annual revenue of about $500 million to a billion-dollar company. Red Hat, whose affections toward other vendors can be fickle, also is challenged to build out a stronger ecosystem of partners to support not only Red Hat Enterprise Linux OS but also JBoss and any new technologies it brings to the table.In the current technology business climate, Red Hat is a bit of an anomaly. The company has managed to exist for nearly 10 years with one core competency: a Linux server distribution it supports and provides maintenance for. The company has branched out into other areas of software, such as desktop Linux and virtualization, but for the most part, the server OS has been its bread and butter.Recognizing it can&#39;t subsist long on this diet in an environment of consolidation and diversification, Red Hat made a calculated risk and purchased JBoss. It&#39;s now trying to position itself to make the most out of that and possible other new product developments or purchases, Van Wyk said.&quot;As we move forward, we will more be described as an open source services and solutions company,&quot; he said. &quot;That&#39;s an enhanced position for Red Hat.&quot;In its present situation, Red Hat has &quot;a base, a critical mass of applications from which to grow,&quot; said George Weiss, vice president and distinguished analyst at Gartner. But investors are more interested in what comes next than in how well Red Hat is currently executing, he said.&quot;It&#39;s not a look at the present basis, it&#39;s what you can do to instill market confidence that you have a sufficiently scalable business model, and the operating system alone is not going to be it,&quot; Weiss said.Van Wyk knows full well the pressure on the company, and said that during Red Hat&#39;s two-to-three-year transformation, the company will be making changes to ensure it can meet both the internal and the external needs of scaling an IT company.The company is currently examining how it handles a host of functions, among them lead management, partner relationship management, subscriptions, financial systems and technical support. The next step in the transition will be to make changes where necessary to ensure the business is operating efficiently and providing the highest levels of customer service, he said.&quot;This whole idea of ease -- the ease of doing business with Red Hat, the ease of support, the automation of those technologies, the time to acquire OS technologies, zero time to subscribe -- those are all built into [our goals],&quot; Van Wyk said. &quot;These are things that have been said to us that customers want to have.&quot;Van Wyk declined to go into detail about exactly how Red Hat will execute on this strategy, saying the company won&#39;t really have a clear idea of the changes it will make until the initial assessment is complete.One thing Red Hat should consider is more acquisitions, said Raven Zachary, open source research director for The 451 Group. But Red Hat should move fast to acquire companies that will help them get into new markets -- such as database and data management -- because larger IT vendors are eyeing similar purchases.&quot;They have companies like Oracle, Microsoft, IBM and SAP competing for the same targets,&quot; he said. &quot;Red Hat doesn&#39;t have the capital to compete with those suitors. They need to move very quickly before we get into an era where the largest IT vendors are competing for these targets.&quot;
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The Motley Fool - Open-source software leader Red Hat (Nasdaq: RHAT - News) reports earnings after the bell today, and analysts are expecting a doozy. With on-again-off-again reports that Oracle (Nasdaq: ORCL - News) may enter the Linux market, Red Hat's stock has certainly been volatile, but management has been quite sanguine about further competition from the database giant. Is this one huge strategic misstep or savvy thinking? Read on for my thoughts.
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What's behind the fallout between Intel and the One Laptop Per Child program; News.com's Stephen Shankland talks with Red Hat's new CEO; and album sales drop in 2007.
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Not a good Q2 Red Hat was grilled by Wall Street today on plans its for JBoss after profits took a nose-dive in Q2.â¦