Red Hat State of the Union

December 20, 2013

Jim Whitehurst, president and CEO, Red Hat

As we close out the 2013 calendar year, I’m incredibly proud of all this company and our associates have accomplished in the last year, and quite optimistic about the year ahead. As I’ve done in past years, I thought I’d reflect a bit on some of our accomplishments, and share my thoughts for our future.

Red Hat continues to grow and scale, meeting growing global interest in open source by enterprise customers and partners. As of our earnings call yesterday, Red Hat has had 47 sequential quarters of revenue growth. Last year at this point, we had more than 5,300 employees with approximately 70 worldwide offices. Today, with office expansions in places such as Beijing; Brno, Czech Republic; Raleigh, N.C; Santiago, Chile; and Westford, Mass., Red Hat is ending 2013 with more than 6,000 employees and nearly 80 global offices.

In a turbulent global economic environment, our continued growth is an accomplishment I am proud to share, as I see it as a direct reflection of our associates’ hard work and the industry momentum Red Hat has established. As we grow our employee base, I’m also proud that Red Hat continues to receive industry recognition as a “best place to work.” Those honors are a direct reflection of the unique culture we’ve worked so hard to cultivate. We’re recruiting the technology industry’s best and brightest, which is translating into solution innovations and industry leadership.

Beyond our continued business growth, I’m proud that 2013 will go down as the year Red Hat established industry leadership in OpenStack and Infrastructure-as-a-Service (IaaS). We’ve put a stake in the ground as the leading corporate contributor to OpenStack in both of the last two community releases. Our work with OpenStack is a perfect example of how catalyzing a community is in our DNA. We didn’t start off with a broad public declaration. We started by doing what Red Hat does best – contributing, getting our hands dirty and getting to work. That’s what Red Hat has always done when it comes to the open source community, and what we will continue to do.

Beyond our work in the OpenStack community, we’ve established Red Hat as an enterprise OpenStack leader. In June 2013, we introduced Red Hat Enterprise Linux OpenStack Platform to much industry excitement, and we’re optimizing the rest of our portfolio for OpenStack – including our hybrid cloud management solution, Red Hat CloudForms, Red Hat Storage, and OpenShift by Red Hat, our Platform-as-a-Service (PaaS) offering. In less than a year, we built the world’s largest ecosystem for commercial OpenStack deployments. And just last week, we announced a significant collaboration with our longtime partner Dell to jointly engineer enterprise-grade private cloud solutions based on OpenStack. Thinking back to the earliest days of enterprise Linux, it was building an ecosystem of this same magnitude that helped propel Red Hat Enterprise Linux to its place as a dominant player in enterprise datacenters.

I’m proud that we’re using what we know about catalyzing communities and making open source projects enterprise-consumable and bringing that knowledge to OpenStack. Over the past few years, I’ve seen many industry pundits publicly wonder “who will be the Red Hat of OpenStack?” In 2013, I think we clearly established that Red Hat IS the Red Hat of OpenStack.

OpenStack is just one example of Red Hat’s cloud leadership in the last year, and how we’re helping enterprise customers around the world in their cloud journey. Both OpenShift and CloudForms made significant advancements in 2013, earning major industry accolades along the way. I hear excitement when I talk to customers about our open hybrid cloud vision and how we can help them on-ramp to cloud with our new Red Hat Cloud Infrastructure offering. Red Hat Enterprise Linux, Red Hat JBoss Middleware and Red Hat Enterprise Virtualization, each continue to show their strength in the market and provide an ideal foundation for the cloud.

As I talk to customers about cloud infrastructure, they see open source not as just a viable alternative – which was the case in the client server era - but as a default choice, particularly for both IaaS and PaaS. I feel like Red Hat has also hit a more strategic stride with our customers. Just in the last year, I’ve gone from talking to heads of infrastructure about their technology needs to talking to CIOs more broadly about the future direction of IT.

I believe 2014 is going to be a defining year for the technology industry. This will be the year when cloud architectures go from experimentation to deployment, where big data goes from promise to production, and when we get our first glimpse at how these innovations could potentially change our world. There have been many Web 2.0 companies that have been using big data for some time now. I love that almost every ad I see online is relevant to me because it’s taking my search history into account. But, we haven’t seen as many mainstream corporate companies tap that same power. That’s about to change, and in ways that will fundamentally impact us all. For example, I recently spoke to a healthcare company that believes big data could help them substantially improve the lives of their patients. From identifying risk of diseases before they occur to best utilizing treatments, the possibilities are endless.

What’s more compelling to me is open source played a key role in the development of all of these emerging technologies – from cloud to big data to social to mobile. This marks a truly fundamental shift in how technology is created and consumed, and today’s technology landscape would look dramatically different without open source. It is a proud moment for us at Red Hat and the broader open source community to be able to say that open innovation has truly surpassed proprietary innovation.

While we’re still in the early days in the fundamental shift I describe above, I’m proud that Red Hat is a leader helping to drive the next era of technology. I wake up every day excited about Red Hat’s potential, and we’re working hand-in-hand with our partners and customers to deliver on the power of open source innovations.

As we enter 2014, Red Hat is not resting on our laurels. Here’s to another exciting year collaborating with our partners, customers and the open source community to drive the future of IT.

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