Red Hat has been transforming itself into a major player in the cloud market. Red Hat has made hybrid cloud technologies a key focus area for their growth. Its hybrid cloud offerings are based on Red Hat OpenShift for Platform-as-a-Service (PaaS) and Red Hat OpenStack for Infrastructure-as-a-Service (IaaS). Red Hat reports revenue under two broad operating segments: infrastructure-related offerings and emerging technology offerings. Historically, Red Hat has been, what many would consider, a purely Linux Operating System shop. They have and continue to generate a substantial percentage of their subscription revenue from their Linux Operating System business. But, their Application Development related business has been accounting for a greater share of the total revenue. In fiscal years 2014, 2015 and 2016, this division accounted for 10.8%, 13.2% and 15.7% of the total revenue.
In 2012, when CFO spoke with Red Hat finance chief Charlie Peters, the company essentially had a single significant product offering, the operating system Red Hat Enterprise Linux. Five years later, the company is neck deep in its transformation to a company with a burgeoning position in cloud-platform technologies. We recently spoke with the current CFO, Eric Shander, about the changes at Red Hat, his role, and the transition within many industries to next-generation technology platforms. "At the time you spoke with Charlie, the company had just started investing in its emerging technologies," says Shander. "Now that those are really starting to take hold, what's interesting is how the conversations with our clients are evolving. We're no longer talking to just lower-level infrastructure managers. Predominantly we're speaking to CIOs, but we're also talking to the businesses, and I've met with some CFOs. They want to understand not only the technology, but also how digital platforms are taking hold across different industries. Historically when we sold something, we moved on to the next client. But with our new technologies, it's much more of a strategic, long-term relationship. What we're seeing is that a lot of customers are embracing multiple technologies. In fact, among our top 100 customers, 99 are consuming two or more of our technologies."
How does someone go from being a history major to running the division in charge of Red Hat Enterprise Linux (RHEL)? Denise Dumas, vice president of engineering, responsible for the operating systems platform, has had a quirky path to success, which includes the development of two critical operation platforms now used by more than 90 percent of Fortune 500 companies. In 2014 when Docker hit the market, she knew RHEL needed an overhaul to enable it to work with this new product. Her team created and deployed RHEL Atomic Host, an integrated infrastructure platform designed for containerization. During the build of RHEL Atomic Host, Dumas adopted agile methodology and moved release cycles from six-nine months to every six weeks. "This approach gave the very fast-moving content a good solid dependable foundation and yet enabled us to bring new features to market both efficiently and at the speed that customers demanded," she explained. Both of these releases garnered her Stevie awards, topping out with the crowning Lifetime Achievement Award bestowed in 2016. Her current project is building a more flexible operating environment in the RHEL operating system, with the aim of giving customers a greater choice in managing the different layers of their software stack.
Red Hat Boston office head and company EVP Paul Cormier talks about U.S. President Donald Trump's policies and their impact on the company. Plus the evolution of greater Boston's tech businesses.
Businesses spend a huge wad of cash every year on tech. They'll dole out $3.5 trillion in 2017 alone, according to Gartner. Here's a shout-out for the 52 people shaping the multitrillion-dollar world of enterprise tech in 2017. At number 23 is Jim Whitehurst, CEO, Red Hat. Jim Whitehurst has been CEO of Red Hat for a decade, leading it to become the first and only multi-billion dollar open source software company. Whitehurst makes sure Red Hat is always in front of the up-and-coming tech. For instance, he was an early supporter of containers. This year, Whitehurst has pushed Red Hat into a unique niche of cloud computing, a service that combines containers and cloud app development in one fell swoop. Red Hat, which had $2.4 billion in annual revenues for fiscal year 2017, is still the leader in Linux, too, the most popular operating system that owns the data center.