Friday Five — December 2, 2016

Red Hat generates $2 billion in annual revenue but, by its CEO's own admission, that's not nearly as much value as it gives away. In a recent interview, Red Hat CEO Jim Whitehurst likened his company to a machine tool manufacturer in the Industrial Revolution–a company that does well, but not nearly as well as the companies that put those machine tools to use to build, for example, cars. "Open source basically has become a place where user-driven innovation happens in software." This is particularly pronounced at the infrastructure layer, leaving plenty of room for proprietary innovation at the application layer, as Whitehurst said, "most infrastructure is going to be open source and most business functionality above it is going to be proprietary." Intriguingly, Whitehurst seemingly admits that the latter is a much more lucrative market. The company will deliver far less revenue than the companies it helps to enable. Somehow, I don't think it will cry over the loss. For a company as committed to enabling open source infrastructure as Red Hat, real success isn't a revenue goal, but rather the revenue it enables in others.

Is Kubernetes the best orchestration tool? Red Hat thinks so. Here's what Brian Gracely, Red Hat's director of Product Strategy, had to say in a recent interview about its features and performance. The tool's main selling points include the following: The Kubernetes community is "meritocratic". In this regard Gracely was distinguishing it from Swarm, Mesos, CloudFoundry and other alternatives, which he regards as "vendor-driven" projects. It can also support a large number of applications. This has been a talking point for the Kubernetes community since the spring, when it announced the tool could run more than 1,000 nodes. And any Linux application can be containerized and run directly on Kubernetes.

Bain & Company and Red Hat released the results of joint research aimed at determining how deeply enterprises are committed to digital transformation and the benefits these enterprises are seeing. The research report, For Traditional Enterprises, the Path to Digital and the Role of Containers, surveyed nearly 450 U.S. executives, IT leaders and IT personnel across industries and found that businesses that recognize the potential for digital disruption are looking to new digital technologies–such as cloud computing and modern app development–to increase agility and deliver new services to customers while reducing costs. Yet, strategies and investments in digital transformation are still in their earliest stages. For those survey respondents that have invested in digital, the technology and business results are compelling. Bain and Red Hat's research demonstrates that those using new technologies to digitally transform their business experienced: increased market share, delivery of better products in a more timely fashion, and more streamlined development processes, more flexible infrastructure, faster time to market and reduced costs by using containers for application development.

There's a vital need for IT to be relevant to the business. Technology has always evolved and will continue to evolve. However, it is important that enterprises adopt technology with sound business context rather than adopting it purely for technology's sake. In the brave new digital world we live in, innovative adoption of technology can also be a prime vehicle for enterprises to differentiate themselves from their competition. Red Hat Innovation Labs brings together the business of the enterprise, the technology of Red Hat and the culture of open source. It does this with a residency-style engagement designed to help customers address their business challenges in an accelerated fashion using open source technology in an environment that drives open communication and germination of ideas. At Gartner Symposium, Red Hat chief regional solutions architect E.G. Nadhan presented these ideas along with demonstrating how the infrastructure for the Red Hat Open Innovation Labs can be set up by pushing a single button after selecting the components you need.

Some of the industry's most innovative concepts would not have arisen if not for the principles and acceptance of opensource. But is opensource all good? "People have been using opensource as a marketing tool to date, and just because your put a bit of open code out there into the world doesn't mean it's opensource," said Angel Diaz, IBM's VP of Cloud Technology & Architecture. "If you don't have a community around it or you don't have a meritocracy on how the code evolves, it's like putting garbage on the kerb and no-one coming to collect it, because they don't care. Customers are just as locked in to this code because the company is the only one who controls its development." Community consensus is a wonderful thing and can aid companies in making decisions, but sometimes the community will decide what it wants on a very human level. It will think about what is right, right now, as opposed to what is right in two to three years' time. Says Darrell Jordan-Smith, VP of Worldwide Sales at Red Hat. "We (Red Hat) don't aspire to be the captain and control the direction, because that's not how opensource works. We want to be good stewards of opensource and influence the community to get better decisions and products made."