Red Hat Enterprise Linux – Delivering Ongoing Customer Value

For the past 10 years, Red Hat Enterprise Linux has driven compelling value for our enterprise customers. When you closely examine the concept of value as it relates to Red Hat Enterprise Linux, several interesting phenomena become evident. Namely, value comes from three distinct areas – efficiency gains including cost reduction, innovation, and scale effects. These three areas subsequently fuel one another, resulting in a virtuous cycle.

When Red Hat Enterprise Linux launched in May 2002, it wasn’t long before these core themes of value emerged. First, customers experienced the opportunity to leverage low cost, commodity infrastructure through Linux on the x86 architecture to drive efficiency through the organization. As IT professionals grasped the concept, they implemented platforms based on Red Hat technology throughout their organizations. While the initial benefits may have been Web infrastructure solutions including Web server, DNS, proxy, and caching servers, the value soon extended into other areas. Efficiency gains were also realized through a concomitant benefit of deploying a standardized operating environment that frequently resulted in lower operating costs as a result of the use of skilled resources and higher system up time.1

After realizing these efficiency benefits, enterprise customers began evaluating ways to redeploy the uncommitted budget pools that resulted from their now lower operating and capital expenditures. This budget freedom provided a solution to a painstaking dilemma that had long constrained IT organizations: to invest and innovate, organizations had to free existing resources. There wasn’t any new capital to drive innovation. With Red Hat Enterprise Linux, customers could innovate and explore new approaches facilitated by Red Hat such as community powered open source development and scale out approaches like grid computing. Since its earliest days, innovation has been a core theme and benefit of Red Hat Enterprise Linux.

The ability to innovate resulted in more benefits for customers and helped companies grow and scale their businesses. Organizations scaled through the principles enabled by Red Hat’s architectural approach to IT – modular, scalable, and standardized infrastructure. Business scale drove economies of scale for further cost savings and efficiency gains. This brought the business cycle full circle and once again created opportunities for cost savings which organizations could use to drive additional innovation.

The graphic below illustrates this concept in its simplest form. Red Hat drives value at every step in the process, and it’s part of our core approach to working with customers and delivering value.

Customers can enter the cycle at any point. Take, as an example, DreamWorks Animation. Red Hat helped DreamWorks innovate by creating a massive parallel render farm to enable the order-of-magnitude reductions in processing time to render new animated features. This allowed DreamWorks to scale and deliver additional productions across their new Red Hat-based infrastructure. The ability to scale resulted in efficiency gains through cost savings and time-to-market benefits, and those efficiency gains have presented new opportunities for DreamWorks to innovate with Red Hat.

In the past ten years, Red Hat has facilitated a self-reinforcing feedback loop for our customers: efficiency gains result in investments for innovation, and innovation creates growth and scale, which further reduces costs.

1 IDC, “Understanding Linux Deployment Strategies: The Business Case for Standardizing on Red Hat Enterprise Linux,” available at https://engage.redhat.com/forms/linux-deployment-strategies.