Red Hat’s EMEA Partner Conference takes place in Frankfurt, Germany this week and the buzz of the open source community has been loud. As demonstrated by iconic partnerships throughout history – Batman and Robin, Ben & Jerry, rock ‘n’ roll – more often than not, the whole is greater than the sum of the parts, and this week’s conference is the perfect place to see how Red Hat's work with our partners all comes together, and a good moment to reflect on where we’ve come from and where we’re headed.
The synergistic power of community collaboration runs through the DNA of Red Hat and is at the core of everything open source; consequently partners have always been fundamental to our business. Channel sales as of the close of our fiscal quarter on August 31, 2015 accounted for 75% of our business, up from 69% from the same time last year, and we are continuing to do business with our partners, making progress toward our annual goal of a 70/30% split for channel and direct sales.
The relevance and growth of open source is reflected in our own development as a company: from humble beginnings in 1993, we’ve had 54 consecutive quarters of revenue growth as of the close of our fiscal quarter on August 31, 2015 and, became an open source software company with a billion dollars in annual revenue in 2012. Open technologies are becoming increasingly relevant as the world shifts from vendor-driven to user-driven progress – at the heart of innovation occurring in emerging fields such as big data, containers, cloud and mobile, is open source.
And if you’re in open source, Red Hat can be a good fit. Our commitment is to bring five enablers to partners – innovation, differentiation, growth, profitability and stability. We have a track record of strong growth combined with strategic acquisitions such as Inktank, eNovance and FeedHenry, and bolstered by the launch of new products and services such as Red Hat CloudForms, Red Hat Enterprise Linux OpenStack Platform, and OpenShift.
Red Hat enables the next generation of IT
Reflecting on former glories is not what drives a business forward; in fact, to carry on growing, a business needs to embrace disruptive forces. In its study IDC Predictions 2015: Accelerating Innovation — and Growth — on the 3rd Platform, Chief Analyst Frank Gens states: “We are shifting into a new gear in the industry's adoption of the 3rd Platform, as cloud, mobile, big data, and the Internet of Things — and an exploding number of solutions built on them — will account for one third of all IT spending and 100% of IT growth in 2015.”
The disruptive 3rd platform of cloud, mobile, big data that IDC names is shaking up the established field and it is where CloudForms, Red Hat Enterprise Linux OpenStack Platform, OpenShift, eNovance and FeedHenry fit in, with a view to helping partners and businesses thrive during this change and benefit from innovation. That Red Hat maintains the position of a leading innovator is no accident, it all ties back to our origins as collaborator and partner. The success of open source is closely linked to the wisdom of the crowd where the collective opinion of a group of individuals tends to be smarter than that of a single expert.
Red Hat is seeing interest from partners in becoming OpenStack-ready. To further support them, we recently announced new OpenStack training and certification offerings focused specifically on improving IT professionals’ skills and expertise in Red Hat-distributed OpenStack clouds. And combined with Red Hat’s leadership in OpenStack, the addition of eNovance’s systems integration capabilities and engineering talent has enabled us to meet growing demand for enterprise OpenStack consulting, design and deployment.
We announced the Red Hat Certified Cloud and Service Provider Program in July this year to expand Red Hat's cloud ecosystem to include and better support distributors, managed service providers and other partners that are involved in all aspects of hybrid cloud build-out. The program is designed to encompass a wide range of service provider models across the public cloud through to on-site managed services, thereby offering customers a secure, stable and trusted partner ecosystem upon which to build their next-generation IT projects using Red Hat solutions.
FeedHenry, meanwhile, expands Red Hat’s portfolio of application development, integration, and Platform-as-a-Service (PaaS) solutions, enabling us and our partners to support mobile application development in public and private environments.
With Red Hat, tomorrow brings Growth, Stability and Profitability
Growth, stability and profitability can point towards a sustainable future for any company. As noted, open source is growing fast with plenty of room for further expansion, and since Red Hat is the world’s leading provider of open source software solutions, our brand recognition is strong – which our partners tell us gives differentiation from competitors who focus on a proprietary approach. Red Hat has more than 85 offices in 35 countries worldwide and around 7,900 employees and though size alone does not necessarily deliver for partners and customers, we continue to commit to a three factor advantage for partners.
First is the classic story that still holds true – Red Hat solutions can be more cost effective than proprietary solutions. End customers may be able to free-up more budget for services than would be the case with most proprietary solutions, where they may struggle to come up with the cost of licence and maintenance for the base software they need, and/or the hardware that these solutions require.
Second, Red Hat uses an annual subscription model, which means that customers receive technical and business value over the life of a subscription. Features are delivered through continuous product updates.
Thirdly, Red Hat training helps end customers to get the most out of their Red Hat technologies, putting their teams at the head of the Red Hat technology class with the largest Linux, Red Hat JBoss Middleware, OpenStack, and OpenShift curriculum in the world, designed by those with product expertise.
Over and above our three factor advantage, we aim to provide the most complete support to partners. With the new partner program designed to focus on solution-based portfolios to sell to enterprises, which we announced at the last Partner Conference in 2013, we brought in Red Hat OPEN, our online partner enablement network. Red Hat OPEN is a training and accreditation platform designed to empower partners and supply guidance and technical information that will inform the way they assist customers in making technology decisions. As part of this, the Red Hat Partner Center provides 24/7 access to technical information and training resources. We’re also continuing to live by and reinforce our "sell with partners" model, in which key account managers on our sales team work together with the leaders on the sales teams of our partners to optimise success and strengthen customer relationships.
The continued importance of open source in enterprise computing, combined with the advent of the 3rd platform of disruptive technologies, points towards an ever more collaborative future, which in turn points to the requirement for ever closer ties between partners. We can organise for change by forging the right partnerships for the future now. Red Hat's place in upstream development means we’re consistently at the cutting edge of innovation and we bring this through in our partner program, giving partners business frameworks to invest in, enabling them to deliver what their customers need.