Editor’s note: Jim Whitehurst is chief executive officer at Red Hat (NYSE: RHT).
By Jim Whitehurst, President and CEO
RALEIGH, N.C. – I’m kicking off my third year at Red Hat this month and would like to take a step back as we move into 2010 to reflect on the past year. In keeping with the U.S. presidential tradition of delivering a “State of the Union” address each January, I’d like to maintain a similar tradition at Red Hat and highlight some of our milestones from 2009.
We’ve had an exciting past 12 months and here are just a few of the many things that kept Red Hat busy in 2009:
• Taking on the global recession
Looking at Red Hat’s growth over the past several quarters, many have wondered if we were even aware that the world was in the midst of the worst recession in modern history. Red Hat has grown at double-digit rates in both revenue and headcount throughout the course of the recession. Open source appears to be thriving in a down economy and reduced IT budgets drew many CIOs to take a closer look at open source as a cost-effective solution. Customers continue to turn to Red Hat as we differentiate ourselves from the competition with high value, low cost solutions. This combination is important to customers in not only challenging times, but also robust economic environments.
• Washington embraces open source
When Obama was sworn in last January as President of the United States, he brought the promise of an unprecedented level of openness and transparency in government. Just one day after taking office, Obama issued a transparency memo to all department heads. This memo was followed by several announcements surrounding open source and government. In October, Whitehouse.gov announced its move to Drupal for content management. A few days later, the deputy CIO for the Department of Defense issued a memo clarifying guidance on the use of open source software and its advantages. Finally, we closed out 2009 with the White House issuing its Open Government Directive in December. This move to transparency and openness in government is encouraging for open source software.
• Up in the clouds
The use of cloud computing is growing rapidly as enterprises look to reduce costs and increase their operational flexibility. Red Hat greatly expanded its cloud initiatives in 2009 as open source emerged as a foundational element for both public and private clouds. In June, we announced the Premier Cloud Provider Certification and Partner Program, designed to simplify and expand enterprise customers’ adoption of cloud computing by allowing industry leaders to certify on Red Hat solutions. With the news, we announced that Amazon Web Services had become our first Red Hat Premier Cloud Provider, building on the relationship we formed with Amazon in 2007 to offer Red Hat solutions on Amazon EC2. Soon after, we announced a cloud computing collaboration with Verizon Business as Red Hat Enterprise Linux was offered as one of the first two operating platforms available for Verizon’s new Computing as a Service (CaaS) solution.
In July, Red Hat held its first Open Source Cloud Computing Forum to foster discussion around and advance the development of open source cloud computing technologies. The interest that the forum drew from across the industry has prompted us to continue the conversations started in July through a second Open Source Cloud Computing Forum, taking place on Wednesday, February 10, 2010.
Also in 2009, we announced a new open source project named Deltacloud. The project aims to enable an ecosystem of developers, tools, scripts and applications that can interoperate across public and private clouds. We expect that open source technologies, and specifically Red Hat solutions, will continue to provide the foundation for enterprise cloud deployments into the future.
• Red Hat Enterprise Virtualization for Servers hits the marketplace
We first announced our virtualization strategy for 2009 in February, outlining plans to introduce a new virtualization portfolio based on Kernel-based Virtual Machine (KVM) virtualization technology with Red Hat Enterprise Virtualization. Following a global private beta program that started in June, Red Hat announced the general availability of Red Hat Enterprise Virtualization for Servers in November. The portfolio is designed to enable pervasive adoption of virtualization with a comprehensive end-to-end solution combining a standalone hypervisor and powerful virtualization management. As an alternative to expensive proprietary solutions in the marketplace, Red Hat Enterprise Virtualization offers a cost-effective solution that can help address customers’ performance, security and scalability challenges. It also brings with it a robust ecosystem of over 3,000 certified applications that can be virtualized on Red Hat Enterprise Virtualization. After just a few months in the marketplace, we are seeing strong interest in our server virtualization solution. Red Hat Enterprise Virtualization for Desktops remains in private beta today, but stay tuned as it is expected to be made generally available in 2010.
• Middleware momentum
Our middleware business continues to grow at a faster pace than Red Hat’s platform business, making it a growth engine for the company. Middleware momentum accelerated in 2009 with several announcements including the JBoss Open Choice application platform strategy. Announced in June, it aims to provide a single environment for deploying a variety of programming models with a common platform, making it easier to develop and deploy applications with JBoss Enterprise Application Platform 5, JBoss Enterprise Web Platform or JBoss Enterprise Web Server. The JBoss Open Choice strategy is intended to enable customers to embrace the latest innovations of the Java community today and represents an investment in the future as it will seek to accommodate the next wave of changes to Java for the enterprise.
• Java Leadership
Late last year the Java Community Process (JCP) reached a significant milestone when they approved the specification for the next generation of Enterprise Java; JavaTM Platform, Enterprise Edition 6 (Java EE 6). We believe that the approval of this specification starts a new chapter in the story of Java and we are proud to have contributed and acted in a leadership role in the formation of this standard which aims to make enterprise Java easier to use and more appealing to more developers, while still maintaining the benefits of open standards. Specifically, we support the new Web Profile and have led in the creation of two key features that are included in the Java EE 6 platform. Going forward we intend to continue our contributions to the Java development process as we strive to make this important technology platform more broadly appealing, allowing developers and our customers to benefit from a simple and standardized enterprise programming model.
• Red Hat Summit and JBoss World…the best of both worlds
New in 2009 was the co-location of Red Hat Summit and JBoss World held last September in Chicago. The events brought together Red Hat’s full product line and we saw record attendance levels. We’re headed back to Boston for the second time this year with the 2010 Red Hat Summit and JBoss World to be held June 22-26 at the Seaport World Trade Center.
• S&P 500
Red Hat was selected by Standard and Poor’s for including in the S&P 500 stock index in July. This is an important recognition for the global momentum of open source as Red Hat is the first pure-play open source company to join the S&P 500.
• Bilski goes Supreme
Red Hat has long worked to address the problem that software patents pose for innovation. In October, we filed an amicus brief with the US Supreme Court. In the brief, Red Hat explains the practical problems of software patents to software developers. The brief, filed in the Bilski case, asks the Supreme Court to adopt the lower court’s “machine-or-transformation” test and to make clear that it excludes software from patentability.
• Channel growth
In Red Hat’s third quarter ending Nov. 30, 2009, the channel generated 62 percent of indirect bookings, versus 59 percent in the prior quarter. The percentage of indirect bookings continues to reflect the growth of our partner ecosystem that are attracted to Red Hat’s broad portfolio of solutions to meets the varied needs of their customers. Additionally, we launched the Red Hat Catalyst Program at the Red Hat Summit which is designed to connect a community of Red Hat partners, offer marketing resources and fuel innovative solutions for customers. Through a growing partner ecosystem, continued investment in the channel and organic growth of our existing partners we plan to continue to actively work through channel routes to market in 2010 in order to drive the value of open source solutions further into the enterprise.
I don’t have a magic crystal ball to tell me what 2010 holds in store for the technology industry and Red Hat, but I look forward to the coming months and continuing to deliver for our customers as the trusted open source leader.