Editor’s note: WRAL TechWire Editor Rick Smith is on extended leave due to health issues. This Q&A was conducted before Smith stepped away from his duties on Sept. 10. Allan Maurer (allan.maurer@gmail.com) and like Smith a co-founder of WTW, is editing the site in Smith’s absence. (By the way, The Skinny’s author still welcomes email at: rsmith@wral.com)
RALEIGH, N.C. – Frank Calderoni, a long-time financial executive and chief financial officer at Cisco, could have had his pick of tech jobs after leaving the networking giant last year. So why did he pick Raleigh-based Red Hat (NYSE: RHT), which is a long way from Silicon Valley? He cites many reasons in an exclusive interview with WRAL TechWire.
Calderoni will formally meet with media and analysts Monday afternoon in the first quarterly earnings report conducted under his watch. He replaces a Wall Street favorite in former CFO Charlie Peters, who recently retired from the Hatters. And Red Hat paid a stiff price to land Calderoni: A $4 million signing bonus plus $9 million in stock options as well as $500,000 to relocate his family from tech’s heartland.
So why move east? Why Red Hat? Why Raleigh when other opportunities beckoned?
Here’s our Q&A:
What ultimately were the key reasons for accepting the Red Hat position?
I was very impressed with the caliber, commitment and leadership style of the Board and executive team. They set the example of a smart, innovative, direct and fun culture at Red Hat, that is infectious, and I wanted to be part of that.
I also wanted to make sure I could contribute to the continued success of a company, and I felt Red Hat was the perfect fit for me. This company is very well run, and I hope to bring some expertise to help take it to the $5B to $10B level. The brilliant software business model of Red Hat is the sweet spot of open source solutions. This company is offering exactly what every customer needs right now – open, secure, and innovative technologies that help businesses grow.
Did you have other opportunities? Were the incentives crucial to the decision, i.e. you had other bids for your services?
I have been fortunate to have had several incredible opportunities over the years. I feel very honored and lucky that I have worked for some of the most innovative IT companies. As I mentioned in the previous question, it came down to the leadership team and the company itself.
My decision was based on where I can have the most impact with our team and our customers (and have fun), and for me that is Red Hat.
It appears you will be relocating to the Triangle from Silicon Valley. What appeals to you (and family?) about living in this area?
I am an East Coast guy from New York, and I have been to Raleigh many times, so I am quite familiar with the area. But I am excited to be getting to know the Raleigh area even better.
From my experience, North Carolinians are hard-working, dedicated and incredibly friendly. Also some of the best schools in the country are here, Duke, UNC and NC State. I am also looking forward to experiencing real seasons again.
Granted, the winter may take some getting used to again, but it will just remind me of my childhood.
Was relocation a requisite for taking the job?
Red Hat does has an outpost in California.My new responsibilities are global and I expect to spend time over the years in multiple Red Hat locations, as well as with our customers around the world.
That is the best way for me to be the most effective and engaged in my new leadership role. Since the company is headquartered in Raleigh, and a large part of my team is based here, I felt it was important to be here as well.
Will there be different challenges in handling the finances of an open source software company vs. Cisco? Please explain.
Managing the finances of a company has many similarities as I have experienced in my previous three CFO roles. But at the same time, every company has its uniqueness which makes the role, at times challenging, as well as extremely interesting.
At Red Hat, I know the team uses open source technology in everything they do, including the finance systems and tools. That will be new for me and I am excited to start learning, beginning with the Linux operating system on my new laptop.
From the business model perspective, although Cisco has a very large software business, managing an all software portfolio with recurring revenue, will be a great opportunity.
What’s the one or two key points you want your fellow Red Hatters to know about you?
I am not just a numbers guy. I love understanding the details of the technology, and I am ready to get heavily involved with our customers. I am detailed oriented and ask a lot of questions as I am very curious.
I really enjoy what I do professionally, but I also like to have fun—watching hockey, running, skiing, volunteering and raising my two kids with my wife.
