We recently attended the Red Hat
Summit 2019 event in Boston. We’ve missed a few of these. Both the company and the
event have undergone significant growth resulting in larger, more influential event
by a well-positioned company with deeper pockets and plenty of opportunity to
continue growth.
One executive said a client
described the Summit as a cross between a religious revival meeting and a tech event.
I’d agree it did so in the past. However, this year the atmosphere has shifted
to biz/tech event with subtle tones of
Open Source revival roots evident in some breakouts.
Red Hat
summarized their progress over the last few years and their path for the
future:
- Two years ago, Red Hat demonstrated their product portfolio working together to run traditional workloads on a hybrid cloud.
- Today, Red Hat discussed their portfolio working together to run modern, sophisticated, data-intensive workloads across a hybrid, multicloud environment.
- Tomorrow, Red Hat will power next generation edge, A.I., and super computing applications across a hybrid serverless environment.
Summit 2019
was about how they will accomplish this. Comments and recommendations follow.
Event
Highlights
First, we congratulate Red Hat CEO Jim
Whitehurst for getting the CEOs of both IBM (Ginni Rometty) and Microsoft
(Satya Nadella) as Keynote speakers. That alone is a significant indication of
just how influential Red Hat has become in the enterprise market. Of course,
Ginni was there to address the “elephant-in-the-room” topic, i.e. the as yet-to-be-completed
acquisition of Red Hat. Satya was there to announce a major support/integration
partnership with Red Hat.
To the great delight of Red Hat aficionados and open
source enthusiasts, IBM CEO Ginni Rometty and Red Hat CEO Jim Whitehurst
hugged each other on stage. IBM’s interest in acquiring Red Hat, reflects the
success of both Red Hat strategy and enterprise acceptance of the open source model
and movement. A movement with UNIX-roots and founded in reaction to large
vendor (read IBM) market dominance. Also very interesting was the acknowledgement by Ginni Rometty that the
organizational and management impact (anticipated results of the acquisition)
would be more significant to and require more effort from and adjustments by
IBM than by Red Hat. This underscores importance of a successful integration and
not a makeover of Red Hat.
Moving
on. Also
well-received was the announcement by CEO Satya Nadella and Jim Whitehurst of a joint Microsoft-Red Hat
program to provide and manage Red Hat OpenShift on Microsoft Azure. Announcing
this before the completion of IBM’s acquisition greatly strengthens Red Hat’s
Open Source bona fides, revenue opportunities, and market positioning, while increasing
its potential value to IBM’s revenue stream .
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| Figure 1 The Open Hybrid Cloud Data Center All figures courtesy Red Hat, Inc. |
No
surprise, Red Hat’s direction and strategies are very complementary to IBM’s
own. Red Hat and IBM acknowledge and support the hybrid/multi-cloud model that
has taken over in enterprise data centers. It is now embraced as foundational
in IBM’s strategy. Red Hat continues to expand its efforts and development of integrated
solutions and services for cross-platform systems management, security, data,
analytics, A.I., blockchain as critical, influential technologies.
Red Hat has
an enviable record of consistent revenue growth in a fluctuating market. This
would be especially attractive to IBM as their own recent revenue growth has
been rather shaky. Red Hat’s success is a result of their ability to foster and
grow market interest with open source solutions, excellent customer support
(and relations), strategic partnering and well-managed employees. Let’s take a
quick look at the strategy underlying Red Hat solutions.
Red Hat solutions strategy
More specifically the Red Hat (Figure
2) portfolio is targeted to address challenges in:
- Hybrid Cloud Infrastructure – where they will provide open source model infrastructure software solutions spanning major cloud offerings;
- Cloud-native development – provide software to rapidly and efficiently develop and deploy apps across hybrid cloud environment with the goal of transparent user access;
- Management & Automation – provide software that simplifies management and automation of the major hybrid cloud environments.
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| Figure 2 Solution Portfolio - key to Red Hat's success |
In addition, Red Hat (RH) will maintain and offer a range of
support services and industry focused solutions. The solutions
portfolio[1] will focus
on five key areas:
- Cloud via OpenHybrid Cloud software enablement, infrastructure management, etc.;
- Operating platform with the open source Kubernetes-dominant application container software, RH OpenShift 4 with extended sophisticated management covering multiple functions;
- Storage leading RH Gluster Storage (for unstructured file-based storage) and RH Ceph Storage;
- Virtualization expanding the long-time partnership with VMware in networking, storage, and containers – announcing a joint project with VMware to add and support Red Hat OpenShift in VMware’s SDDC stack, effectively integrating RH OpenShift and RHEL with VMware’s vSAN, NSX-T and vSphere.
In addition, Red Hat will focus on
providing applications and technologies involving A.I., analytics and data in
all aspects – aiming to become the solution platform of choice for
container-native A.I. solutions as it applies these technologies in
industry-specific solutions. Industries targeted include financial services,
government, healthcare and telecommunication.
With the benefits of open hybrid
clouds combining hyper-scalable public clouds, private cloud architectures and distributed
services. The OpenStack open source project model is the de facto basis of
enterprise data center operations. Software designed infrastructure with
application and service transparency and portability across hardware platforms
and architectures is becoming the norm. Figure 3 shows Red Hat’s open source
model. Note this shows a sampling of the partners in the Red Hat open source
ecosystem.
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| Figure 3 Red Hat's Open Source Development model |
However, all
this transparency and openness comes at a significant cost in complexity,
rapidly evolving technology and rapid updates. Very much a burden for any IT
staff whose activities are more and more important in achieving enterprise
success. Learning new technologies, integrating them into the environment and
managing all the disparate infrastructure underpinnings is difficult,
time-consuming and a distraction to the pursuit of enterprise success. Hence
the role of Red Hat.
A major move in the market is the
containerization of applications software environments with Kubernetes at the
heart. Red Hat has over 1000 customers using its container orchestration
platform, OpenShift which is based on Kubernetes. One of the hottest emerging
areas in today’s market is container-native Artificial Intelligence systems
built around the Kubernetes and OpenShift containers. Red Hat has built the
platform that they intend to be the default choice for data, analytics and
Artificial Intelligence projects. See Figure 4.
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| Figure 4 Red Hat's platform for A.I., data and analytics |
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The Red Hat OpenStack enterprise cloud platform includes
infrastructure services for storage, test environments, application
development, data analytics, and data center. OpenStack is the preferred
platform for modern container, Kubernetes-based programmable public/private
cloud infrastructures. OpenStack is at the heart of an astonishingly large
number of other open source projects. We expect the growth to continue to
expand. Red Hat plays a major role in third-party management of open source,
software defined infrastructure to assure reliable access to the latest in
technology, lowers the costs, improves delivery and speeds delivery of new
solutions.
Summary
All
told, Red Hat Summit 2019 was an impressive, informative event. Red Hat’s success is predicated on assuming much of the cost
and effort to maintain the development and operating environment that assures
consistent user access, product currency, and functionality of open
source-based products across evolving hybrid cloud platforms. They provide the
integrated stack along with a variety of products and support services that
free enterprise IT and Dev/Ops staff to focus on using data center resources in
pursuit of enterprise success. They have enjoyed significant, consistent growth
in revenues, staffing and customer base.
Red Hat does have some catching up
to do. For example, it must add network service capabilities. Even if it
becomes part of IBM, other companies in the cloud space are heavy-weight,
well-established, technically astute, well-heeled, fierce and aggressively
competitive. A lot will depend on how IBM changes and adapts once/if the
acquisition closes. After all, the whole Red Hat Linux open source market had
its birth as a reaction to big vendor (IBM) domination. It’s going to be
interesting to watch.
