Red Hat Goes All in with the Cloud

Red Hat has always been the leader in open source content. Now it’s trying to firmly entrench itself as the open source leader in the Cloud as well. N3 recently attended Red Hat’s annual Partner Conference where Red Hat made a series of announcements that together wove a narrative we’ve been sharing with companies for a while now. That story concerns the power of the Cloud.

The Cloud has completely transformed technology sales. As a leader in global sales execution and demand generation, we can bear witness to it. Much of that change pertains to how technology is bought and who is buying, forcing technology and software companies to change their sales model. But it also applies to their overall business model.

At the conference, Red Hat Executive Vice President Paul Cormier said, “Software innovation is driven by open source.” Based on the company’s recent quarterly earnings, that reality appears to be paying off for Red Hat. Red Hat’s total revenue for the first quarter of 2016 equaled $544 million, up 17% in U.S. dollars year-over-year. Subscription revenue from infrastructure-related offerings was $391 million, an increase of 15%.

New Cloud Partner Initiatives

The Partner channel is one area greatly impacted by the Cloud. Partners have to retool how they work with solution providers, often having to learn to sell rather than simply provide services. As such, companies such as Red Hat have developed new initiatives to help these partners adjust and succeed.

During the conference, Red Hat announced The OpenShift Blockchain Initiative, geared towards financial services industry customers and ISVs. The initiative basically enables these companies to explore using blockchain-based Cloud services with open source technology for updated transactional apps that offer more transparency and security. Industry-specific, yes, but more important, Cloud industry-specific.

Red Hat also announced five new training and certification offerings focused on improving DevOps skills of IT professionals. In addition, the company announced a newly forged alliance in which Red Hat would combine some of its key offerings with global hyperscale datacenter solution provider Quanta Cloud Technology’s (QCT) family of servers, storages, and network switches. The goal is to increase private and hybrid Cloud deployments by bringing both companies’ expertise to customers looking for OpenStack and Ceph-based Cloud environments.

A Dell Alliance Takes Off

Finally, the company announced a significant win for its alliance with Dell. C.A. Mobile, a leading mobile services provider in Japan, is using an OpenStack Cloud solution from Red Hat and Dell as the foundation for its website infrastructure. The company upgraded from an on-premises server solution to the Cloud. The results, according to C.A. Mobile, have significantly increased the delivery speed of its servers.

Final Thoughts on the Conference

Taken as individual announcements, none of these news items change the world of technology. Taken together however, they reveal Red Hat’s overall intent to continue to drive adoption of open source as the foundation for the World’s Cloud infrastructures, as it did with the general on-premises open source community. This is not only a sign of the times, but a smart move to stay in sync with the demands of its users.


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About the Author

Tim Killenberg

As global leader of N3’s Commercial Delivery organization, Tim focuses on driving revenue results and sales excellence for leading technology, software, and manufacturing companies. Tim has over 20 years of sales, marketing and strategy experience with high-growth companies. Connect on LinkedIn

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