Red Hat CEO Sees Open Source Opportunities in Financial Crisis

Dec 05, 2008

Red Hat president and CEO Jim Whitehurst sees opportunities for open source firms that might be putting undue burden on their dwindling IT departments because of the current economic downturn.

Whitehurst offered his views in a press conference in Munich. His conclusion in the video interview that followed: "When people look at alternatives, often Open Source wins." At the press conference, Jim Whitehurst, who has been head of Red Hat since January 2008, compared the current financial crisis with that of the dot-coms in 2000. The pressure toward austerity was the same back then as
now for Linux and the open source community. It was the first time IT chiefs especially in banking and insurance sensed the need to count costs.

While the era during which the dot-com bubble burst was primarily about a migration from Windows to Linux, nowadays also other levels of the software stack are affected, said Whitehurst. Without naming them, he mentioned examples such as insurance companies and others that are "in the deep blue", and describes them as conservative, "not the early adopter kind." Firms started replacing their proprietary application servers with Red Hat's open source JBoss. "There's always a layer in the stack where there's value in using open source", he said. The savings potential on the hardware side is not even an issue anymore, because many IT departments were already migrating from costly UNIX machines to x86 hardware. Also license fees are an issue only in the beginning, according to Whitehurst: "Let's be serious: Getting something in production isn't free. It's not only about licenses, although fortunately we win that battle, too."

Whitehurst's comments were not without a plug for Red Hat, considered by some the only currently profitable open source developer. The reason for its success may not only be its features, but its business model. Whitehurst explained that Red Hat doesn't just sell open source functionality, "We make money by making the operating system enterprise class," as he said. The added value for customers, he said, are the stable Red Hat Enterprise Linux (RHEL) releases that create robust APIs and open standard components for the IT of the future.

As for what's coming in 2009, Whitehurst promised further management and migration functions for KVM virtualization, as well as a new version of the Enterprise IPA identity management system for Linux. Additionally, RHEL 6 should be out by the end of 2009.

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