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Red Hat CEO: We Won't Make Money From PaaS for Years

By Sean Kerner (Send Email)
Posted Aug 18, 2011


VANCOUVER. Red Hat CEO, Jim Whitehurst is a man on a mission. His mission is to grow Red Hat to a billion dollars in revenue and beyond. Part of Red Hat's future growth comes from the emerging area of platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS). Platform as a service is important for the future, but it's not going to be a money maker for Red Hat in the short term.

Those efforts are part of Red Hat's overall cloud initiatives, an area Whitehurst is hoping to grow.

"We've set up cloud as a separate business unit, but realistically it's about getting commercial focus around a set of workloads," Whitehurst said. "The cloud itself is cloudy, but in general it's a way people are running and deploying our existing software so it's almost an overlay of what we are already doing."

Going beyond the overlay are Red Hat's Paas offerings, called OpenShift, and the IaaS service CloudForms. Whitehurst said he's happy with the progress to date from his development teams on those efforts, but it's not a money maker for Red Hat at this point.

"The sales pipeline is tiny, so I don't expect them to generate material revenue and certainly not profitability for a couple of years," Whitehurst said. "There is a lot of activity around these things, but you need to understand that most companies, especially in open source, don't pay until something goes into production."

Whitehurst noted that in his view there aren't many major enterprises running production iterations of PaaS or IaaS at this point. He sees adoption at this point coming from developers and testers rather than production applications.

"We are unique in our openness, where you are writing to an infrastructure stack that has demonstrated that it can run mission critical workloads," Whitehurst said.

Red Hat's OpenShift, which is in preview, was updated last week to support Java EE 6. Whitehurst believes this to be a big deal. In his view, it is the proven capabilities of JBoss and all of its associated enterprise production services that will make the difference for Red Hat's PaaS offering.

"People aren't going to be running production apps on OpenShift for awhile, but you can see the roadmap of why you could, and I think that's a real advantage, especially with enterprises," Whitehurst said.

Red Hat's path with PaaS is likely to be similar to the one it is taking with Red Hat Enterprise Virtualization (RHEV) platform. Whitehurst said there are parallels between RHEV and PaaS, but he thinks PaaS adoption will take longer.

"If you think about what RHEV is, the concept of virtualization has been around for a while," Whitehurst said. "We're kind of doing to VMware ESX the same thing that Linux did to Solaris."

Whitehurst explained that Red Hat will come in with better pricing and offer a more compelling value proposition.

"PaaS and IaaS doesn't really exist today," Whitehurst said. "It's not about getting a technology to replace an existing technology; it's literally about bringing in a new technology that will transform the way you manage a data center."

"That's a bigger longer-term thing," Whitehurst added.

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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