In 1994, Marc Ewing created his own distribution for Linus Torvald’s Linux, called it Red Hat Linux and released it in October of that year. After merging with Bob Young’s ACC Corporation in 1995, the company was renamed Red Hat Software. Today, Red Hat is a global company that provides enterprises with technology and services via the open source model.
Sramana Mitra: Hi Lee. Let’s start with some context about Red Hat and about you to give our readers an idea about the cloud computing environment we’re dealing with, from what perspective we’re going to look at it and the scale of the problem for you.
Lee Congdon: Red Hat is a rapidly growing company. We went public in 1999. We are a $1 billion revenue company, on a trailing basis, and expect to become a $1 billion revenue company for our fiscal year. We’re a little over halfway through that fiscal year now. We have the challenges of very rapid growth. Our last quarter, it was a 20% year-on-year growth over the quarter a year ago. We have roughly 4,400 in roughly 80 locations in 30 countries around the globe. And we’re rapidly adding employees or associates on a monthly and quarterly basis.
Our primary business is providing Linux operating system, middleware, virtualization and cloud technology based on the open source development model, so community participation in developing a series of open source projects and others benefiting from that knowledge and building upon it. We take those projects, pick the ones that are most relevant for enterprises, package them, test them exhaustively, certify them with hardware platforms, software platforms, provide support, provide consulting, education, security patches and so on for our customers who subscribe to those products. We use a subscription model.
If you choose to use, for example, Red Hat enterprise Linux in your data center, you subscribe and we provide a package of services. The software itself, of course, is open source and is widely available. We take the burden of managing the software, managing the updates, dealing with the upstream developers and so on and provide support for you so you can use it in mission-critical environments.
SM: Okay. How about a little bit of your background? How long have you been with Red Hat? What path have you been traveling?
LC: I started out as a computer scientist and went to work for IBM developing operating systems for a general purpose minicomputer, a number of years ago. I worked in a variety of positions for IBM, including technical sales, support, internal IT and consulting for the launch of the RISC System 6000 and the AIX operating system. I moved from IBM to Citibank and worked in a variety of architecture and global IT positions for Citi. I went from Citi to the NASDAQ stock market where I was responsible for the technical integration of the American Stock Exchange, the deployments of the market platforms for NASDAQ Japan, NASDAQ Europe and an offshore development joint venture in India. I moved from NASDAQ to Capital One Financial and had a variety of divisional CIO responsibilities there, both for the non-card business – Capital One Europe, for example – the medical lending business, the online bank as well as divisional CIO for the corporate functions, human resources, legal, risk management, finance and so on. I came to Red Hat almost five years ago now.
SM: So, you’ve had a while at Red Hat. You’ve had a chance to really sink your teeth into the problem at Red Hat?
LC: That’s correct.
SM: Okay, so what is your cloud computing philosophy?
LC: Good question. For us, the primary drivers are remaining flexible to enable us to respond to our very rapid growth, to do that at a reasonably effective cost, but to focus really on flexibility and time to market, to use our own products. I have an advantage in that as a relatively young firm, much of my infrastructure is homogeneous. I only have one application to do each thing rather than multiples. It’s on Linux, and increasingly, it’s virtualized. So, I have a great deal of flexibility. By the way, I also have an organization that, with appropriate discussion, is pretty responsive and flexible about technology change. Given all those factors, our strategy is to be aggressive about cloud services. We are probably 30% to 33% operating in the cloud today. We are continuing to push that. As I said, we’ll continue to use our own products. We expect to have internal processing for a substantial period of time. At the same time, we are defaulting to moving things to cloud-based services.