ET: On the awareness front, Ubuntu seems to be making waves these days in the user segment, to an extent that people don't say they use Linux anymore; they say 'I use Ubuntu'. What do you say about that?
Michael Chen: Things are a bit different when you compare the two. In the last 10-15 years, Red Hat has established itself as a company with a very specific focus on a particular market segment -- the enterprise and government. However, we do have a community version -- Fedora. I would share with you an interesting thing that happened last year. We had an event in Germany; it was a Linux users' conference. There was an Ubuntu presentation, and the Ubuntu guy on stage could not get through his presentation. So he waved his hand towards the audience and asked for help. Then a guy went up and took two minutes to fix things. This guy was wearing a big Fedora T-shirt! So, that's the difference. At Red Hat, or Fedora, we focus on hard core and very savvy technologies, whereas I think Ubuntu focusses on making it easy, useful for consumers. So, that is the basic difference between the approach of the two companies.
ET: O.K. and is there any common model of sustainability for the two companies?
Michael Chen: At the end of the day, I think that for any company to be successful, there ought to be three things. First is that you have to have the passion; you have to believe in something. Maybe for Red Hat and Ubuntu, we both believe in open source, we both believe in Linux. The second thing is that you have to do something better than anybody else in the world. I think for Red Hat, it's always collaboration and very active community engagement. The third thing, which is very critical, is that you have to have a business model. It's good that you have passion for something, it's even better that you can do it better than anyone else, but you have to have a business model to sustain it. And Red Hat today is the only profitable open source software company. So, if you don't have a business model you can't be successful in the long run. Unfortunately, that is the reality. I don't say that we have to go and focus on the enterprise only, but if we have to fulfil our long-term dream, we have to have a model to take us through this whole process.
ET: And what is your long-term goal?
Michael Chen: I think Red Hat wants to become the 'defining technology' company of the 21st century. We believe the way to develop, deploy and utilise software should be totally re-written. I will once again refer to the survey we conducted. We asked people which company they thought would be the future of the technology industry. We were ranked no. 14. But if you look at the other companies on that Top 20 list, they were 20, 30 or may be 40 times our size in terms of people and market share.
So, how come this tiny little company can have such a strong momentum? I think the way to develop software should not be a vendor-driven model any more. Think about Microsoft; they have something like 30,000 developers. They plan their product and go to the market. What if the market doesn't accept the product? You have to come back again, to redesign, re-prototype, re-manufacture and then go back to the market again. The whole process is very long and very vendor driven. Why do you have to wait for the last minute and then go to the customer? Why don't you take them (the customers) on board at the design stage so that their ideas, their concepts are included from the very beginning? That's exactly what we do at Red Hat.
Why I say we are better than anybody else in collaboration, is because Fedora is an open platform. You can come and download it without any barrier to entry and participate in any change you want to make and contribute back to the platform. So, when I am starting to package this Red Hat Enterprise Linux, I have addressed all customers' needs already. So, it's actually designed by the market and hence the product is much, much stronger.
It's a new way to develop, implement and utilise software. If you look at our model, it's a subscription model. You don't have to pay Red Hat until you realise that we can give you value. We don't sell media, we don't sell boxes, we sell content. It's the service and support -- all that is what you are paying for. Look at your magazine; do you think they buy your paper? No, they buy your content. They go for the value add you give, and they come back again and again. A lot of companies are selling packaged software, but very little of it is utilised. So why pay that much of money when you can have exactly what you need? You pay as you go; you pay only for the value you get.
And that's why I said that in the long run we believe these are the new aspects of the business. With open source, it's a new way to develop software. And the subscription model is the new way of consuming software. So, in another 10 or 20 years, we are going to reach there.
ET: I've heard the term 'Linux automation' being used somewhere; what is that?
Michael Chen: It's about enabling the customers to run their applications -- certify once, deploy
anywhere, any time. So, ideally, running software should be as easy as you putting a plug into a socket and getting the electricity. All you need to care about is that plug. How the electricity is generated or transferred, is none of your worry. That's our focus today at Red Hat infrastructure software in the open source way and delivered as a pure service model. We are pretty much past the challenge, and the technology is in place. Now I think our challenges are related to operations, awareness and how to get it out on a global basis.
ET: Let's come to India. What kind of challenges do you see here and what are the strengths?
Michael Chen: I have been travelling in India for a few days now, so I think the no. 1 challenge here is infrastructure. I was born and raised in China. If you go to China, we have the most extensive first-class highway system in the world. I think that is one thing India needs to develop.
In the IT world, the Indian Government is investing a lot of money in developing the IT infrastructure -- the applications, the operating systems, taking desktops to every district and individual citizen. But how do you develop an infrastructure that is low-cost, offers high value and has a different business model? It's important because the difference between the western countries, and India and China is that we are not that rich. Here open source has an advantage.
There is another very important thing: India and China have probably the biggest base of engineering students in the world. In the US, only 17 per cent of undergraduates are science or maths students. In India and China, it's about 70 or close to 80 per cent. There is so much of technology or engineering talent here. We need to leverage all this talent and try to develop software in a different way. Why do you have to depend on proprietary software? Look at the open source model! You can leverage already-developed software, do a value add and take it to the market. Why not take advantage of open source and 'produce' software? We need to productise.
ET: What sort of scenario do you see one year from now?
Michael Chen: I have met many types of customers; I have met the LINUX For You-type of customers who are already tech-savvy, and customers who say, "Who are you?". That takes me to two things: how can we attract more and more technology people and, second, how can we drive more and more depth. It's not just Linux now it's middleware, it's virtualisation, it's all the new technology that we develop. How can you have a total open source architecture today versus a couple of mail or Web servers. For the rest of the people, how could we meet their needs -- form an ecosystem that has that scale, to really cover that breadth with our distribution systems, with our partners. Eventually, it doesn't matter who accomplishes this task; one year from now I want everybody to understand that software is not about a licence. Software is about paying as you go -- subscription. I want more and more people deploying open source. Our distribution systems and our SMB markets are growing rapidly. So, the momentum is there; the challenge is where to focus in order to capitalise on the opportunity.
ET: And what kind of investments are you planning for India?
Michael Chen: Sales, distribution and also business development -- those are the areas without which the entire ecosystem can't be developed. Previously, we focussed so much on sales. Regarding India, the enterprise, government and education are the three areas that will guide our further growth in the country. How can we really engage at a different level so that people feel comfortable about using open source and Linux? Making these applications accessible is the focus for India.
Education is another focus area. We need technical education at a national level. We plan to increase contributions from this country. India is the third-largest contributor to the Fedora community, following North America and Europe. Then we have enterprises or SMEs, which have been our focus for long and we have been doing well in this area. I am writing a paper on the success factors that India has and will share it with every other market we are in. We have to work with the government and the education system to ensure that the business model is sustainable. |
