Submitted by Red Hat CEO Jim Whitehurst said yesterday – his fourth day on the job – that he’s angling for a showdown with two tech titans in what he describes as a struggle to protect information sharing in software development. No longer satisfied just defending a company as he did while working at Delta Air Lines, Whitehurst is ready to go on the offensive against Oracle and Microsoft as he builds Red Hat toward billion-dollar annual revenues.
Hiring from a completely unrelated industry with completely different motives?
Sounds like Red Hat’s about to pull a Commodore. (Commodore hired a steel magnate to run the company, who had no idea how to market electronics.)
Dreams of grandeur, too.
EDIT: Encoding or scripting issues.
Edited 2008-01-06 00:04 UTC
I think it would be unfair to say the motives are completely different: no matter what the industry, all businesses exist to make money. Red Hat simply makes their money in a different fashion, so motivation is the same but the how is different.
I’ve only read a little bit about the new CEO so far, but he seems to have a pretty high interest and take in technology and free information, and his past experience in Delta in expanding profits by customer satisfaction and service should be welcome in Red Hat. I’m sure Red Hat would accept no less than their standards in those two areas where he seems to excel. Yes, he does seem to have quite high ambition, but I am hoping he stays by it and with Red Hat there is great chance of profitable innovations for Red Hat, Linux, and open source.
I agree that Red Hat has major potential to be a major player and earner of the data-center field, and I’m also hoping he plans to stick with expanding in the software and desktop. It would be great to have a Red Hat desktop product that is a little less hectic than Fedora or even Ubuntu (although I use and have great respect for both, it’s just the idea of upgrading every 6 to 9 months to get features and new versions of software isn’t for me).
I didn’t mean motives as in why people do things, but motives as in what moves the industry.
The travel industry is a service industry. The computer industry is a products industry. The airline industry’s service model of “move as many people as possible and keep costs down as low as possible so they don’t complain about how shoddily they are treated” just won’t work here — and there is a long history of computer companies hiring CEOs outside their industry, and then fading into insignificance or death due to mismanagement more than anything else. Ask Commodore.
(And I take issue with that ‘all businesses exist to make money’ quip, too, but that’s off-topic.)
Yes, I probably could have worded that better. Most businesses are to make profit, but in my sense I wasn’t including anything non-profit or foundations, just general business. But you’re right, I should have waited for better wording for that 🙂
I both agree and disagree: it’s a little more complicated than just products. It is more than one type: for things like toilet paper and school supplies: those are products. But even things as software isn’t as simple anymore, especially with SaaS as an example and Red Hat’s business model of give away the product, earn money on support.
You realize that RH sell services, right?
One example does not an industry make.
There’s no issue. The verify reason for having a business is to make money. The main difference is exactly what you do to make that money.
You do realize, that the CEO after the “steel guy” was also from outside of the industry? Yet he almost managed to saved Commodore, even after the catastrophic decisions of his precedessor. Too bad he was given the sack…
And as written several times before, the software industry is slowly, but surely becoming a service industry. If you have lived in a shell in the last few years, let me break it to you: Red Hat actually sells services. Come to think of it, a Linux company could not really do business otherwise, now could it?
The travel industry is a service industry. The computer industry is a products industry.
You do realize that we are in the midst of an industry shift with the computer industry, whereby the computer software [sub-]industry is moving to a services industry instead of a product industry?
You do realize that Linux is partly behind that shift? And thus Red Hat is also behind that shift being one of the largest Linux distributors?
You do realize that that is also one of the biggest problems for Microsoft as Microsoft is too product focused? (Balmer’s idea is Software+Services (SAAS), which won’t work in the long run. Open source will push the cost of software to be so low that it will have to just be services in the end.)
These companies treating computer software as a service make orders of magnitude less than those who treat it as a product.
No, the industry’s not shifting. Those on the bottom rungs are just good at generating noise.
Hiring from a completely unrelated industry with completely different motives?
Managing a company is always the same: try to get money from your clients.
He was programmer in the past. That already makes him more expert in software than most of the CEOS of all the software companies out there, who are mostly bussines guys.
He’s a succesful bussines guy. He also seems to know what software is. He also believes in open source. I couldn’t have though of a better CEO for Red Hat…
True, but it’s how to get it from them and knowing how your industry lives, breaths and reacts that’s different.
And I think therein lies the difference.
Airline companies, particularly the majors, have emphasized cost-cutting and efficiency over the last several years. Not simply for profit enhancement, but for absolute survival. And that’s not necessarily a bad thing (although airline customers may feel otherwise), but applying that expertise and mentality to an organization that is by all appearances strong and healthy may cause a destructive culture clash with the employees. One can easily envision the issues arising when a company with it’s origins in hip and free OSS development with it’s own particular lifestyle and culture comes face-to-face with an executive that drives a cost-analysis on toilet paper use in the head office to find savings.
Of course I’m generalizing, I have no firm knowledge of his background so I’m not going to provide any sort of comment on whether this is a good or a bad thing for RH. There are times when sourcing outside your industry can be a brilliantly strategic move to bring new blood, new expertise and new ideas into a corporate culture and mentality that may have become too introverted in it’s own management style. And anybody that has survived a senior-executive seat in the airline industry certainly has the thick skin and backbone to take on cut-throat industry bullies.
I hope for RH’s sake that this is what the move actually is. I hope that it wasn’t a move by the board of directors to bring a shareholder-friendly executive focused on short-term profitability growth at the expense of those values that made RH strong to begin with. Red Hat is not in financial distress, so such a move wouldn’t make sense to me, at least without exploring further.
The only frame of reference I have is that I’ve flown Delta in the past, and while they’re not the worst airline I’ve flown in terms of my personal experience, I’ll avoid them unless necessary. But then I say that about most airlines I fly, so take it with a grain of salt.
On a completely unrelated side note, I do hope things work out well for Matthew Szulik, my understanding is that it is his wife with health issues? I may have a reserved opinion on him as Red Hat’s CEO, though it’s not really a bad one. But I can sincerely respect that someone with his drive and success in what he’s attained can still prioritize the important things in life and focus on family. We should all keep such perspective.
I think you touch on a few important points in your comment. Certainly one’s experience in things such as cost cutting, driving employee performance (and rewarding them) as well as general things such as developing procedures, quality guidelines and so forth are probably quite general, though I am no businessman myself.
In this light I suppose this is a good choice for Red Hat, but I am confused as to what unique values he can bring to the organisation that others cannot and whom also have solid proven industry experience.
I wasn’t aware on his family health concerns and from experience I must confess that I find it rather interesting, based on what you’ve said about his wife, that he’d choose to take on a role as challenging and seemingly heavily demanding on his time and energy. Of coarse lets not make any assumptions because they could have it all sorted so that his time is available, but should things take a turn for the worse I’d think he’d prioritise his wife over Red Hat. Mind you, I find this completely appropriate for him, even though it may not be for the shareholders.
It’s all very interesting so I guess time will tell. I think one thing that is certain is that the top brass at Red Hat would have considered all of this and more prior to approving his appointment, so lets just wait and see.
I do wish him the best of luck.
It all depends on how they go about it; whether he leads and allows managers of the respective areas to have a certain degree of autonomy or whether he tries to impose a foreign corporate culture on Red Hat in the name of “I know what works because my university lecturer told me so”.
Running a company is no different regardless of which market it sits in. A businesses sole aim for being set up is to make money, everything else, like social responsibility etc. are either second or part of making more money (aka good PR for business, nice feel good, customers draw to a nice company).
Are they dreams of grandeur, or the fact that having worked in in the airline business, where profits are razor thin, he realises how much the likes of Oracle screw customers providing products that are only marginally better, in some cases, than the closest open source rival.
How many times have you been into companies where they’ve made really stupid decisions. I’ve seen companies gone out and spent thousands on exchange and only use it as a mail relay, spent thousands on Sharepoint for a forum, thousands licencing commercial databases when an opensource one could have done the job.
What Microsoft and Oracle (along with IBM as well, who is one of the largest middleware companies) are scared of. Once the ‘boxed product’ fetish from the old generation has left the established business, my generation, the ones willing to investigation solutions from a variety of sources, are not going to sit back and happily get shafted with huge licence fees. Huge licence fee’s which are a cost centre to the business and only serve to inflate the software vendors bottom line.
Hiring from a completely unrelated industry with completely different motives?
Sounds like Red Hat’s about to pull a Commodore. (Commodore hired a steel magnate to run the company, who had no idea how to market electronics.)
Let see, he is a computer science graduate, who first made his living programming, before moving towards finance as his major work area and ending up as Delta’s CFO. He the moved in to operations as COO and turned Delta round. Delta like all major airlines has a massive datacenter and is a large customer of Red Hat so he can see things from the customers side too.
He is a Linux geek with his home network and is also tough enough to be ready to take on the competition. Sounds like just the perfect new CEO for RH.
By the way RH sells services not products.
Redhat was in the service in busines too. They give their product away (CentOS), you pay for service (RHEL).
Yeah… And their paid for service bites. I hope this guy shores things up.
I know one thing, I contact Red Hat support and I am happy as far as guys wanting to help you out. I think the problem comes in when people act like a jerk or come across arrogant thinking the other person is dumb. I had to create several Xen virtual machines for a project at work and Red Hat support saved the day with a question on how the /dev/xvda loop-back partition came into play.
I give them an A+ on support so far from what dealings I have had with them. You got to give a little to get something in return and a lot of people want to take, take and take. If the new CEO has a knack for business protocols and a successful track record then I say let the games begin. Sometimes it is good to shake things up a bit and force you to venture outside the comfort zone this is what forges you into who you are and finds out what you are made of…
Red Hat is moving forward and growing, I believe this scares a lot of people because change is never stopping in the IT field. The systems you build today, will be replaced in the future with a whole new model and a lot of people can’t grasp this concept.
wonder why he didn’t mention novell. must not be a threat. hehe ;-p
I have no problem with enthusiasm, but I hope that this new guy spends more time building technology and shoring up services than running his mouth about Microsoft and Oracle. Talking smack about your competitors makes for good copy but, at the end of the day, customers will be more interested in what he delivers than what he says.
> hope that this new guy spends more time building technology
It’s the “job” of Fedora. And Fedora is also about freedom.
Tell that to Steve Ballmer.
Methinks RedHat is obviously joking when they say they want to take take on Microsoft and Oracle. One small example: You need thousands of competent IT folks to give support and promote any software line in the enterprise.
Companies base much of their IT buying decisions on the availability of IT support staff for a particular product. They often measure entry level competence by certifications.
Microsoft learned this nearly 2 decades ago by promoting certifications in Microsoft technologies. For less about $150 you can sit and pass an MCP certification test. For $600 you can pass all the tests needed for MCSA.
On the other hand it costs $800 to sit one exam for RedHat certification and that is after you take 3 pre-requisite classes costing $2,700 each. Do the math yourself. These guys are living in some kind of dreamland.