Red Hat sizes up NZ for 2011 growth

Red Hat sizes up NZ for 2011 growth

Channel growth is encouraging open source vendor Red Hat to consider establishing a local office next year. Sydney-based Max McLaren, Red Hat’s ANZ general manager, says growth in its business here would justify the investment but it’s too early to treat it as definite. “We’ve always had aspirations to open an office in New Zealand. It’s just a question of when.”

In September Red Hat posted global revenue and operating income increases of more than 20 percent over the previous year, and McLaren says local growth echoes that of the company overall.

Channel business is growing at between two and three times the company’s overall growth rate, says Mark Enzweiler, Red Hat’s global channel chief. “This last quarter more than 65 percent of the volumes of the company went through our partners.”

The company built its business on subscriptions but Enzweiler says it lags in one area. “Renewals weren’t necessarily top of mind with all our partners.” Red Hat has outsourced this function to a third party, but won’t be drawn on the name of provider until December.

Red Hat seeks partners specialised in one or more of its three portfolios. In the past five years, it has diversified to encompass a platform infrastructure business around Red Hat Enterprise Linux; JBoss open source middleware, and Red Hat Enterprise Virtualisation.

Enzweiler is impressed by the degree of specialisation in the ANZ channel, saying such sophistication is unusual. “It is the sign of a robust market. If there wasn’t enough opportunity, you wouldn’t have people specialising in such a narrow field.”

Red Hat is watching opportunities in virtualisaton and the cloud, although Enzweiler is uncertain how the latter will affect the channel. He suggests cloud-specific distribution businesses may evolve. “If you are a cloud provider how do you get your customers? You are not going to be able to get them yourself.”

McLaren says cloud’s capability for reducing capital expenditure is compatible with Red Hat’s subscription model: an annual, operating expenditure alternative to proprietary software’s large, upfront, capital expenditure for licences and the ongoing cost of maintenance.

This country is a small, integrated ecosystem tightly linked with one distributor, says Enzweiler. “Our channel business in New Zealand has done very well. I have been asking our Aussie friends why they can’t do as well as New Zealand.”

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