Can an airline exec run Red Hat? You'd be surprised

When former Delta Airlines chief operating officer James Whitehurst takes over as CEO of Red Hat on New Year's Day he'll face the worst kind of doubters--the quiet ones. But Whitehurst could very well take Red Hat to the next level.
Written by Larry Dignan, Contributor on

When former Delta Airlines chief operating officer James Whitehurst takes over as CEO of Red Hat on New Year's Day he'll face the worst kind of doubters--the quiet ones. But Whitehurst could very well take Red Hat to the next level.

Aside from the blogosphere (Techmeme), you won't hear much questioning about the choice of Whitehurst. Perusing the Wall Street research you get the following:

  • "Red Hat wanted a person with no ingrained beliefs about how software should be created and sold," said Steven Ashley, an analyst at Robert Baird.
  • "As with all CEO conversions, there are likely to be a series of derivative personnel changes at Red Hat over the next 12 months: Red Hat's EVP of Worldwide Sales is a relative of Mr. Szulik, for example. Regardless, the change should unsettle the status quo at Red Hat, potentially reinvigorating the firm," said Jeffries analyst Katherine Egbert.

No analyst is going to question the Whitehurst move amid a great third quarter.

But the Linux community will wonder if Whitehurst is one of them. Rivals may pooh pooh that fact that a fly boy is running Red Hat. There will be some upheaval--as there always is when a new CEO takes over.

In the end though don't be surprised if Whitehurst shines. Here's why:

Matthew Szulik: Szulik isn't going to hand Red Hat over to just anyone. At some level, you have to trust Szulik's choice. After all, Szulik has made a lot of great choices over the last nine years. Besides who would have thought that selling free software would actually turn out to be a good business?

There's precedent for outsiders to do well. Before we pooh pooh Whitehurst we should remember Lou Gerstner. Remember him? Oh yeah, he's the guy that transformed IBM into a services juggernaut. The funny part of the story: Before IBM Gerstner was CEO of RJR Nabisco. Before RJR Gerstner was at American Express. What did Gerstner know about mainframes? Probably nothing, which was the point of the hire in the first place.

Corporations on many levels all look alike. Let's face it Red Hat isn't some little startup trying to convert people to Linux anymore. It's a well run business selling to big corporations. Red Hat also plans to own half of the worldwide server market by 2015. To hit that goal Red Hat needs scale. In that regard, Whitehurst is well schooled. He has helped run a massive business in the most cutthroat industries in the world (airlines). In the end you sell stuff: Widgets, airline services, laundry detergent and software. It all looks alike after a while.

On Red Hat's earnings conference call Szulik noted:

Jim joins Red Hat after most recently serving as Chief Operating Officer of Delta Airlines, a company with over $17 billion in revenue and approximately 55,000 employees. Jim played an important role in the financial and operational restructuring at Delta Airlines. Prior, Jim was a partner at The Boston Consulting Group and the combination of work experiences, operational and strategic in deploying technology and processes to improve operating performance and efficiency while boosting customer service across the enterprise, is highly relevant to Red Hat’s future. For me, I wanted to find an executive with an open mind and an unencumbered historical perspective.

That's a long winded way to say scale matters. And Whitehurst knows scale.

Whitehurst has a geek streak. On last night's earnings conference call Szulik noted:

As we went through the recruiting process, we did interview a number of people that I am sure are familiar to this audience listening from the technology industry and what we encountered, of course, was in many cases a lack of understanding of open source software development, a lack of understanding of our model. And as importantly for me, the open mindedness that would come to both the creation of new economic models and contemporary thinking as it relates to software development.

In my first meeting with Jim Whitehurst, we discussed the four Linux distributions that he was running on his home personal network. He was running Fedora Core 6 and Fedora Core 7 at home. He was running Slackware at home and he was an experienced software developer up until the time that he was at BCG (Boston Consulting Group). So we are getting a technically savvy executive who happens to have strong operational, financial, and strategic skills and it was in my view that in comparison to his peers that were finalists for the job, that he stood head and shoulders above, in light of all of the qualities that we were looking for in my successor.

Do these aforementioned items eliminate my doubts about Whitehurst? Not completely. But there are enough positive factors for me to be cautiously optimistic about the fly guy.

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