Red Hat: Who's afraid of SCO (or Novell)?

Q: Have your customers contacted you about the AutoZone-DaimlerChrysler suit? How are you reassuring them that they won't be sued by SCO?
A: Firstly, let me just say that AutoZone is not our customer. We're not sure what flavour of Linux AutoZone is using so I cannot comment. However, it is our understanding that AutoZone was a SCO Unix customer and it did have a contractual relationship with SCO.

Will these suits affect the takeup rate of Linux in the corporate world?
I don't think so. The SCO issue is not new and there are several programs in place -- the OSDL's (Open Source Development Labs) US$10 million legal fund and our Open Source Assurance program to safeguard customers developing and deploying open source solutions.

There's no slowdown for us ... just last quarter we signed over 3,000 new customers worldwide so how can you stop such a big thing? For sure, customers are asking questions but I don't believe people are really afraid of SCO. Notice that the announcements of the suits against AutoZone and DaimlerCrysler came at the same time as SCO's financial results of widening losses [SCO posted a net loss of US$2.25 million for the first quarter of 2004, ending January 31.]

David Lenz, director of sales and marketing for Novell Asia-Pacific, was quoted as saying in 12 months, some enterprise customers would start running Linux on their desktops. Do you agree?
Linux on the corporate desktop is definitely an issue. It's one of our major projects and investments we're working on to deliver a "proper" Linux on the desktop. I don't think it will happen in a very big way in the first year but we're seeing some improvements, and we will deliver very competitive desktop prices -- I don't mean competitive to Novell ... I mean competitive to Microsoft. What I can say is we'll deliver this in phases and you will see some announcements soon.

About Novell getting into Linux, well, we believe that as a company you have to win experience and knowledge in servers first and we have a lot of experience in the enterprise sector ... we have a 90 percent market share.

Novell, with Ximian and Suse, has been setting up alliances in Asia-Pacific. Last month, Novell launched a number of Suse software packages and training programs in Asia-Pacific. How will Red Hat counter this threat?
Asia-Pacific is not new to us. We're not the underdogs. It is Novell coming from behind. We already have alliances with leading Asia-Pacific vendors such as Fujitsu, Hitachi and NEC so we're in a very strong position in this region. So, Novell has to catch-up with Red Hat.

Novell's channel partners have absolutely no experience with open-source software, and Suse has never had a presence in Asia. There's this perception that Suse is strong in Europe but that's wrong. It's only Germany. Our revenue in Europe alone is higher than Suse's revenue worldwide.

Novell and its partners will have a hard time understanding open-source software and Linux.

Any expansion plans in Asia-Pacific over the next 12 months? More alliances or training programs?
We have aggressive plans and Asia-Pacific is our biggest investment in terms of geographic expansion. I can't give specific numbers but I can tell you that we're currently preparing to launch our Beijing, China office, which should be finalised in April or May.

Certain users have been critical about what they say is a lack of effort on Red Hat's part to increase hardware compatibility and support with manufacturers. Have you made any progress on this front?
With Red Hat Enterprise Linux 3 we're supporting seven different architectures. We've built APIs that allow our partners to quickly certify Linux and we have joint development projects with our partners. We're definitely putting a lot of effort into bringing on more independent software vendors.

In November, we had 300 ISVs and today we have 600, so you can see the growth and momentum, and we expect this to continue. The amount of requests we're getting from ISVs for certification is unbelievable.

The emphasis on free software has been central to Red Hat. Do you see Red Hat becoming more proprietary in future?
Our focus is absolutely on open source and it is very important to us. It's a new economic model and Linux is so popular because of its openness. In fact, we will open source products from Sistina Software, a storage infrastructure software company we acquired in December.

Has there been a huge adoption of RHEL 3 in Australia?
We grew over 300 percent in Asia-Pacific over the last nine months and Australia is an established market for Red Hat. We realise that many customers here are still using RHEL 1 due to certification issues with RHEL 3 but we're going to overcome that soon. By end-March we'll be finalising certification for RHEL 3 and you'll see a surge in its adoption.

Where do you see Red Hat and Linux in five years?
In five years, the market share of Linux will be "extremely high". Red Hat will still be the leader because we have market share and the experience, and we'll bring more products to market.

Do you think Red Hat will be acquired during that time?
Well, I hope not! We don't have any plans to sell the company.

If Linus Torvalds "leaves the scene", what will happen to the Linux community?
I don't think anyone is irreplaceable. The community will continue to function especially since we've got other people maintaining the kernel.