Red Hat's newly appointed chief executive, Jim Whitehurst, has two masters to serve: Wall Street, and the open-source community. Failure to keep either happy will have its consequences, both damaging to his business.
Indeed, as Red Hat's rival Linux distributor Novell found out when it made its controversial pact with Microsoft: what the community gives, the community can also take away, and Novell has since struggled to regain the momentum it attracted following its acquisition of the Suse Linux distro in 2003.
Jim Whitehurst believes he embodies the right mix of credentials for Red Hat. As the former chief operating officer at Delta Air Lines, Whitehurst has a proven background in managing a mature and established business, but also has the geek credentials — he studied computer science at Rice University in Houston, Texas — to win over the community's more zealous elements.
ZDNet.co.uk caught up with Whitehurst, who took over from former Red Hat chief executive Matthew Szulik at the start of this year, at the company's annual conference in Boston to find out what he thinks he bring to the business and what he has learned so far.
When you joined Red Hat what was the main thing you thought you could bring to the company?
I think disciplined execution. Red Hat is almost an embarrassment of opportunities; there is so much that we can do and so much value we can provide in so many areas. All that said, we need to focus and we need to execute and make sure that, the things we do, we fully resource and do well. Also, [as regards] processes and systems: a few short years ago Red Hat was a $50m [£25m] business; now we are a $700m business. It has grown very rapidly but, during that growth, we haven't spent that much time on our processes and systems.
Say if this job didn't work out and you had to go back to Delta Air Lines, what do you think you have learned in the last six months at Red Hat that you would take back with you?
It makes me want to cry, the idea of going back. We have got process and system issues and we have got clear ways to improve those things, but we are still ridiculously profitable. I would much rather have a fantastic business model with execution issues than a horrible business model with flawless execution.
Again, I think I would mainly just be depressed. I think the thing that is most extraordinary to me is — and I was a consultant before with Boston Consulting Group and have worked for companies across the world — I have never seen so many bright, energetic and talented people. Because we have a mission we attract and inspire extraordinary people. I don't know how you bottle that, but it's extraordinary.
A key learning associated with that is that I have been in a situation trying to change culture and change a business model; it is so much harder to change something established than it is to grow something new. Fundamentally, being an attacker now is so much better than being an incumbent — it's incredible.
When you run an airline, you will always get people who go: "You idiot, don't you get it? The Southwest [a US airline] model is the successful model: fly point-to-point, single fleet. They make money and you don't. Why can't you figure this out?" And you look at them and say: "Really, I am not a complete idiot, but I can't get from here to there. I have 10 different fleet types, all of equal size."
I look at some of the older, established IT companies and I think they get where things are going but it doesn't matter: just because you know where things are going doesn't mean you can get there.
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What are the ethical restrictions of working for an open-source company? What can't you do that the chief executive of a proprietary software company could do, for example?
Are there some companies out there that I would love to buy that we almost can't? Yes. There is a substantial reduction in revenues that is associated with moving something from proprietary to open. You look at examples where you think: "I would love to have that but, if we buy it, then we have to open it".
We need strategic clarity as part of our culture and who we are, and that does foreclose some options. Over the next 10 years, would [a company] be better open and could we build a business model around it? Yes, probably, but I can't justify a valuation premium now and say I am going to pay based on these revenues and I am going to open source it, providing a lot of value to the customers, but a lot of that value is actually in my revenues declining a lot. Generally, I think the power of consistency in our culture and in our messaging is worth the trade-off.
Did you talk to MySQL before they were acquired by Sun?
Frankly, you would have to ask Matthew [Szulik], as they were acquired within a month of me starting. We have always had a great relationship with MySQL. My concern with Red Hat being in the database business is very simply that most databases run on Red Hat. We performance tune the Linux kernel before it goes out so that it works well with the major databases that people use. Can we really claim that we have performance tuned for your MySQL database or your Oracle database if we are competing with it?
I am not saying that we are never going to do anything that competes with people we work with, but our software works so well with Oracle and MySQL, why [would I] want to get them and customers concerned? To me, there are so many other areas where open source can add value.
You studied in the UK at the London School of Economics and also in Germany, so you are pretty familiar with Europe. Do you see different attitudes to open source in Europe compared to the US?
Absolutely, I think the relative sensitivity around the need for open standards and the power of open source is just much higher in Europe. I think that is a [result] of regulatory authorities that are doing a good job minding the store, and I think the fact that...
