Red Hat’s new CEO on surviving inside Big Blue: 'We don’t participate in IBM's culture. It’s that simple'
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- News link: https://www.theregister.co.uk/2020/04/30/red_hat_ceo_interview_ibm/
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If there’s a downside for Paul Cormier, it’s that after nearly 20 years with the company he wasn’t able to celebrate taking the top job on stage in front of his staff at Red Hat's annual summit this week. Instead, he’s communicating via webcam from his home office; the conference has gone [1]online-only mid-pandemic.
But, just as with the world outside, there is a lot of flux within Red Hat. Cormier took over from Jim Whitehurst on April 6; Whitehurst is now president of IBM following Big Blue’s purchase of Red Hat for $34bn, a deal [2]completed in July.
IBM also got a [3]new CEO this month, Arvind Krishna, and the first thing he did was tell the world that the tech behemoth’s main focus from now on would be the hybrid cloud; the very department and technology Cormier sits atop.
And so the culture clash between the buttoned-up, bureaucratic Big Blue that lives on consultancies, services, and hardware, and the employee-empowered Red Hat that moves fast and thrives on open-source software – a clash many have warned about since IBM’s purchase was [4]announced in October 2018 – looks as though it is about to hit fast-forward.
Cormier’s position, however, is that there is no culture clash because: “We don’t participate in their culture. It’s that simple.”
Is he arguing that Red Hat can exist entirely separately from its new owner when its products are now that business’s main focus? Well, yes. “In terms of IBM and our strategy, we do our own things,” he told El Reg on Wednesday. “I have my own HR, own legal, own CFO, own IT. We haven’t, and have no, plans to consolidate even our back office.”
Hard times with hardware
We push a little harder. With IBM looking to Red Hat to grow sales and profits, by shifting its vast customer base to the cloud, or picking up new ones in the cloud, what if Big Blue told Red Hat it is, of course, independent but it may want to take a serious look at optimizing for IBM hardware?
RHEL pusher Paul Cormier appointed CEO to lead Red Hat into the IBM era [5]READ MORE
Cormier laughs. “Ain’t gonna to happen. It’s not going to happen. They understand that would disrupt Red Hat’s side and disrupt our partners.” He references Red Hat's [6]announcement this week with Microsoft where the Windows giant will integrate Red Hat’s OpenShift with its Arc software.
“We work closely with Amazon, we work closely with Google. We have to keep those relationships intact and the only way we could do that is by continuing to show our neutrality and our independence. Everybody understands that.”
He answers the obvious next question before we can ask it: “Arvind [Krishna, IBM’s new CEO] understands that. That was one of the driving premises for the acquisition. I live it every day. Not even a hint of it comes through.”
Cormier also notes he reports directly to Krishna, and outlines their relationship as “both understanding the numbers we are trying to shoot for. We agree on the right numbers, what the sales look like and we got off and do it.”
Can Red Hat avoid being assimilated into the IBM borg by bringing in the money? Possibly. What is clear is that Cormier doesn’t give much thought to, nor feel a part of, the larger machine he is now within. “We don’t care about hardware. IBM cares a lot about hardware. We are hardware agnostic.”
He is equally bullish about Red Hat’s free, community-supported cousin of Red Hat Enterprise Linux, [7]CentOS , which may not be the sort of thing IBM sees as valuable down the line. “We’re seeing a lot of take up on CentOS Streams. There’ll be a lot more focus on CentOS Stream; we’re following what our customers want.”
Winning
Cormier appears to believe that when there are any clashes, it will be resolved in Red Hat’s favor. “We don’t for the most part have competing solutions,” he tells us.
“For example, when they bought us, they had their own Kubernetes-based system and in the end they decided to retire it and just use OpenShift. We look at them as a partner. An important partner but they understand that OpenShift will cut into some of the places where they have proprietary products. They totally understand that. We need to go there to stay competitive and we’ll go there.”
Where does this confidence that IBM won’t trample on Red Hat if it impacts its bottom-line come from? Cormier’s relationship with Krishna. “Arvind was a great choice for this. Arvind and I are really the ones that hammered this out before and during the acquisition. And so he totally understands why it’s important for both Red Hat and IBM to have this level of independence.”
We move to the next big question for Red Hat. The company’s enormous success was built on its decision to go all in on a subscription model for its enterprise-grade Linux, which provides 24/7 tech support, expertise, certifications, and so on, to paying customers. The software remains free and open-source; you're paying for on-demand assistance and peace of mind.
How is that going to hold up amid the general move by organizations to hybrid and public clouds, where cloud providers offer their own technologies, from virtualization and storage to containers and orchestration to serverless interfaces, as well as support and expertise? In other words, customers may be tempted to migrate to platforms where everything is integrated, and feel they don't need Red Hat, and its software, anymore.
Cormier sees it all as one big happy family. “The platforms are really, really important. RHEL is a platform. OpenShift is a platform. OpenStack is a platform. But everything else builds around that platform.”
He gives an example of two storage companies that Red Hat bought: “From the beginning the intent was not to go into the storage business to compete with EMC or NetApp; the intent was to have a storage offering that would enable platforms – RHEL, OpenShift, OpenStack – to have a storage layer to allow the application to get at the storage it needed no matter where it lived.”
You get a RHEL! And you get a RHEL!
Red Hat is now bringing in middleware but, he says, “it’s RHEL underneath.” A new demo at Red Hat’s annual summit this week showed how virtual machines, running on a hypervisor, and containers, running on a container engine, could be pulled under the same umbrella. “It’s all sort of tied together,” he explains, adding: “Linux is the foundation.”
New IBM CEO Arvind Krishna says hybrid cloud will be bigger than mainframes, services, middleware [8]READ MORE
To hear Cormier tell it, a shift to hybrid cloud is not a risk to Red Hat’s revenue model, but a growth opportunity. “Hybrid cloud is going to continue to grow, Linux is going to continue to grow; Linux is the foundation for hybrid cloud so as hybrid cloud grows, Linux grow,” he says. And with all of that, there will be a need for management, automation, and security, which is where Red Hat comes in.
With Cormier stressing that Red Hat will work with everyone – Amazon, Google, IBM, Microsoft, you name it – we ask him to name his competitors. He says most companies in his field are “coopetition” though lists VMware as Red Hat’s biggest competitor, although he doesn’t rate their chances of knocking it off the top spot.
“They’re coming from a legacy world and they’re trying to do their own Kubernetes, which means they’re trying to do their own Linux, which means they’re trying to become a Linux provider overnight – and we have a 16-year head start on them.”
But back to the corporation that now owns Red Hat, regardless of how Cormier sees the relationship, IBM: what is in it for Red Hat?
“They will help us bring our product to places we’ve not been before. We sell in, like, 60 countries; they are in 160 countries. They can bring us into deals we might not even be aware of. We are good at winning over the tech people; they are good at the C-suite.”
If that’s how IBM also sees the relationship working with its new, somewhat unruly step-child, Cormier may be onto something. But you can’t help but wonder whether the old maxim that “culture beats strategy” will be put to the test as the tech industry moves toward the hybrid cloud. ®
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[1] https://www.theregister.co.uk/2020/04/28/red_hat_summit/
[2] https://www.theregister.co.uk/2019/07/09/ibm_red_hat_acquisition/
[3] https://www.theregister.co.uk/2020/04/07/arvind_krishna_becomes_ibm_ceo_letter_to_staff/
[4] https://www.theregister.co.uk/2018/10/28/ibm_redhat_acquisition/
[5] https://www.theregister.co.uk/2020/04/06/red_hat_ceo_paul_cormier/
[6] https://www.theregister.co.uk/2020/04/28/red_hat_summit/
[7] https://www.centos.org/
[8] https://www.theregister.co.uk/2020/04/07/arvind_krishna_becomes_ibm_ceo_letter_to_staff/
[9] https://go.theregister.co.uk/tl/1936/-8578/how-to-build-your-digital-experience-portfolio?td=wptl1936
IBM
Many years ago being part of IBM was a good thing. The ONLY thing that IBM seems good at now is getting rid of more and more expensive (read "old and experienced") staff to feather the managers bonuses.
I would not WORK for or buy Anything from IBM now. as for RedHat, Give it time. IBM will start importing the suits to "rationalise" the RedHat business, before finally killing it with a thousand cuts.
Re: IBM
"I would not WORK for or buy Anything from IBM now. as for RedHat, Give it time. IBM will start importing the suits to "rationalise" the RedHat business, before finally killing it with a thousand cuts."
Gini is gione now, there is a new CEO in charge and changes will be made.
Re: IBM
On the other hand IBM has imported Red Hat's CEO, Jim Whitehurst, as president of IBM
It is the IBM PC again
A business unit that does not follow IBM bureaucracy and rules but gives them enormous advantage. Just like then, it is just a matter of time that the bean counters and bonus-chasers get hold of it and milk RedHat to its bones.
Re: It is the IBM PC again
Having personally lived thru that experience I can say that there is no doubt that will happen.
Re: It is the IBM PC again
There's many other examples, especially of companies bought by IBM.
Lotus and Tivoli spring to mind, but you have many others like ROLM, Transarc, Data Sciences. Sequent. Informix, Rational, Candle, XIV etc. The list goes on and on.
Hear about any of these recently? No. I thought not.
Red Hat will continue as an IBM brand probably, like Tivoli, but over time, the culture will be brought into line, and the Red Hat identity will be lost.
Re: It is the IBM PC again
An example of the mindset that takes over... I managed an IBM team that specialised in the supply of customised Desktops to customers. Secenario was that customer goes to their dealer with a request for 10,000 boxes over two years, each with cards and software over and above the standard spec. Dealer maybe has a number of customers like this. So my team spec a package for factory build, complete with costs and delivery schedule, for the dealer. Everyone delighted.
I casually ask dealer who is supplying the Servers. Dealer says, I cannot sell IBM Servers as customers want rack mounted of which IBM do not have a model. I feed this correspondence up the chain to the Lab who reply in terms that indicate they are unaware of this customer need and in any event the plan for this year and next has been agreed with Corporate. So maybe a rack mounted Server is about 18 months away. PC Business goes down the toilet.
"We are good at winning over the tech people; they are good at the C-suite."
Which means that I have to be good at disabusing senior managers of the false notions that they picked up at demos from the likes of IBM and RedHat. Our latest battle was persuading them that Satellite didn't work they way that they thought it did and while it could be used to coordinate and schedule what they wanted to do, it was a different suite of software altogether that did the actual job. That was two days of wasted life I'll never get back.