Paul Cormier Replaces Jim Whitehurst as Red Hat CEO
itprotoday.com
itprotoday.com
> "Red Hat's CEO for the past 12 years moves to take on the role of IBM president"
President seems like second-in-command, below CEO. (And the outgoing CEO was both.) Am I understanding that right?
This is the first time in a while that the IBM President & CEO roles have been divided among two different people.
Why is that?
I don't think there are many modern examples, but the idea of consensus based decision making isn't new, and doesn't appear to be intrinsically flawed.
Consider the origin of the word triumvirate. While the first one ended less than optimally for all concerned, we have a slightly less violent way of dealing with organisational promotion and succession now.
Personally I love the idea of having three equal heads of state, especially if their decision and voting behaviours are obliged to be published.
But I also like the idea of proper democracy. I'm Australian, and I don't think we have an actual democracy here - just a poor facsimile. I think in the USA it's even more distant.
At the end of the day I hold a plurality (and currently a majority) of shares and I'm the sole founder, but unfit to be the CEO, at least in my opinion. It's another form of delegation.
https://news.ycombinator.com/item?id=22205335
https://news.ycombinator.com/item?id=22198016
https://news.ycombinator.com/item?id=22200653
There was discussion about the matter on the post about Arvind Krishna becoming IBM CEO, but it was somewhat buried:
It will be interesting to see, how his management style is going to impact Red Hat over the coming years. Considering his background and acumen, I feel like there is going to be a stronger focus on tailored services and specific solutions for organizations. They are already very active in the health care and financial industry, so this could be an area they might expand.
Red Hat, like all companies, is not a monolith. It's a huge mix of people from different places, cultures, etc. It's a salad bowl of personalities, values, and priorities.
Somehow we come together to make some amazing products. As I mentioned above I can't comment on Paul because I don't know him, but I can comment on what I've seen at Red Hat.
We are super forgiving about "license violations." I've never seen the "Oracle tactics" and if I do, I'll probably quit. IBM is not infecting Red Hat, in fact it's the other way around. I don't interact with IBM at all but from what I've seen at a distance we are spreading our culture to them. I don't agree with every policy of ours regarding RHEL and subscriptions, etc, as I feel it disincentivizes community usage too much, but I've never seen it used punitively or aggressively against anyone, especially our customers.
I choose to remain optimistic that the future is bright, until there's actual evidence that it may not be true. Jumping to conclusions early is at best unproductive and at worst could become a self-fulfilling prophecy. I'm excited to see what the future will bring.
Don’t expect a revolution in Red Hat’s strategy or culture. Paul was already extremely influential, especially on product and R&D which are not Jim’s strong suits.
Things to know about Paul:
- He is very competitive and has a zero-sum approach to competition: for him to win, someone else has to lose.
- He has a bad temper. If you work on the same floor as him, you will hear yelling.
- He doesn’t shy away from Oracle-style tactics. Expect customer audits to get more hardball; more aggressive use of anti-competitive bundling (“if you use this competitor’s product on RHEL, we will not support that RHEL host”).
> Expect customer audits to get more hardball; more aggressive use of anti-competitive bundling (“if you use this competitor’s product on RHEL, we will not support that RHEL host”)
I can't speak on whether that will change or not since I don't know the future, but it wouldn't be an easy thing to move. It's deeply embedded in our culture.
And that will be the end of RH products in my shop. Fuck that noise, if you treat your customers like adversaries, I won't be one of them.
I have always been optimistic about Red Hat's future, but this has me very worried. Red Hat has done so much good in the world, and it would suck to see them shrink or disappear. That said tho, I'd rather they go extinct than become evil. The latter suddenly seems like a possibility. I sure hope I'm wrong.
Brings to light an understanding of things like systemd though. I can understand how a culture like this would promote systemd's "all or nothing" approach.
The thing is, this is how Redhat Wins and has been winning ... I think redhat won't disappear because of this leadership style, but this is how it has been getting contracts, making money, getting sponsorships, and being attractive enough to be bought by IBM.
Very true. Red Hat is a very successful company by any measure. Paul played an important role in making that happen.
At the same time, Red Hat also has a major problem which limits its long-term growth potential: lack of meaningful diversification. RHEL is still the lion's share of their revenue. It's a powerhouse of a business, but its growth is definitely reaching a plateau. So what comes next? As far as I can tell, the answer is: Openshift and Ansible. Both are successful products, for different reasons. But can they grow revenue fast enough to compensate for RHEL's gradual decline? The answer seems to be "not yet". I think Red Hat reached the same conclusion, realized that their stock price would likely peak in 2019/2020 as markets realize the problem, and decided to sell.
And here's the thing: Paul also owns this problem. The failure to differentiate happened on his watch. If you believe Openshift/Ansible revenue is already on the same growth trajectory as RHEL, then success is a matter of execution, and Paul is the right guy for the job. But if you believe that Ansible and Openshift, while good, are just not as game-changing as RHEL once was - then no amount of execution will solve that problem.
EDIT: I meant "diversification", not differentiation! My bad.
Red Hat almost doesn't sell RHEL by itself anymore [0][1]. RHEL is lumped into OpenShift, Quay, OCS, OpenStack, RHV and more often than not sold along side Ansible, Tower, JBoss, AMQ, Fuse, DecisionManager, etc. So, the revenue streams are being bundled together which makes it harder to tease out which product is pushing the Total Revenue line. Our integration with IBM might make that even harder to tell since they love to bundle everything into Cloud Paks [2]. You can review our 10Qs to understand our Revenue performance.
What do you mean we lack differentiation? From who or what? Microsoft? AWS? Google? Canonical? SuSe? Apple? VMware? Pivotal? Docker?
When we got acquired, we were the first $3B Open Source company with double-digit percentage growth [3]. And I think there is a brawl going on for big Corporate IT Cloud $$$. You might make the case that Red Hat was completely outgunned in a scenario where a $3B company wanted to compete against $100B companies (AWS, Google, MS, IBM).
[0] https://www.redhat.com/en/store/linux-platforms
[1] https://www.redhat.com/en/store/red-hat-middleware
[2] https://www.ibm.com/cloud/paks/
[3] https://www.redhat.com/en/about/press-releases/red-hat-repor...
I did not mean to say there was a lack of differentiation - that is a much more subjective and controversial topic.
What I'm talking about is much more straightforward: most of the money comes from RHEL. RHEL is not growing as fast as it used to. And other sources of revenue, like Openshift and Ansible, are not growing fast enough to fill the gap.
Right, but that only strengthens my point. Red Hat is bundling add-ons with RHEL in an effort to boost add-on sales. Without the bundling, those products would be doing considerably worse in the marketplace.
> So, the revenue streams are being bundled together which makes it harder to tease out which product is pushing the Total Revenue line
Again, this supports my point. Given the historical importance of RHEL revenue standalone, there is no good reason to bundle it with other streams, other than to hide something. What is being hidden, presumably, is exactly how much Red Hat still depends on good old RHEL renewal, as opposed to genuine demand for their new products.
So, I don't believe we're intentionally trying to hide revenue deltas in one product or another. I think that as computing has changed, customers are no longer asking if an OS can run these 1, 2, 3, dozen apps or network services on a single machine. Instead, they're asking for platforms or services that run their 10K or 100K apps/services in elastic, scalable and manageable ways. And we have platforms for those customers. And those platforms and service generally try to optimize for density and utilization. So that frees up resources for new apps and services.
Red Hat was an uncontested leader and innovator in the OS market. In the cloud market... not the same story. The gap in revenue between RHEL and everything else illustrates that.
Sounds like he'd be better suited to the IBM CEO role.
Followed by:
>zero-sum approach to competition
>bad temper
>Oracle-style tactics
Sounds like what's good for Paul is going to be bad for a lot of employees and customers.
They are going to irrelevance together.
Oracle was really nasty in some of the licensing scenarios, IIRC. If you ran an Oracle DB on an unlicensed platform in a VM (such as VMWare), then when you got audited, you needed to pay for how many cores/sockets were in the physical server, rather than just how much CPU your VM was using.