Correct -- Ginni Rometty was CEO, President, and Chairman of the Board. She remains Chairman, while Arvind Krishna is now CEO and Whitehurst is President.
This is the first time in a while that the IBM President & CEO roles have been divided among two different people.
The president title was a thing for people claiming the top spot without being the founder. It doesn't make sense to split CEO & President role between two people, but when the fable is told long enough the people who tell believe it themselves.
It doesn't have to be a strict two in the box situation. I am the President of my company and I brought on a CEO. I have neither the inclination nor the skillset to take on CEO-related tasks, but I head up corporate strategy and other tasks. We both have circles of unilateral action, and we have some areas where we overlap.
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.
> I can’t imagine it going well for an extended period of time.
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.
What exactly is happening when the lead of a smaller acquired company ends up running the acquiring company? Surely there must be a lot of pre-acquisition people near the top who are salty about losing their chance?
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.
A lot of IBM products are in the cloud and the focus from Whitehurst as IBM president is that cloud, containers/K8s/RHOSP, and edge are the big things that will be going on. It will be very interesting to see how RH plays into the broader IBM strategy. Will RH become the platform and IBM becomes tooling, services, and products on top of that platform? Or will RH move to more consultancy and enterprise IT services? Coming from Cisco where the acquired company always gets folded into the mothership, I find it very interesting to see IBM's stance of keeping RH alone and mostly separate. At least for now...
its very possible and widely touted that it could go the other way, in that Red Hat takes over IBM (culturally. Red Hat certainly has a strong enough culture to do that.
I work for Red Hat and wasn't going to comment (as I don't know Paul), but I feel somewhat compelled by so much of the negativity here.
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.
Good for Paul. He has wanted the CEO job forever, and was notoriously bitter about being passed over last time.
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”).
As someone who is a big fan of Red Hat, it horrifies me to see the new CEO be described like that. He sounds like one of the worst people for Red Hat. I admit I despise power seekers and people with tempers, so that's coloring my view a lot.
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.
When I joined Red Hat, I was pretty surprised to find such an "old school DEC" hardball player in charge of engineering. That's what Paul is, but he's not evil. He's effective, and at the most important level he does represent the values we associate with Red Hat (which he helped shape after all). I'd be far more worried if they'd brought in somebody from outside, or from another part of IBM.
Yah similar to zapita's reply below, if this person is a driving force in redhat's past, you probably won't see any changes if you liked what they were doing in the past.
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.
> 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).
> 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.
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.
I wouldn't put so much credence on historical revenue streams. As computing has changed, so have the revenue streams. There's fewer & fewer companies these days building and selling OSes. Linux has done wonders to standardize and commoditize the OS. I think the reality of computing today is that platforms, subscriptions & services are what companies want. It's a very Cloud Computing or Utilities-like conversation at certain levels of many companies. SaaS, PaaS, IaaS, CaaS, KaaS, Managed Services (your PaaS, IaaS, CaaS, KaaS or "X"aaS). We (Red Hat) have even developed (or are developing) Automation as a Service, AppDev as a Service, Digital Transformation as a Service, (Data) Integration as a Service managed services or service offerings. And obviously for Red Hat, it is all on a foundation of RHEL. But to focus on the OS is short sighted. No one believes an OS by itself is the solution anymore. So you can call them add-ons to RHEL, but things like OpenShift, Ansible, OpenStack, Satellite, etc. also have their add-ons in our catalog.
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.
I agree that the world is moving away from the OS-centric model, towards a cloud-centric model. I just don’t think Red Hat is nearly as strong in the new model as it was in the old.
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.
I don't worry about that. We're backed by IBM Cloud now, there was that $34B bet placed last year, there's all sort of cross selling going on between IBM and Red Hat. I imagine we'll see more and more Red Hat software integrated in IBM Cloud services and offerings, and then, we'll have a Red Hat Enterprise Linux which will look a lot like Amazon Linux (which appears to be based on RHEL & CentOS).
Do you think IBM cloud will get more competitive price and feature wise? AWS (and Google and Azure, etc) are overpriced in many ways (dgress charges anyone?). I would love to see IBM cloud be price competitive. If it also then featured first class Red Hat products that could be compelling even to startup and hobbyists. I'd happily pay the same cost I pay now for a VM to get the equivalent CPU/mem/disk in an OpenShift cluster.
My bad! I meant to say "lack of diversification", as in: too much revenue coming from a single product.
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.
A counter-point is that, if you like Red Hat today, you will probably still like Red Hat in 5 years, because the new CEO played a key role in getting Red Hat to this point.
I wouldn't expect significant changes in RedHat just because Paul Cormier got moved up one rank. He isn't new to the company, and had a lot of influence in his previous role.
Oh, he's not going to like the phrase "Oracle-style" at all. Another thing people should know about Paul Cormier is that his hatred for Oracle knows no bounds. There's certainly no love lost between the two companies at any level, but even in that context the depth of his loathing for them seemed notable. Some might say excessive. I was there for eight years BTW.
That is true - the hatred of Oracle runs deep. But when it comes to competitive tactics, they have more in common than the Red Hat marketing brochure would have you believe.
> 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”)
It has to be horseshit. A significant part of Red Hat's value-add is customers can go to them with problems that might not actually be Red Hat's own, and still get help resolving them. "One throat to choke" is the charming phrase I often heard. It's huge for enterprise customers, and a big part of what they pay large sums of money for. I'm sure there are some cases where Red Hat does have to say they can't support something, but doing so willy-nilly would be suicidal.
I work for Red Hat Consulting helping customers with their Red Hat products (especially OpenShift) and I can confirm we often help customers who are using products that aren't ours, or even are competitors with ours. Just yesterday I was helping diagnose a problem with Hashicorp Vault. I've written code for this customer to integrate one of our solutions with it as well. My team has helped with Spring Boot issues (a "competitor" to us) and Liberty, and more.
We try to help with everything.
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.
He famously likes to emphasize the "enterprise" aspect of Red Hat's product offerings. Red Hat is not an open source company - it's an enterprise software company through open source development. It's a really big difference.
Yikes. It's 2020, and emotional abuse (which is absolutely what shouting at people you hold power over is) is not even a little acceptable. When you're an adult, you control your temper.
I was responding to the description of the new CEO as losing his temper to a degree that his shouting can be heard on the entire floor. Which I don't view as appropriate.
As an actual Red Hat employee (also someone who has seen Paul C both at a distance and close up for over a decade), it's a healthy and happy workplace. Also Paul has been effectively doing day to day running of Red Hat as long as I've been here, so I don't expect that much to change.
Big over reaction and this is making him sound far worse than he is. Its more passion than rage with Paul as Red Hat is everything to him an he believes in the company 100%. There is also a lot more to Red Hat for its leadership. Jim is still up a level and then you have Chris Wright the CTO, a genuinely soft spoken sweet man.
Indeed, that is my thought as well. If I worked there I'd want to stay as far away from this guy as possible. Red Hat seems like a pretty big company tho, so probably the average person never interacts with the CEO. But still, the tone gets set at the top, and will filter down.
I've worked with several large firms that had large footprints of Red Hat products and never heard about them being audited. You're confusing them with Oracle.
I worked for Cisco who were big RH users (RHEL, OpenStack, OpenShift, Quay, etc). We were audited and it basically comes up when contracts are renewed. It's not a bad thing, you just need to be honest about what you're using and how much and then just pay the man. Or don't and switch to other offerings. One thing I liked about RH is that they worked with you vs Oracle which was pure evil when it came being audited.
Well, it's not always as simple as 'how many systems' even when you're talking about just an operating system. There's licensing based on cores and/or sockets. Then there's licensing for virtual machines.
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.
> "Red Hat's CEO for the past 12 years moves to take on the role of IBM president"