Red Hat CEO acknowledges competition from Novell during 'world tour'

Red Hat CEO Matthew Szulik had the air of a motivational speaker, citing his company's improving finances and growing user base as evidence of a sea change in the IT industry.

Szulik, who was in Cambridge, Mass., on the tail end of a three-week "world tour" to promote the company's products, services and plans for the future, exhorted a mixed audience of IT industry veterans and fresh-faced college students to commit themselves to a coming struggle between proprietary and nonproprietary operating systems that will "change the world." But he also quietly conceded that Red Hat faces tough competition in the open-source market from Novell Inc. and is years away from displacing Microsoft's Windows on the desktop.

The tour was co-sponsored by Hewlett-Packard and IBM and included stops in Tokyo, Munich, London and the Australian cities of Brisbane and Sydney.

Speaking just blocks from the campus of MIT, Szulik said open-source companies such as Red Hat have to recruit the "best minds" in order to supplant an economic model based on proprietary software with one based on an open-source development.

"Our challenge is not to build the infrastructure, but to find the talent to change the world and compete against the best in the world," he said.

While optimistic about the future of open-source software, Szulik also acknowledged that the company will face stiff competition from competitors, including Novell, which purchased rival SUSE Linux in November.

"They're a new competitor, absolutely," Szulik said about the combined companies, adding that competition is good for the Linux community and for customers. However, he cast doubt on Novell's ability to make the open-source model profitable in the long term.

"The issue is one of different economic models. ...With Red Hat, you have a company that has been working in the open-source world for 11 years and providing service to our customers. Compare that to a company that has been selling proprietary software for 20 years but is now calling itself an open-source company. The question is, Can they transfer to that model?" he said.

He also put a sunny face on a legal fight brought by The SCO Group, saying that it benefits Linux customers, who now enjoy legal indemnity for use of Linux from Red Hat, Novell and others.

Red Hat is waiting for SCO to release copies of source code to support its copyright assertions before it takes a stand on the case. However, the suit is draining financial resources from Red Hat that could be spent funding innovation and growth rather than building "a new wing at [technology law firm] Hale and Dorr," he said.

Looking forward, the charismatic Szulik said Red Hat is focused on the enterprise computing marketplace. He predicted the growth of an open-source architecture for enterprises, as customers deploy Linux on hardware based on Intel Corp. technology and put pressure on Linux vendors to develop middleware and virtualization technologies, simplify system management and stay strong on security.

Red Hat will also stay committed to the open-source model by submitting technology it acquired with its purchase of storage vendor Sistina Software to the open-source community, he said.

Red Hat's recently announced partnership with embedded software maker Wind River Systems Inc. to make a Linux-based operating system for embedded systems will also extend the company's reach into markets for embedded software such as aerospace and automotives, he said.

However, Szulik threw water on the burning hopes of some open-source enthusiasts to soon see Linux replace Windows on the desktop. Calling the debate a question of "Hollywood vs. reality," he spoke of a long, hard battle to replace "12 years' worth of Windows, Visual Basic, Visual Studio ... and Exchange 5.0" in companies with Linux-based systems.

In the home, Red Hat and others also have to pursue a long-term strategy by working with makers of peripheral devices such as Adaptec to make General Public License versions of drivers that will make Linux more user-friendly for consumers, he said.

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