Red Hat execs

Red Hat “…quietly confident” about Asia

(Pic above L-R): Red Hat ASEAN’s new GM, Chia Wee Luen, and Damien Wong.

During Red Hat’s recent business update, its VP and GM of Southeast Asia, Taiwan and Hong Kong (SEATH), Damien Wong, said that Red Hat is the only open source company which has over a billion dollars in revenue.

Having made their first billion in 2011, the enterprise-grade open source software provider hit its second billion just three years later, and today enjoys a continuous 64 quarters of growth in revenue.

Wong pointed out, “Other companies of similar size (as us); very few (of them) can achieve 20-percent year-on-year growth. It’s just increasingly harder to drive growth at the size of business that we are.”

And yet they still do, a feat which is made all the more sweet this year, as Red Hat celebrates their 25th year.

President and CEO, Jim Whitehurst, described Red Hat’s fourth quarter as being a strong finish to the year. “We maintained strong subscription revenue growth in both of our major technology categories during the year.”

He also added that Red Hat continued to expand its position with customers as a trusted advisor and strategic technology partner, enabling initiatives focused on digital transformation and cloud computing.

“This position helped drive a 50-percent year-over-year increase in the number of deals over USD1 million during the fourth quarter, as we benefited from strong cross selling and high renewal rates within our top deals.”

Overall, there was a 23-percent revenue growth of USD772 million, from the previous financial year.

Subscription revenue from Red Hat’s App Dev related and emerging tech related portfolio grew the fastest at 39-percent.

How do they do it?

According to Wong, the company has grown to beyond just Linux and operating systems. When it first began 25 years ago, it had a total addressable market (TAM) of USD8 billion.

Today, this has grown to a USD66 billion projection by 2020, as Red Hat expands it offerings to virtualisation, middleware, cloud management, platform-as-a-service, storage, infrastructure management, and more. In other words, it offers an arsenal of tools that enterprises today can leverage to transform digitally.

“In the new environments we operate in, companies are recognising digital innovation as the difference between success and failure,” Wong pointed out.

He also attributed Red Hat’s strong growth to its presence in a diverse range of sectors; the company isn’t impacted by slow growth in one sector because there are other sectors to fall back on.

“Open source is increasingly seen as strategic for enterprise businesses. Digital innovation (predominantly) comes from the open source world, so there is greater acceptance of it for digital transformation now,” Wong said.

Emerging tech growth

Wong also opined that hybrid cloud is starting to be a reality today.

He has observed companies adopting public cloud, but also eventually moving or extending it into a hybrid cloud set up with their own internal IT environment.

Open Stack, is recognised as one of Red Hat’s fastest growing product, and it is a cloud infrastructure platform that allows companies to leverage the benefits of cloud in their own environments.

Wong himself, observed that telcos see Open Stack as a basis to support their 5G development efforts.

APAC contribution

The Americas region at 57-percent still overtook EMEA and APAC in terms of bookings for the 2018 financial year. The APAC region contributed 17-percent, while EMEA held second place with 26-percent of total bookings.

Wong said, “The rate of growth could potentially accelerate in Asia. It depends on how quickly enterprises adopt.”

He noted for example, increasing interest in OpenShift, Red Hat’s platform for app development, and especially DevOps initiatives. “There is interest by large enterprises to support rapid development of modern applications.”

He pointed to Red Hat’s new office in KL, as a sizeable representation of their confidence that more can be achieved in Asia. “We are quietly confident,” he concluded.

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