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Issue of December 2003 

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In Person: Open Source Operating Systems

''Our primary competition will always be proprietary software''

Novell recently announced that it would acquire No. 2 Linux distributor SuSE for $210 million. And IBM, a big supporter of Linux, said it will invest $50 million in Novell. That makes a stronger case for SuSE and this development could be a threat to Red Hat. We asked Javed Tapia, Director-India, Red Hat to comment on Novell's acquisition of SuSE.

How does Red Hat perceive the acquisition? Were you caught by surprise?

Attractive markets attract new players. We expect these moves. It simply validates the enormous customer interest and market opportunity in Open Source technology, and the progress Red Hat has achieved as the industry leader.

Won't this be significant new competition?

Competition is old news for us—our primary competition has been, and will be, proprietary software. In fact, we compete everyday with the biggest software company out there. We have never backed down from our vision because of competition.

Novell sells 99% of its software the old-fashioned way—it's proprietary technology. So now they are testing waters. Putting a foot in both camps. It looks like they might attempt a challenging feat no one else has been able to accomplish—build a hybrid company that works. On top of that, they face the typical integration challenges that have distracted so many companies.

How will you adapt your business strategy in response to this development?

We're committed to remain a pure-play Open Source technology company. That's what is creating value for customers, and our results speak for themselves (AOL, Amazon, seven out of 10 Wall Street institutions, financial results, No. 1 market share, No. 1 in partnerships). There's no reason now to reinvent our business strategy; Novell's move validates the soundness of our strategy.

Our vision goes well beyond an Open Source Linux operating system. That's all Novell is acquiring. Red Hat, on the other hand, is building a complete computing architecture based 100% on the Open Source model.

(Ed: See the News & Analysis section for more details on Red Hat's plans for Open Source Architecture.)

That's one reason we're the industry leader. At the end of the day, that unwavering commitment to Open Source distinguishes us from Novell and will make a huge difference to customers and partners.

Did you ever consider acquiring SUSE?

Red Hat Inc. thoroughly investigates acquisition opportunities and focuses on issues where we can further our customer and shareholder interests.

Why did IBM invest in Novell?

We can't speak for them. But clearly Linux is core to their strategy, and they would like to see choices for customers. We have a strong partnership with IBM, as evidenced by our recent announcements of Red Hat Enterprise Linux 3, which provides a common operating system for all IBM servers and mainframe platforms.

How will this affect financials?

Our business strategy is sound. Our results will speak for themselves.

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