Google displaces Red Hat as CIOs' first choice for value

For the first time in years, Red Hat didn't take first place in CIO Insight's annual Vendor Value Survey. That honor goes to Google. Though Red Hat registers a close second, Google's practice of freely giving away much of its software saw it rise above Red Hat, which took second place in a survey that it has dominated in the past.

CIOs rank vendors according to value

(Credit: CIO Insight)

Two security firms - RSA Security and Check Point Software - took first and third place overall, with Google, Cisco, and Dell claiming second, fourth, and fifth places, respectively. Red Hat claimed the seventh spot in the Overall Value category, but has been the leader in the Software category for years.

Importantly, Novell jumped four places to claim fifth place in the the Software category. But for low customer loyalty scores and Novell would have gone higher in the rankings. Even so, it's a testament to the changes Novell has been making that it performed more strongly than Oracle, SAP, Salesforce.com, and other leading software vendors.

Red Hat, however, is in strong shape, perhaps particularly against Novell, as Sam Varghese writes in IT Wire, with a 92 percent loyalty rating with CIOs. CIO Insight suggests that Red Hat's "responsiveness to customers' needs engender[s] high loyalty levels." In a recession, Red Hat will need to depend on this loyalty to drive renewals and upsells.

Despite losing the top spot to Google, Red Hat remains in a strong position. Google got top marks for giving away software, "continued innovation, and strong moves in the mobility space," but as Google retrenches a bit to prop up its advertising business during the downturn, I suspect it may lose a little favor with enterprise CIOs, leaving the door open to Red Hat to reclaim its value crown.

Regardless, this is also a warning to Red Hat: like Google, Red Hat needs to continuously innovate at both the service and product levels to ensure long-term customer loyalty.