June 19, 2008 7:00 AM PDT

Red Hat chief: We're 'tough to do business with'

BOSTON--Red Hat Chief Executive Jim Whitehurst says his company needs to improve its approach to its customers and partners.

Speaking here on the first day of the Linux specialist's annual user conference, Whitehurst said his company needs to work on its approach to "mundane" issues such as its own internal systems and managing customer records.

"There is still a lot we need to do around execution. One thing I have heard from customers and partners over the last few months is that we are basically kind of tough to do business with--great technology but not necessarily the easiest company to do business with," he said Wednesday.

Jim Whitehurst Jim Whitehurst,
CEO, Red Hat

Red Hat Exchange (RHX), launched at last year's Red Hat Summit, is one example of where the company had listened to customer feedback and changed its processes accordingly, said Whitehurst. RHX was basically a portal to allow Red Hat customers to download applications, in a similar model to Salesforce.com's Application Exchange, but it had failed to gel with customers, according to Whitehurst.

"Quite frankly we found out in the first six months that our customers don't want to consume software via an exchange so we have morphed that into a fully fledged open-source ISV program," he said, using the acronym for independent software vendor.

As well as improving how the company interacts with customers, Whitehurst said that that his new employer's future lies in becoming an open-source adviser to end-user companies to allow them to share internally developed software with the rest of industry.

Red Hat has done very well so far with a business model of making community-developed software enterprise-ready, but there is still a whole lot more that could be achieved, said Whitehurst.

"One thing is clear: we have built a great business around open source, but I would argue that that is a specific sliver of open source," he said. "In my view...that is the tip of the iceberg; the vast majority of software is written in the enterprise and not for resale. And the vast majority of that is never used; the waste in software development is extraordinary."

Whitehurst claimed Red Hat's future lies in helping and encouraging companies to share internally developed software with other businesses, thereby increasing the number of open-source applications and platforms available.

"For open source to provide the value to all our customers worldwide, we need to get our customers as not only users of open-source products but truly engaged in open source as part of the development community," he said.

Whitehurst replaced Matthew Szulik at the beginning of this year. Although his previous role was chief operating officer of Delta Airlines, he has a background in consulting and IT having worked at the Boston Consulting Group. He also has a degree in computer science from Rice University in Houston, an MBA from Harvard, and a general degree from the London School of Economics.

Andrew Donoghue of ZDNet UK reported from Boston.

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Red Hat Inc., ISV, open source, Boston, CEO

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Perhaps most businesses are motivated by greed and releasing their internally developed software to competitors for free isn't exactly a money making prospect? Could be!
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