For years, Red Hat has happily sold Linux to Unix shops anxious to save money at equivalent or better performance. During this time, the company largely avoided Microsoft, which has tended to compete much higher up the stack. No longer. Microsoft CEO Steve Ballmer argues that one of Microsoft's biggest opportunities lies in enterprise infrastructure and associated application development.
Red Hat, meet Redmond.
Red Hat wants to own the infrastructure market. The company is nearing its initial $1 billion goal, but has a far more audacious ambition: own half the associated middleware market.
This is a direct challenge to Microsoft, especially the manner in which Red Hat aims to go about it. As Red Hat CEO Jim Whitehurst noted in the company's earnings call earlier this year, Red Hat is "laser-like focused on that mission of commoditizing these key (infrastructure) layers" through open source.
It's not a strategy that will endear the open-source agitator to Microsoft.
After all, Microsoft is also focused on these opportunities, as Microsoft CEO Steve Ballmer told TechCrunch:
Biggest opportunity that we never talked about is enterprise infrastructure. Most of that goes to the database and mainframe vendors today who are in the business. We've got four billion in revenue and yet we're a small market share player.
Servers, there are going to be more new applications written in the next five years than any five-year period of time.
The two companies can't help but run into each other. Will they also be able to collaborate? They must. No customer is going to exclusively run either Microsoft or Red Hat technologies. The two have showed an ability to get along, if only a little bit. Can the two come together even as they seek to beat each other to bloody pulps?
Time will tell. But the market is about to get very interesting again. To achieve its goals, Red Hat must increase its investment in JBoss to make it an even better application platform that can effectively compete with Microsoft and its comprehensive infrastructure/middleware/tools suite.
As it does so, it's going to bump into Microsoft SharePoint, which is increasingly used as a platform for building applications, much like Red Hat's JBoss application server. SharePoint has come under threat from Google recently, but this is a battle Red Hat will have to fight, too.
As for Microsoft, I can't see how it can hope to compete with Red Hat's open-source strategy without including a healthy dose of open source, itself. Figuring out how to maintain its profit margins and sales potential, while simultaneously encouraging the growth of its developer ecosystem, is going to be difficult without open source.
It's a battle for the heart and soul of the enterprise, and it's going to get a little messy. It's about time.
Follow me on Twitter @mjasay.
Chris Dibona, head of Google's open source program office, sat down to talk with CNET's Stephen Shankland. In the course of that interview, Chris provided great insight into how Google views open source and contributes back to the various communities from which it derives benefit.
However, it was this response to Stephen's question - "What are the most important open-source projects you ingest?" - that I found fascinating:
The kernel, compilers--GCC, the Python interpreter. Python is very important to us....Java is very important to us, and that's become open-source now. We have some very good Java people working for us....
Once you get past those three projects--the compilers, the languages, the kernel--then you go to the libraries. For us that's OpenSSL, zlib, PCRE. MySQL is hugely important to us. Past that, it starts tapering off pretty quick.
In other words, open-source plumbing matters most to Google. I know that Google uses a range of open-source applications to run its internal operations (some of it public like Puppet, some of it not), but the code that gives Google competitive advantage is plumbing. Open-source plumbing. Everything else is a rounding error.
It occurred to me today that open-source infrastructure providers (e.g., commercial providers of open-source operating systems, databases, application servers, etc.) may have much in common with telecommunications infrastructure providers (like cable, wireless, etc. providers).
Everyone uses their stuff, and generally at a rate that doesn't quite match the value of the benefits derived from it.
Early on we pay a premium for broadband Internet or support for still-buggy but cheaper open-source software. Over time it becomes commodified and our willingness to pay decreases.
What's a company to do?
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