Expanding Red Hats Base
Do you see the movement toward the cloud as an opportunity to start moving to smaller customers, expanding your base? Certainly. As we move further down market, we clearly don't have as large an ecosystem for small business as does Microsoft. So one thing that certainly accrues to our benefit is fundamentally changing the computing paradigm. Consuming computing cycles via a grid in the end works for us because grids are highly likely to run Linux. We need to make sure it's our Linux, but it will almost for sure run Linux.I think it may also be our heritage, but we don't get religious in terms of how exactly the cloud develops. With one of our very large customers that runs over 10,000 servers, we've done tests live migrating stuff to the EC2 cloud and back, and, you know, all that works great. But the CIO's point back to us was [that we were] getting into nickels in terms of the difference for him to source at that kind of scale versus Amazon or anybody else to source, and so he says, "I don't want to pay the average cost. What I want to be able to do is [have] you find me one of your other customers-like a bank that's not using their systems as much at night or a disaster recovery site-and I want to be able to migrate over and use their cycles. I'll pay them, not average costs, I'll pay them the marginal cost. They're not using the cycles at all, they'll get paid, and I'm actually able to source cheaper than Google or anybody else who has fixed costs." And so, we're working with customers-this is still kind of early on-in thinking about how we not just make grids into public utilities, but also how we potentially open up customers to use each others' infrastructure. We don't know what the model is; we just want to make sure it's doable. We want to make sure we have the technology in place to secure it. If you're a bank, and you're going to let somebody else come in at night ... you want to make sure you have airtight, bulletproof security, right? You've got to be able to manage all those workloads, all the components associated with that, so we're really working on the technical side now. We think that we, as the leader of open source and because we're open source, can be a trusted partner in doing that. We can't come back and gouge you later, because you can stop paying us. I understand why people like Google are basically running their own applications, on their grid, and not allowing third parties necessarily to come in. Because, how do you know they work? How do you know they're certified? Well, we've done that; we've done that heavy lifting. If it's certified on RHEL, it's certified to run in any instance, including cloud. What about software appliances? Could we be moving to a situation where a customer isn't necessarily worrying about the operating system and the application working together, since the application vendor has worried about that? That's part of what we're doing-for an ISV, we're making it simple. It's not saying, "Well, I've got to develop my certification and everything else for an appliance here, and then I need to make sure it works on Red Hat, and I need to make sure it works here and here." Do it once, and it's all there. I think appliances will continue to grow in importance. To have all that be one standard certification is powerful.
So, certainly, by changing the computing paradigm, it gives us an opportunity to significantly expand the company coverage we can have. That's not to say we don't sell now to small business-we sell to a lot of Web small businesses, LAMP [Linux, Apache, MySQL, Perl/PHP] stack, etc.-but I don't think my dentist's office uses Red Hat Enterprise Linux. However, in a grid-based model, there's a good chance they would. And so it does allow us to significantly expand our base.