This week, I attended the Jefferies 2013 Global Technology, Media & Telecom Conference and sat in on Red Hat's investor presentation.
On Wednesday morning, Red Hat CIO Lee Congdon fielded questions on the current and future states of IT. As may be expected, he sees cloud services playing an increasingly vital role.
In his presentation, Congdon stuck pretty close to the talking point about open-source options not costing a thing. The Jefferies moderator asked about "macro-level" uncertainty that seems to be putting a damper on IT investments. Congdon cited Linux as a more attractive proposition, specifically because of this uncertainty. "Cost-conscious firms are looking at open-source. Open-source Linux, middleware, and cloud are the future."
And even though it's too early to see significant revenue, he said, Red Hat is at the leading edge of building business models in the cloud. Right now, most adopters are muddling through their implementations via trial and error, but all-in-one solutions and reference architectures will grow in popularity as their worth is proven. Even companies with plenty of legacy systems to maintain on the premises will begin shifting their IT investments to the cloud.
On an anecdotal level, Congdon said that organizations building general-purpose "green field" platforms are looking to Linux, not Microsoft, because of the minimal barrier to entry.
Many firms, for geographic or regulatory reasons, aren't flexible enough to conduct development efforts on the public cloud, so the opportunity for Red Hat is to be "the default solution of choice for private, on-premises clouds." Its combination of Linux, JBoss, KVM hypervisor, CloudForms orchestration tools, and OpenShift PaaS is the "next-generation operating model."
When asked about OpenStack, Congdon said that Red Hat works with IBM and RackSpace to support OpenStack, but it's too early to tell how Red Hat's solution stack will evolve in relation to CloudForms.
"The customers are going to help us decide. And, to a degree, the communities will help us decide."
In terms of cloud adoption, consumer-facing companies like Facebook and Amazon are leading the way for large enterprises, and startups are expected to utilize cloud resources instead of on-premises ones. Red Hat has 40 percent of its workloads running on cloud platforms now, and its goal is to raise that figure to 60-70 percent in the next two to three years. "We consider that leading edge."
Farther from the edge are firms that have significant amounts of legacy systems, but they aren't shying away from cloud services, either. "Very few say, 'Cloud doesn't make sense for us.' Many have said they'll switch 'when it's the right time,' or, 'we're experimenting.' It's an inevitable trend."
What do you think, members? Are your cloud efforts centered on open-source resources, or are you looking for commercial solutions? Share your experiences in the comments.