Red Hat Prepping Managed Services Strategy

The convergence of open source with managed services and software as a service (SaaS) continues. The latest example: Red Hat, arguably the world’s best-known open source company, has created two staff positions to serve hosting partners. Plus, Red Hat is evaluating a strategy to work more closely with managed service providers, MSPmentor has learned. Here’s the scoop.

In recent months, Red Hat has received a growing number of inquiries from hosting and managed services partners, according to Mark Enzweiler, vice president of channel sales at Red Hat. Attune to the trend, Enzweiler created a new management position at Red Hat last year, in order to better serve hosting partners.

Now, a second position focused on hosting partners is in the works, and Red Hat is also taking a close look at the managed services landscape. The company expects to speak more extensively — and will introduce some managed services partners — during the Red Hat Summit, scheduled for June 18-20 in Boston, according to Enzweiler.

Partner Momentum

Red Hat’s commitment to MSPs and solutions providers should not be underestimated. During the company’s fiscal 2007, Red Hat doubled its business through traditional channels like VARs and integrators, according to Enzweiler. Moreover, Red Hat now has roughly 50 Advanced Business Partners, up from about 21 in March 2007, he adds.

Still, there’s more room for improvement. Roughly 54 percent of Red Hat’s revenue now comes from partners. However, true channel-centric companies such as Cisco Systems generate more than 90 percent of revenue from partners. Red Hat recently reorganized internally in order to apply more resources to partner-driven sales, Enzweiler notes.

Working more closely with MSPs could be a potential win-win for Red Hat and its partners. Although Windows Server remains very popular as a default platform for managed services and hosted applications, there’s no denying Linux’s momentum in those areas as well.

Most hosting providers now provide a mix of Linux- and Windows-based network operation centers (NOCs). Plus, virtualization technologies have allowed customers to more easily mix and match Windows and Linux in server environments.

Meanwhile, open source-based applications — such as SugarCRM — are equally popular on Windows and Linux, and they are increasingly deployed in a SaaS model, SugarCRM CEO Jonathan Roberts has noted to MSPmentor.

Also, a growing number of technology companies — such as Calyptix Security and Untangle — leverage open source in their managed services solutions.

Watch for Red Hat to work much more closely with MSPs, with sample engagements potentially to be announced at the June summit in Boston.