New Red Hat CEO Thrives on Channel Partner Relationships

In his 19 years at Red Hat, Paul Cormier is always focused on channel partner relationships. And now, as CEO since April 6, Cormier stresses that the channel continues to fuel Red Hat’s steady growth.

Cormier arrived as the company’s VP of engineering 19 years ago, and later became president of products and technologies. He has watched the company transform from a startup into a goliath in the world of open source software. And in many steps of that path, Cormier has had a leadership role in making things happen. The company has grown dramatically from its start as a Linux vendor to offering a wide range of enterprise applications. Today that includes platforms for cloud, Kubernetes, storage, middleware, virtualization and more. The company’s $34 billion acquisition by IBM in July 2019 has been a huge boost as well.

Red Hat’s Paul Cormier

In a Q&A with Channel Futures, Cormier speaks about his new roles as CEO and president and about what he sees in the future for Red Hat, its partners and customers. Cormier succeeds Jim Whitehurst as Red Hat’s CEO. Whitehurst left Red Hat in April to become the CEO at IBM. Cormier was employee No. 120 at Red Hat when he arrived 19 years ago.

Channel Futures: You’ve been working for the company since the days of the early LinuxWorld conferences back in 2001. What’s this journey been like for you? Did you expect to be CEO one day?

Paul Cormier: When Jim Whitehurst came in 12 years ago as CEO of Red Hat, we talked about it. Jim was coming from Delta Airlines, an airline guy. Jim and I forged a really good partnership. He brought things to the table that he was better at and I brought things to the table that I was better at. And look where it got us. But this time, for this change, IBM has been incredible in terms of understanding why we need to be independent and how to be independent. Especially Arvind Krishna, IBM’s new CEO. Arvind was really the architect of the deal. And he and I worked on it really early. So, at this point in time to make the change, to make sure that it really gets solidified inside IBM, it had to be a Red Hatter to [succeed Whitehurst as CEO].

CF: Red Hat has been a huge partner with the channel for a long time. What is your approach to channel partner relationships?

PC: The channel is what made Red Hat. The key to the success of the company was Red Hat Enterprise Linux (RHEL). When I first started, we had a retail Linux product we sold in bookstores. Bob Young started the company by selling Linux CDs out of his trunk and his flea market. I’m not kidding. And when I came in, the banks on Wall Street were starting to use Red Hat Linux. I went and talked to them, and some of the feedback I got was that it’s great, but there are no ISVs and no partners who know how to do service or who can help configure, install and architect it. They said they didn’t know where it was going, that there was no life cycle. We later solved all those problems when we introduced RHEL.

CF: What helped move things forward?

PC: One of the biggest problems was building an ecosystem around it. And that ecosystem is what made us successful. The first channels were the OEM partners: Dell, HP, IBM. All the OEM partners were really the first channel partners. Then we started to get smaller channel partners that could actually build …

… services around our product. So we wouldn’t be here at all without the channel. It’s been part of the strategy from day one.

CF: How will this all work now that Red Hat was acquired by IBM last year?

IBM understands now that’s going to continue. IBM does not want to upset our strategy in the least. They do not want us to change the strategy and what we’re doing. In fact, it’s up to us to drive, but they do want us to keep on the trajectory that we’re on, which is why there is such a focus from both sides on maintaining separate [identities].

CF: So, as CEO, does this mean you will further deepen your channel partner relationships as well?

PC: For me personally, I’ve always done that since I began running the products and technology organization at Red Hat. I had the business units, which were responsible for all the business. That included product marketing and management, setting pricing and working with the field on getting it out through the channel. And then all the engineering pieces that go with it. It was actually everything from the business side of products all the way through engineering, the CTO’s office and support. So I’ve always had a history of working with the partners and the channels. I’m still very involved. But if you look at where Jim and I were — Jim probably talked to more customers than I did and I probably talked to more channel partners than he did. I did get out with a lot of customers, but I’m with the partners all the time.

CF: What are your thoughts on where business use of open source software will go in the future? Back in 2001, startups like Red Hat were still trying to explain how they could help solve business IT problems. At those early LinuxWorld conferences, companies were still wondering what Linux was and how it could one day help them. Then, by about 2004, Linux became a known commodity and the LinuxWorld events were no longer needed or held. What happened?

PC: It’s really funny, but the Red Hat Summit kind of took over for LinuxWorld. I say this all the time. Our original value proposition was about commodity. We did our marketing on RHEL at the beginning to show that we were functionally providing about 75-80% of the features, functions and benefits of UNIX for a fraction of the cost. That was our value proposition. But what happened over the last 19 years is we’ve blown through the performance of UNIX. We have the best Microsoft SQL performance of any operating system, including Windows. SQL performs better on RHEL than on Windows. Linux became so powerful and available and gained more innovations over the years. It all started to get built around Linux until you see where we’re at today, with the infrastructure, the developer environments, the tools. That’s why we’re in the incredible position that we’re in.

CF: How does Red Hat continue with that mission?

Now the value proposition is that it’s an innovation play. If you want to get the innovation, it’s coming out of the open source community in and around …

… Linux. And so we’ve really moved from that commodity play to an innovation play. The whole market has moved that way, too. It has been quite a trip.

CF: What’s the next big thing for Red Hat and its partners and customers?

PC: I’ve said in one of my talks that for about 30% of our customers, their cloud strategy is hybrid. That’s growing every day. It’s in and around hybrid, we’re really in the beginning of hybrid. When cloud first started, the cloud guys were telling everyone that every application was going to move to their cloud tomorrow. We knew that was impractical, and even they all know that’s impractical now. So what you’re seeing is customers stitching things in public cloud as part of their IT environment and not as their entire infrastructure.

CF: Is all of this surprising to you?

PC: I say all the time — hybrid is the new data center. It’s absolutely true. It’s all kinds of new services around that, from storage services to messaging services. Middleware and all of these new services are built around that. Stitching all these different platforms together that are running in some data centers and others in clouds, etc., it brings a lot of power, but it’s really complicated.

One of the fastest growing things around this is automation. Because you can have a really powerful solution, but you’re going to need very good management and very good automation. Those are two big areas around the hybrid space, but it’s going to be all around this hybrid platform. We’re in a 10-year cycle here. Even where we’ve gotten to today, with 17 years of RHEL, that’s not gone; that’s the foundation of what we’re doing. It’s not like we were in RHEL and now we’re not in RHEL. It’s still driving all that.”