Red Hat CEO targets Oracle, Microsoft

RALEIGH, N.C. - Software maker Red Hat Inc. CEO Jim Whitehurst said Friday — his fourth day on the job — that he's angling for a showdown with much larger Oracle Corp. and Microsoft Corp. over leadership in open source products.

Moving beyond defending a company as he did as an executive at Delta Air Lines Inc., Whitehurst is ready to go on the offensive as he builds Raleigh-based Red Hat.

"A lot of work at an established company like Delta is about preserving market share and defending against incumbents," said Whitehurst, who helped guide the airline out of bankruptcy before leaving in August.

"Here, we are the attacker. If you listen to all the squealing that Microsoft and Oracle do about us, clearly they're worried about us."

Microsoft has put its weight behind the open-source software platform peddled by Novell Inc.

Oracle has been even more aggressive, announcing more than a year ago that it would sell maintenance service for Red Hat's product — essentially copying the company's business and offering a lower price.

Whitehurst said anything short of success in the skirmishes with Oracle and Microsoft would endanger the open-source industry and the free flow of information — though he acknowledged that competing against those two "very large and very wealthy" rivals will be difficult.

"We are working to democratize information," Whitehurst said. "A lot of people don't see the importance of that. But, ultimately, it is about information freedom and making sure information's accessible.

"If we don't fight those battles now, our entrenched competitors will lock up file formats, force you to use their software or force royalties," he added. "Then the information stored in those formats will no longer be free."

Unlike Microsoft, which keeps the code for its Windows operating system and its software secret, Red Hat collaborates with outsiders to develop its product and then gives away the software, allowing users to copy, distribute and modify it.

The company makes money by selling technical support services.

Red Hat's software core Linux brand operates the back room servers of many companies and government agencies around the world. The company estimates that the data center business overall is worth $100 billion, and it has only tapped a small portion of that.

Whitehurst also hopes to expand into software applications and onto desktop computers. But he wasn't sure that will happen immediately: "I just found the bathroom and coffee machine around here, so, we'll see."

A handful of analysts and observers questioned Whitehurst's appointment over more prominent tech-industry leaders. But the self-described "techie geek" said he is plenty qualified to handle the job.

He's a computer science graduate who runs Linux on his home computer and does programming in his spare time. And, he points out, Delta didn't exactly ignore high tech with a technology budget of about $400 million — about equal to Red Hat's annual revenues.

Whitehurst said he passed up offers from private equity groups and others to help turn around struggling companies. He enjoyed the work at Delta — a company he called "an institution that deserved to be saved" — but he wanted a new job he could get excited about.

"I am absolutely passionate about what we do and the importance of what we do (at Red Hat)," Whitehurst said. "By doing well, we do good."

Former Red Hat CEO Matthew Szulik, Red Hat's CEO since 1999, stepped down at the end of 2007 to deal with family health issues, he said. He will continue as chairman of the company's board of directors.

Red Hat shares were trading down 24 cents, or 1.2 percent, to $20.47 in midday trading Friday.

Author: Mike Baker @ news.yahoo.com

Read more ...