How Red Hat Could be a Cloud Contender

Red Hat reported its numbers, which were good, and its stock took a nice pop in after-hours trading.  Red Hat also announced something that it’s been needing to announce for some time, a cloud strategy that goes beyond simply saying they can support some open-source cloud stack.  They’re a poster-child for the companies in both the network and IT spaces today; you need a cloud strategy or you risk irrelevance.  And it has to be a decent one.

The good news for Red Hat is that theirs might BE decent.  The company has purchased ManageIQ, which is essentially what I call a “DevOps” play, a tool provider who links applications to provisioning rules that can deploy, expand, and contract its resources in the cloud.  The specific target for Red Hat is the hybrid cloud, and that makes sense for two reasons.

First, there’s zero chance that everything in IT is going to the cloud.  The rate of migration of existing applications, according to my model, will never reach even 25%.  That means that the role of the cloud has to be something far different from the role of consolidating servers or chasing nickels in cost-based substitution of IaaS for virtualization.  As we develop new value propositions for the cloud, these new applications will have to interwork with the IT assets the cloud will—CAN—never displace.  Thus, hybrids.

The second reason this makes sense for Red Hat is that they’re primarily an enterprise play.  Cloud providers tend to deal directly with the cloud stack software players, or they’re themselves founding members of standards groups and open-source projects.  Giants like VMware have gotten an edge in the hybrid world by having a play on both sides of the cloud business fence.  Red Hat can only cover one side, so it needs an angle.

The VMware reference here is also relevant, because arguably Red Hat is a competitor with VMware.  It’s not that VMware offers exactly what Red Hat does, but that both of them are promoting the same buyers, and there’s really only one driver for strategic IT change.  If it’s cloud, you need to be there.  VMware’s claim to fame in the cloud space is based on two factors; virtualization incumbency and superior operations tools.  Red Hat can hardly match the first factor, so they have to go after the second.

The big question for Red Hat isn’t so much whether ManageIQ is a credible strategy to address the hybrid cloud (it is) as whether it’s a long-term value proposition.  Hybrid clouds are the way of the future, and so the question is what the architecture of the future would look like.  It’s not going to look like server consolidation and IaaS.  It’s probably going to look a lot more like SOA, and in fact in this department RED HAT HAS A LEAD over players like VMware.

SOA componentization of applications facilitates elastic deployment and it also facilitates composition-based worker empowerment.  Remember that my vision of the future is POINT-OF-ACTIVITY EMPOWERMENT through a combination of mobile broadband and the cloud.  I can build this sort of thing based on SOA, as long as I modernize the SOA processes to the new mission.  So that’s what Red Hat should be thinking about.  How can they make ManageIQ into not only evolutionary DevOps but revolutionary “SOAOps?”  If they get that right they can suddenly become a true power in the cloud, and their competitor VMware becomes a sauropod munching leaves and waiting for extinction.  Will Red Hat see the light?  That’s another of those “we’ll see” questions.

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