Red Hat gets serious about India Inc.

With its latest batch of server software, Red Hat is going after the enterprise server market in a big way. This, says Prashant L Rao, might just be the tipping point for Linux in the Indian server market

Unlike many other Linux companies, Red Hat is profitable. Its partnership with database giant Oracle gives it credibility in the enterprise computing segment—Oracle clusters on Red Hat Advanced Server are quite popular in India. Best of all, Red Hat has Blue Chip reference customers in India. These include IDBI Bank and Indian Railway Catering and Tourism Corporation, that run Oracle Financials and Oracle’s E-business Suite on Red Hat Linux Advanced Server respectively.

Servers—What Linux does best

Red Hat Enterprise Linux came out in May 2002. Until then, Red Hat’s business model was broadly similar to that of other Linux vendors. The company brought out new versions of its distribution every four to six months and Red Hat Linux was mostly used for entry-level or edge-of-network tasks such as file & print, messaging or for running a company’s Web servers. While Red Hat did have revenues coming in from box sales and support, it lacked concrete support from important ISVs and OEMs. That changed when Red Hat teamed up with Oracle for databases, BEA for application servers and Veritas for storage software. Leading server vendors—IBM, HP and Dell—certified configurations running Red Hat Enterprise Linux.

A year after its launch, enterprises have paid up for 41,500 annual subscriptions of Red Hat Enterprise Linux globally. The likes of AOL and Oracle use the company’s enterprise server products to deliver services at lower cost to their customers. AOL has started moving parts of its mail systems to Red Hat Enterprise Linux while Oracle uses clusters running RH Enterprise Linux to run its daily business.

International revenues accounted for 30 percent of the company’s revenue in FY 2003 and the company has more than 150 servers running Red Hat Enterprise Linux in India. Red Hat India has been quick off the starting block and it’s success can be seen from the fact that one of HP’s first deals on its Integrity servers (Madison-powered boxes that have just been launched) signed during the last fortnight has a Red Hat Linux component. "India Pistons has placed orders for two Itanium 2 servers, one with Red Hat Linux and the other with HP UX. Deliveries are scheduled to start in six weeks time i.e. by mid-August," says Pallab Talukdar, director-BCS & Solution Marketing, ESG at HP India.

Javed Tapia says that Red Hat India usually comes up against Microsoft Windows 2000, SCO UNIX and Mainframe RISC on the enterprise front

Re-engineering Linux for enterprise customers

"Our enterprise Linux products have a longer life cycle of 18 months and we offer a higher level of support," says Javed Tapia, director-India, Red Hat. The idea behind having longer life cycles is that it is hard for enterprises to keep upgrading their servers every six months. Typically, every server OS upgrade results in some broken applications. Red Hat’s business model for Enterprise Linux involves selling subscriptions on a per server basis. The company’s support offerings include Red Hat Network—subscribers can pick up the latest patches for their OS and they receive regular e-mail alerts regarding the same. On the hardware front, it is the Intel Xeon that’s emerged as the most popular platform for running Red Hat Enterprise Linux.

From departments to data centres

"We have a suite of enterprise Linux products," says Tapia. While Red Hat kicked off with a single enterprise Linux offering—Advanced Server—today, it has an entire range of enterprise Linux products catering to everything from the entry-level departmental server segment to the data centre. Advanced Server has metamorphosed into Red Hat Enterprise Linux AS. This product, in turn, comes in two flavours—a standard edition and a premium edition. The difference between these two is that premium edition buyers get quicker response times of one hour instead of four for telephone support. They also get access to Red Hat’s Enterprise Support Services seven days a week as against 9 am to 5 pm on weekdays for customers running standard edition. The Itanium version of RH Enterprise Linux AS costs 20 percent more and it comes in standard and premium editions.

Then there’s Red Hat Enterprise Linux ES (Enterprise Server) aimed at the Windows 2000/NT market of departmental file & print and messaging. "Small companies doing branch automation with specific applications are going in for Red Hat Enterprise Server," says Tapia.

Red Hat and Oracle, a winning combination

Databases are one of the hot applications on Red Hat Enterprise Linux. The Oracle-Red Hat Enterprise Server combination has proved to be a winner. "We are a preferred platform for Oracle 11i," says Tapia. Red Hat has a strategic relationship with the database giant, undertaking joint marketing. Database applications are driving Red Hat Enterprise Linux ES deployments. Oracle 11i ERP on Red Hat Enterprise Linux AS (Advanced Server) is a popular combo in India. Some companies are migrating from Oracle on UNIX to Oracle on Red Hat Enterprise Linux AS clusters.

Red Hat Enterprise Linux vs. other server OSes

In the server operating system market, Enterprise Linux products from Red Hat are going head-to-head with several platforms, including Windows Server and UNIX. "More often than not we come up against Microsoft Windows 2000, SCO UNIX and Mainframe RISC," says Tapia. The company’s mid-range enterprise server product and its top-of-the-line Advanced Server product are comparable to the Standard and Enterprise Editions of Windows 2003 Server respectively. Another way to look at it is that ES (Enterprise Server) is competing with Windows Server’s entry-level product (or NetWare or Intel-based UNIX) while AS (Advanced Server) goes head-to-head with RISC UNIX or Windows Server’s enterprise and data centre editions.

According to Partha Iyengar, Red Hat’s addition of a level of stability in terms of management and support will drive adoption

Red Hat rising

For a long time, Linux was lagging in India. While the Penguin has been giving Windows and UNIX a run for their money in the US, things weren’t the same in India. That’s changed, now that there’s a guarantee of support and services in India, enterprises are piloting Linux by using Red Hat Enterprise Linux for fresh deployments.

Red Hat’s strategy of creating a distinct range of enterprise server products has contributed to this trend in a big way. Today, Red Hat has versions of Linux server that compete with Windows 2003 and UNIX on Intel hardware. Red Hat is the distribution of choice when a server major has to deploy Linux along with UNIX in India. The company’s global tie-ups with HP, IBM and Dell and its seeding program of sending copies of its server OSes to OEMs have paid off. 30 percent of IBM India’s high-end Intel server deployments are on Linux, which is popular in government and public sector circles. Red Hat is the only Linux distribution to have received COE (Common Operating Environment) certification from DISA (US Defence Information Systems Agency), a big draw with governments.

Gartner’s take—Linux doing a UNIX

The first half of 2003 has seen Red Hat emerge as the Linux distribution of choice for fresh server deployments. Red Hat Enterprise Linux products are seen as a complement to RISC UNIX and an alternative to Windows Server or Intel-based UNIX. The question remains if RH Enterprise Linux, particularly AS, will emerge as a threat to commercial UNIX. In the near- to medium-term, Gartner believes that the answer is a ‘no’. "UNIX took 10 to 15 years to become a mainstream platform and database and application vendors started supporting it. At that point of time, enterprises stop looking at it as a niche solution and concerns go down," says Partha Iyengar, VP and research director, Applications Development & IT Services at Gartner India.

Gartner’s take is that Linux is following the same path taken by UNIX that started as an open source OS before products such as Solaris, AIX came along and it became proprietary. "At present it [Linux] is a pure OS. As Red Hat and other companies take that kernel and make modifications—it is becoming semi-proprietary. Now it starts looking like a regular OS, becoming more stable and usable from an enterprise perspective. Pure Linux isn’t suitable for broad-based enterprises (you have to do kernel fixes). Enterprise applications have to be integrated on Linux; it isn’t plug and play. Red Hat adds a level of stability—manage & support—this should drive adoption," adds Iyengar.

Linux is a suitable platform in the workgroup space for running single applications such as firewalls, mail or Web server, it isn’t meant for running multiple applications on the same server, says anil Valluri

Linux completes UNIX

For now, UNIX server vendors are happy to offer Linux as an option to their customers. Sun, for instance, sees Linux complementing Solaris. In Sun’s view, the x86-Linux combo is perfect for running single applications while Solaris handles the load of multiple mission-critical apps. Anil Valluri, director of Systems Engineering at Sun Microsystems India says, "Features such as dynamic reconfiguration and partitioning are not present in Linux. Linux is a suitable platform in the workgroup space for running single applications such as firewalls, mail or Web servers; it isn’t meant for running multiple applications on the same server."

Linux, in Sun’s view, is famous for its ability to run on x86 hardware, it offers freedom of choice for anybody who wants to download and use it—the cost of acquisition is lower. "We realise that not everyone needs 64-bit. 32-bit is good enough in many cases. For this market we offer x86 plus Linux. Sun’s value addition is the Sun ONE software stack," adds Valluri. Sun’s latest Linux box, the LX60, a dual CPU Xeon box, runs a modified version of Red Hat Linux.

Big Blue offers Linux on all its server platforms. As of now IBM offers SuSE Linux on the pSeries. Red Hat certification on the pSeries is slated to take place in Q3 2003. IBM uses dynamic partitioning to run several Linux ‘servers’ on a single pSeries box. So far interest for the Linux-AIX combination has been confined to certain segments. "Web, high performance computing (HPC) for oil exploration and seismic research and education are areas where we see Linux being strong," says Puneet Gupta, country manager, pSeries, IBM India. IBM’s biggest Linux deployment in India was the HPC cluster it set-up for CDAC—a Linux grid. IBM also offers a toolkit for developers to port Linux applications so that they run as native code on AIX.

Who will bell the penguin?

By end-2003 we expect that Red Hat Enterprise Linux will have been piloted by many Indian companies. It will then be waiting for the first Indian enterprise that’s ready to bet the shop by running a core application, any core application, on it. At that point the crystal ball gets foggy, as companies tend to prefer someone else to make that first move. It could take a couple of months or a few years before India Inc. lets Linux into the core of its data centres. Until then, products like Red Hat Enterprise Linux will help push Linux up the enterprise server food chain.

While Windows Server is going to feel some heat, Red Hat’s impact upon Windows Server will be limited by the fact that folks picking Windows do so out of the comfort factor of a familiar interface. Like all flavours of Linux, Red Hat Enterprise Linux has a lot in common with UNIX in terms of the command line (which is what UNIX sysadmins use) and utilities. Therefore, it is possible that Indian enterprises may follow Amazon.com’s example and move some of their servers from UNIX to Linux. That’ll take a while though, UNIX has proved itself in mission critical environments—Linux (and Windows Server) have yet to do that. The early signs are encouraging though. Deployments such as Indian Railway Catering and Tourism Corporation’s (IRCTC) roll out of Oracle E-Business Suite on Red Hat Enterprise Linux are the first rocks in what could end up as an avalanche of CIO approval.