Linux in the Enterprise: Opinion

“We are seeing more than 100 percent growth”

From college geeks to huge enterprises—whether organisations like LIC or e-governance projects—many are moving to Linux. And according to Red Hat India, the largest reseller of software and support for the open-source code, the fraternity is growing. Red Hat India CEO Javed Tapia spoke to VENKATESH HARIHARAN about the company’s plans for India

Red Hat came in early in the Linux space in India. When was the company set up and what is its focus?

We started talking to Red Hat in 1999 when Linux was not a commercial operating system. It was very much for techies and enthusiasts rather than the enterprise. We said this is a technology that is interesting and appropriate for India. I felt that something like this needs to come to India. We made presentations about India being a Unix country and about Linux having mind share. The period from April 2001-March 2002 was our first year of operations. At that point of time, Linux was very much in its infancy. People had started looking at it but had not yet decided to adopt it. So what we did was build a programme to get Linux adoption. We called it our Three ‘A’ programme to focus on awareness, appreciation and adoption.

There was a huge degree of awareness about Linux because Indians are very proactive on technology and have Unix skills. We needed to get people to appreciate Linux from an enterprise standpoint. Only if we get appreciation, will there be adoption. So we really worked on appreciation, in terms of large projects and proof-of-concept, building lighthouse cases, skills in migration, etc. We did a number of things that required a lot of investment from a people perspective as well as a customer perspective. We held road shows, seminars, etc, across the country and all this was focused on enterprises. We were very clearly focused on the fact that we needed enterprise customers to get on the bandwagon if we wanted Linux to grow.

2002-2003 has really been the adoption phase for us and now we really see adoption taking off. Rarely do we come across enterprises today that do not have some sort of Linux strategy in place. The more proactive and aggressive ones have an entire strategy on Linux. The less aggressive ones are starting out small but looking to grow their Linux strategy. So we find that Linux is rapidly getting acceptance at the enterprise level.

People say that it is difficult to get Linux developers and that Microsoft developers are much cheaper. Microsoft does an excellent job of taking care of developers. So what do you have in terms of a developer strategy for Linux?

We have worked this out in a multi-pronged manner. You cannot address only the developer side of it without addressing the opportunity side. More often than not, if you just target the developers and there are no opportunities, they will not be interested in your technology. We have to address both sides—the push side and the pull side. With companies like Oracle very strongly coming out and saying that Linux is the platform where they see the greatest adoption happening, a lot of Oracle ISVs are looking at Linux as the OS platform. Then we have a whole gamut of our own ISVs who are using open-source tools like PHP and MySQL. Then we have an ISV programme where we encourage ISVs to port their Windows applications to Linux. So we are working on the push side.

On the pull side, we are going out and making sure that enterprises ask for Linux-based applications. If they do that, ISVs are guaranteed that they have a market on Linux. What is the point of going to an ISV and asking for a Linux port when there is no customer asking for it?.

I was talking to the CTO of a bank recently and he said that even if he wants to move his desktops to Linux he couldn’t, because the bank has about 40 applications and most of them run on Windows.

That’s not something that we can change overnight. We have to handle that in a strategic manner; so, we are addressing the ISVs. We see a lot of momentum in the banking and financial services sector. We have ISVs like Zenith and Infrasoft who have already ported their branch automation software to Linux. Central Bank is on 600 branches already. We are not going to be able to address the gamut of applications that are out there and get them converted in one go. We must convert gradually and successfully. If an ISV ports an application to Linux, it must be a great port and must work as well as it works on any other platform and the customer must get that degree of satisfaction.

You have pointed out very rightly that there is a gap between applications available on Linux and those available on Windows, but let’s not forget that Linux adoption has happened in the last one to one-and-half years. We are talking about trying to minimise what is a 10-15 year lead and we are not going to do that in one to one-and-half years. What we are seeing is that most ISVs want a port to Linux because they believe that’s the future.

More important than that is probably getting customers to push for open standards. There are reports that even some browser-based applications do not work on Linux.

Browser-based applications are not so much of an issue as Visual Basic- or ASP- or .NET-based applications. We have found workarounds to deal with browser-based applications.

The point is that it is very easy for us to go out and sell a Linux port but companies say we are not seeing any customers ask for Linux, so why should we do a Linux port. That’s why we are working on both ends. We have to work with institutions and enterprises and say, Why don’t you look at Linux for your core banking applications?

For the developers, we have a different approach. We make sure that developers have the skills and the employment opportunities for those skills. It is very easy for us to go out there and hard-sell Linux, but at the end of the day, if there are no opportunities, it is meaningless. We will probably get disillusioned faster than get people to join the bandwagon. So we have scaled our business in line with the opportunities. We haven’t taken an overnight strategy of signing 500 partners, signing every Tom, Dick and Harry up, just do Linux training and forget about what happens after that.

We have been very focused and have lined up training partners with Linux skills. We made sure that at the end of the day, the people that they train are of a certain calibre and a certain quality. To give an example, our training partners are not the national chains because we found that they were not effective at Linux training.

Why was that?

All these days they have been so Microsoft-oriented. If you have a parallel set-up, half the time it is not possible. They have the same machines running Microsoft and having Linux on a partition. It was getting to be a nightmare. We had numerous complaints.

Our partners are focused Linux companies. They have a Linux business, which is a set portion of their business. There is Linux Learning Centre in Bangalore or New Horizons in Delhi. We have focused on people for whom Linux is a core-competence area, not just another area.

At recent Linux User Group meetings in Mumbai, participation has been going up and many young engineering students are learning Linux skills. What would you say are the career opportunities in Linux for a young engineer who is just starting his career?

Infosys, Wipro, TCS and others are seeing a huge demand for Linux professionals. How do we know that? We are doing training for them. What this means is that the overall market for Linux professionals is increasing.

On the domestic side, we have seen huge enterprises moving to Linux, whether these are organisations like LIC or e-governance projects and various government applications.

Both these put together mean that there is definitely demand being created for Linux pros. We are not saying, ‘Do a Linux course and get a job.’ That is not the positioning. We are saying, ‘This will enhance your career prospects. Linux is the technology platform of the future and if you know it, you will be able to address that many career opportunities.’

You have said that Red Hat India’s focus is on enterprises. What about the desktop; because the Linux desktop is slowly maturing and some enterprises are considering moving the desktop environment to Linux?

We have so far been focused on the enterprise and server side, but in India we have seen that the entire enterprise computing OS platform can be Linux. From desktops to servers, Linux can give enterprises that uniformity. We have found that in India, we need to have a desktop strategy. Red Hat has desktop bundles with IBM, HCL, PCS, Acer and others. Localisation is another important initiative from the desktop point of view. The struggle from the desktop point of view is how do you make money with an open-source/GPL license? What we find is that the desktop is part of the ecosystem and it is important for us to have the whole ecosystem under Linux for the Linux market to grow.

What is your strategy for localisation? Where do you see a market for that?

The entire e-government market, government to citizen applications, the education sector, rural areas, schools and colleges... If we want to bridge the digital divide in India it is not possible using IT [computers] in English. We have to get IT in local languages and if we are not going to do it, nobody else in the world is going to do it.

Is Red Hat India a 100 percent subsidiary?

60 percent of the company is owned by Red Hat, USA and 40 percent is owned by me. To give you an idea of how we have progressed recently, we started in January 2001 as a three-member organisation. Two-and-a-half years down the line, we are a 25-person company. Red Hat’s strategy is to scale the business as we scale our revenues and our opportunities.

It is very easy for Red Hat as a well-funded company to come in and invest a whole lot of money and say ‘we have 200 people and are going to touch 500.’ That was the dot-com era way of doing things. The biggest confidence we can give our people is that we are a successful company. Enterprises are not looking at Linux because it is free or cheap. They are doing so because Linux is a great technology platform. The confidence we have to give them is that we as a company are here to support them, not just today or tomorrow but 5-10 years down the line.

We are now seeing exponential growth, year-on-year, more than 100 percent growth. Today, organisations like LIC are shifting to Linux because of the presence we have made felt out here. They have gone with HP and IBM hardware but that hardware has been certified by Red Hat so they know it works with Linux.

We are very clear that 25 percent of the server business and 10 percent of desktops need to be on Linux and we are very close to achieving that objective.

Can you elaborate?

We talk of the market being 2 million desktops. 20 percent of that makes 200,000 desktops. There are innumerable projects that have come up in the recent past and there are 20,000-25,000 desktops that I know of. For example, LIC is 10,000 desktops, the MP schools project is 6,000 desktops in the first phase, Central Excise is 500-700 desktops and Netcore has done innumerable Linux desktop implementations. I am not talking just about Red Hat but of Linux as a platform. The difficult part is to track where adoption is happening because we have this beautiful world of General Public License (GPL).

What is the break-up of Red Hat India’s revenues?

Our focus is not on selling boxes. We have the enterprise range of products with one-year support, upgrades, etc, and access to the Red Hat Enterprise Network. Then we have Global Professional Services, which does implementation, migration, engineering, etc, and then we have our training activities. The break-up is 40:30:30 between products, services and training.

Linux in the Enterprise: Opinion

“Our competitor is not proprietary software, it is non-consumption”

As you sit in Rajesh Jain’s office in Mumbai, the view is dominated by smokestacks. The mills that these smokestacks belong to are being dismantled and replaced rapidly by new age companies like Rajesh Jain’s Netcore. Too expensive to demolish, the smokestacks themselves remain as witnesses of a nation’s slow transformation from the industrial era to the digital era. From his perch within the Netcore office, Jain dreams of another transformation where IT reaches “every desktop and every household within India.” Jain is a visionary who set up India’s first portal, Indiaworld, at a time when the Internet was unknown and commercial ISPs were a distant mirage. After the spectacular sale of Indiaworld to Satyam that set off the Internet mania in India, Jain shunned the limelight to focus on Netcore, a company that builds ‘thin-client, thick server’ computing solutions targeted at SMEs, education and community information centres in rural areas. A prolific and thought-provoking writer, Jain has been arguing consistently through his blog on Emergic.org that we must bring down the cost of computing and devise innovative methods to take IT to the Indian masses. Venkatesh Hariharan interviews him to find out why Jain argues so passionately for the adoption of Linux in India

Indiaworld was one of the earliest users of Linux. Why Linux?

We started using Linux in 1994. We were hosted on Linux and all our development was done on Linux. At that time I wasn’t much aware of Linux but our technical team decided to use Linux and I went along with what they said.

Then you started Netcore.

Netcore was started in 1998 to look at messaging solutions. We started it to create websites for corporates and received feedback that they need something to manage their mail. So we created a Linux-based messaging server and that’s what we continue to do today among other things.

What are the other activities of Netcore?

Right now, most of our revenues come from our messaging server. What we have recently done is create a Linux based ‘thin client, thick server’ model. We will be launching this more aggressively. We have been using this internally for more than a year now. The idea is to bring down the total cost of computing and improve administration and manageability of the infrastructure. We plan to push this aggressively at small and medium enterprises (SMEs). We can offer SMEs a Linux server with all the applications that they need, right from messaging, desktop computing, accounting, CRM, knowledge management, file server, print server, etc.

Would all these be open-source software?

Most of these are built on open-source applications, a few we have built on our own. The ones we have built on our own are things like the digital dashboard and RSS/Infoaggregator and Event Horizon, which can create RSS streams from ODBC-compliant databases. Our focus has been on integrating all these into a seamless package. For example, we have created a single log-in which would work across multiple packages. The idea is to give the organisation one server that is remotely managed. The applications are on the server and the clients are low-cost, low-configuration clients.

How many users does a server support?

It scales anywhere from five users to 300 users. Today, we can leverage Moore’s Law on the server. There is no limit to how many users can be supported. We can also use multiple servers by clustering.

Most of Netcore’s work has been Linux-based. Any specific reason for that?

When I look at the numbers in India in terms of the hardware offtake and piracy levels, what it boils down to is the following: The choice that organisations face is between non-consumption and piracy. On one side there are expensive solutions available and you will not use those solutions. In some cases, whenever you can pirate, you will pirate and we have high levels of piracy in India.

Our belief is that if you can make things available at an affordable price, there will be a dramatic growth in the usage of computing. It will create a domestic market which we sorely lack. While we have a successful exports business in software, we definitely need to have a domestic market. If Indian industry is to be competitive, we need to be big users of technology. We need to make complete solutions available at an affordable price and with no compromise on the applications front.

Just because we cannot afford things, we don’t want to tell people to compromise on applications and performance. This is where Linux provides a very strong platform—especially Linux which is running on the server so that your desktops can be of much lower cost. Instead of three new desktops, you can now give computers to 10 more people in your company for the same investment.

The penetration of technology in Indian companies is so low—5-10 percent is what we are at. The installed base is just seven to eight million. Basic applications like messaging, etc, will not be effective if only a small number of people use it.

The idea is—what does it take to get a computer on every desktop and accessible to every family in the country? This is where a combination of three things is key. This is what I call the 5K PC ecosystem. This consists of the thin-client, server-centric computing and open source software.

What this does is bring down the input costs for computing. You can’t sell at a low cost if input costs are high. At the same time, we do not want a nation of pirates. People can pirate a few applications but most applications they cannot pirate. Therefore they cannot use them and are doing things inefficiently. So they are caught in a technology trap.

Indians have made few contributions to the open-source code base. Why is that so?

One reason is that open source is not a significant usage platform in engineering colleges today. We still have a small group of people developing on Linux. These are small shops that don’t have the wherewithal to be part of the production system. The two large entities that can be producers are the engineering colleges and the large software companies. They have, at any point in time, 10-20 percent of people on the bench, who instead of being idle can be put on short three-month projects. People then get trained on something that is state-of-the-art and that people actually use and something that goes back to the community. Multiply 10 percent of the Indian software industry that we can leverage for open-source projects and the number of projects is huge. We can, for example, contribute to Wine, LTSP and any number of projects.

We need a few people who will be there for an extended period of time—the project managers, and then we can have people who do the coding and are there for a shorter period of time, say two to three months. As long as there is continuity maintained by project managers we can definitely take care of production.

Today, we are caught in a low-equilibrium solution. There is an equilibrium but it is in a bad state. Today we have students in engineering colleges who are using ‘free’ software, but they are using pirated ‘free’ software, like Windows. They are not using Linux. Part of the problem is also that the education system hardcodes Windows into the system. The education system is something that needs rectification. It should be made platform neutral, OS neutral.

As a nation, we should stand up against piracy. If I am a company which is making manufactured goods, I don’t want anyone making rip-offs of my products. An anti-piracy stance enables private companies to come up and fill the need with low-cost products. Today, companies do not develop products because they know their products will be pirated. The domestic market is small and out of that, they will get no more than 5-10 percent of the customers, so why bother?

If they know that there is a significant user base and make affordable solutions, the market grows. People start paying for products. Automatically you have entrepreneurs coming in. The rest of the ecosystem will start building up in engineering colleges.

What needs to be done?

There are three key markets which can play the facilitation role. SMEs, engineering colleges and rural areas where there is an increasing use of ICTs happening.

For SMEs we need core applications which go beyond just office applications like word processing. Accounting, CRM, sales force automation, etc, a lot of these applications are available on Linux and we are trying to put them together so that there is a full-fledged suite for businesses. Once these people start adopting Linux, engineering colleges need to provide the supply of people who can build on these applications. They can take up projects for different verticals. Colleges in Pune can, for example, build applications for auto companies. Today, we have the building blocks. You have an application server, Jboss; you have a database in Postgres, Web services, business process standards like EBXML, RosettaNet, etc, which could be used. Today, for the first time, you have software standards, you have business process standards and Web services, which can standardise business processes between companies.

Companies need to take the first step and say, we will not buy pirated software. If we can bring down the total cost of ownership over a 36-month period to something like Rs 600 a month, that’s something like Rs 21,000 over three years for hardware, software, support and training. That means anyone earning Rs 6,000 can be made 10 percent more productive and the cost of the system is paid back almost immediately.

But thin-client systems have been spoken about for more than six years now?

Part of the reason has been that the focus so far has been not as much on cost reduction as on reducing the administration cost. What we are saying is that by itself, thin client will not reduce cost. Citrix-based solutions will not reduce cost because if they continue to use Windows, the savings that happen on hardware are taken up by the Citrix license fee costs and you still need the Microsoft licenses for Windows and Office. What is required is for hardware costs and software costs to come down simultaneously. Along with that, we need the remote manageability of servers and desktops. And, who will push these things? Will it be the channels or the resellers? And it will not be easy to get them trained on Linux. So if you can simplify an enterprise’s architecture by running all the applications on the server, and the server can be very easily managed remotely, SMEs can easily adopt these solutions.

Lastly, where do you see Linux playing a role in the future of India?

We need to get up to 10 million PCs a year. The PC is a disruptive innovation and we are not using enough of it. At 10 million PCs a year, we may end up paying $300-400 million a year to Microsoft and that’s not practical. We have to look at those who are not consumers today. The next 50 million users will come from there and very little legacy exists there. Our competition is not proprietary software, it is non-consumption. We need to take what Bill Gates said in the American context—“A computer on every desk and in every pocket”—and translate that into an Indian context—“A computer on every desk and accessible to every Indian family.” We cannot afford dollar-denominated technology, so we should leverage Moore’s law on the server and leverage our strengths in the software industry through open source.