Channel Marker

Mar 14 2007   4:53PM GMT

Why Red Hat Needs the Channel (more than the Channel needs Red Hat)

Brein Matturro Profile: Brein Matturro

Red Hat’s recent renewed ardor for the channel should hardly come as a surprise. But its sincerity is, at best, forced. Here’s why:

  1. Red Hat needs help getting into smaller enterprises. While partnership with OEMs like IBM and HP helps get Red Hat in the door, it needs partnerships with VARs and systems integrators to help generate services revenue — especially for the applications that it acquired with JBOSS. IBM has its own open-source play in the apps space with WebSphere and DB2, so that relationship can’t be effectively extended to JBOSS’ Hibernate and other application components.
  2. Whatever opportunity there is to displace Windows in the SMB market on the desktop and server (thanks to the bloat of Vista and the continued wait for Longhorn Server), Red Hat won’t be able to exploit it without channel partners. Small and midmarket companies looking to extend the life of existing hardware aren’t in the sweet spot for Red Hat’s current route to market; only partners who have existing relationships with those companies can get them in the door with any consistency.
  3. Oracle’s entry into the Linux space with its own “distro”, and increased pressure from Novell’s SuSE (and Ubuntu on the desktop) through many of the same channels Red Hat currently exploits could take a chunk out of Red Hat’s growth curve.

So, Red Hat needs the channel now more than ever. But does the channel need Red Hat? Red Hat’s recently-announced Certified Service Provider program provides a valuable stamp of approval, but so far Red Hat has only invited six partners into it. And the remainder of Red Hat’s partner program doesn’t do much to distinguish the company competitively.

So, who needs who more?

–Sean Gallagher

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