As a pioneer in the open-source space, Red Hat is looking at different solution practices and partners associated with those solution practices. In an interaction with CRN India, Neeraj Bhatia, Director – Commercial & Partner Sales, Red Hat, shares more details
Amidst digital transformation, how are you capitalising on opportunities which have come up with this changing market?
A recent industry report stated that almost half of the Fortune 500 companies that existed in the year 2000 have now shut down. There is a huge transformation of business happening at every level; not just related to IT. Earlier IT was getting transformed, but the new digital wave and automation is creating challenges for the businesses today. The core part of transformation is innovation and we believe innovation is being driven by open source. Cloud and containers came out of open source, whose base is Linux, which is where Red Hat started. We have mastered the technology and are providing our customers a seamless experience with the Red Hat Enterprise Linux, both on premise, in-cloud and also in a hybrid environment, whether that is between cloud service providers or on your own data centre with a virtualised infrastructure.
A single operating system operates across and that provides our customers the possibilities and the opportunities to move their workloads across these three different paradigms and be able to choose one against the other. With the latest advancements in Red Hat Enterprise Linux, a workload which is only running on data centre on RHEL can easily be moved with other tools that we have. This, in our view, is digital transformation. The base of all of this is the operating system at Red Hat Enterprise Linux, coupled with OpenShift platform, which is a Platform as a Service (PaaS) technology.
The operating system of the data centre, with the latest advancements in the operating systems of the cloud and also OpenStack, is enabling customer and service providers to give the best experiences and technology in an Infrastructure as a Service (IaaS) model to the users, which include new-age technology companies, telcos, governments, banks, manufacturing companies, etc. By offering the Red Hat Enterprise Linux with OpenShift, OpenStack, we are at the centre of the digital transformation.
With customers adopting cloud technologies, how has been Red Hat’s growth in the Indian market?
In India, the biggest advantage is the government’s decision to embrace open source. India is a nation of developers, who are working on proprietary technologies and and driving innovation. From that perspective, there is a positive sentiment around cloud and digital transformation in India. Red Hat is well poised to take advantage of this environment. We have a partner-led model. While we have business units that engage with the customers directly like telcos, banks and governments, a large part of our engagement is driven through our partners. Partners are enabled and invited to build their services capabilities around the technology and deliver a complete outcome to customers as opposed to simply selling a piece of software.
That is our model which gives us an added advantage to every IT company, from hardware technology providers, software providers, services companies, re-sellers to cloud providers; they are all our partners. This is how Red Hat is riding the digital transformation wave and the cloud wave in India. On cloud itself, we are witnessing healthy growth with all the service providers. We partnered with AWS, Google Cloud, Alibaba, IBM Software.
What’s your observation of hybrid cloud adoption?
Hybrid cloud allows customers to use the best available technology and uses the elasticity of what the hosted environment can provide. When a customer decides to move a specific application to cloud or part of it, they look at cost, total usability and public interface. If there are individuals and other businesses who interacting with their business using an app or interface, they also take into consideration how secure the environment is or how easily it is available to them. This has positively driven customers to move to the hybrid environment.
We have ensured security in the Red Hat Enterprise Linux which is the operating system that’s powering data centre and the cloud now. As customers gain more trust on cloud, they are moving their applications on to a hosted environment. Further, technologies like OpenStack allow customers to build their own in-house cloud offerings. As all of these areas continue to grow, we will have customer applications move across data centres and private clouds that need a lot of tools for automation and management, to identify and allocate resources to manage workloads. That’s the big value that Red Hat brings. We have the entire management tool for hybrid cloud environment and the automation tool to make customers’ applications more automated and more manageable. That’s how we participate in the hybrid cloud environment; we call it ‘open hybrid cloud’.
We have good references in all kinds of industries, a recent one being Tata Communications who have now set up a joint offering with us. They are offering multiple services built around Red Hat technology to customers, both businesses and individuals, who host their applications or their data centres with Tata Communications. Container as a Service, the opportunity to have a hybrid cloud environment – all of these things are now in play at Tata Communications facilities, especially the data centres in India.
How critical has been the role of your partner ecosystem in driving success? Please elaborate on your efforts on channel programs and partner enablement initiatives
We have a partner program called ‘Partner Connect’ which has its own partner tiers that allow partners to sign up with Red Hat, get trained and develop joint business plans. The essence of partnership at Red Hat enables partners to offer their services around our technology. Our partners have not just brought our technology to the customer, but they have also built on top of it and delivered the outcomes that customers seek.
We have embarked upon a journey with two advanced partnership programs. One is the OpenShift Partner Builder Program which addresses the whole momentum around markets. We started on this journey around three or four quarters ago, when we identified partners, put together a business plan, carried out an assessment of which partners fit into the OpenShift Partner Builder Program and launched the same. We have about half a dozen partners participating in the program, who are building their own services and offerings for customers. The program takes care of the training at sales, resales and delivery stages. It enables partners to put together business plans in specific industries that both the organisations now work on. The goals that are set for that program are a combination of the partner services bookings and the Red Hat components. We have made sure that our goals are aligned with our partners’, thereby increasing their profitability, their skill in the game and their value to their customers.
Another program is around automation, which is built on Ansible. We are in the incubation stage of this program. We are identifying areas where we can focus on these partners, so that there are enough and not too many partners trying to trip over each other and decrease the services opportunities that exist. We transact with over 900 partners in the country, out of which, core partners for Red Hat who are engaging with us for multiple solutions, are about 25. These are the core and big partners who drive multi-million dollar business for us and themselves. These are all India based partners, excluding the OEMs and cloud service partners, because they are global partnerships. We have 35-40 partners who are doing the multi-million dollar business with us annually across the globe and in India. The initial 24-25 are Indian companies. They are SIs who are either large server partners or software partners and over time have started to work with us to create joint offerings.
Please elaborate on the partner accreditation structure followed at Red Hat
The partner connect program has three tiers. The basic tier is called the ‘Ready Business Partner’ and is a first level tier where one may go to the website, self-certify and sign up on the basis of the basic check on the back-end. The next tier is called ‘Advanced Business Partner’ which provides an increasing set of benefits for building Red Hat business plans, focusing on growing both renewals and identifying and closing new opportunities. Advanced partners enjoy enhanced benefits and access to additional resources designed to help them build enterprise open source practices and increase revenue. The final tier is known as ‘Premier Business Partner’ which is more global in nature. We work with these partners in two or three different regions and require a much bigger force of people who are certified with Red Hat in various technologies and solutions. They receive the highest level of visibility at Red Hat. A partner in India will get the similar engagement and program from us and even if he signs up in any other country.
Do you follow best practices of other SAARC markets in India and vice-versa?
The philosophy is the same; we lead with the values and the ability of the partner to deliver, understand technology and talk our language to the customers. We are seeing that in the SAARC region, while other countries are smaller, they have partners focused on customer segments and the horizontal segments they want to deliver to. We had a positive experience in those countries, but for us, SAARC countries are partner-led only, so we don’t have direct sales force in those countries. We recently appointed Ingram as our distributor for the SAARC countries and Ingram has dedicated resources for Red Hat for market engagements. We also have India-based resources in the team who manage the SAARC region. We are receiving a positive response for open source and various technologies in Sri Lanka, Bangladesh and Nepal. Governments there look up to how the Indian government has taken up digital transformation and how we are partnering with them.
Amidst emergence of born-in-cloud companies, do you see the traditional partners evolving as well?
Our focus is equal for on-premise, hybrid and cloud, along with the application area as that is a critical part of what we do. The traditional partners still continue to have a large footprint in the market. The born-in-the-cloud partners are acting more as influencers and consulting organisations. As they work in the area of applications, there is no infrastructure to sell; they are enabling customers to move to cloud or build their application on the cloud. Our interaction with born-in-the-cloud partners is to an extent wherein they talk to their customers and enable the customer’s transformation onto the cloud. As they start modifying their applications, we engage with them. It’s an evolving partnership module and as a lot of them are new and small. It’s an interesting area and I think it will have a positive impact in the next 12 to 24 months and we are investing with them. A large part of our focus with them include Azure and AWS, because they predominantly lead that ecosystem.
We have partners who have taken businesses out of large SIs. We have partners who have taken large outsourcing deals away from traditional SIs in India and are delivering to customers. These customers are not small – these are business houses, insurance and banking service providers.
The traditional model has moved ahead. There was a time when people were selling products, then it became solutions and today it is about an experience. It is no more about a product or a solution. Every business model has to evolve to engage and be able to make money in that. Traditional SIs are putting in a lot of efforts, investment, thoughts and are changing their business models. Many of them have faded away, regrouped and reformed, and I think that transformation will continue.
It is not being driven by Red Hat, but by the customers. It is this environment that is changing which is driving the whole transformation. We work with a lot of organisations to help them create their own digital transformation story and address their customers’ challenges.
The partner ecosystem is still in the evaluation stage in terms of emerging technologies like AI, IoT and ML. Being a global giant, how you are you building the confidence, capabilities and competencies among partners?
We don’t address AI or IoT as application areas. The underlying operating system in all of these areas is the Red Hat Enterprise Linux. All of these initiatives are born out of the open source movement, where we invest and put in a lot of R&D efforts. From that perspective, we don’t directly play in the market, but we are working with partners for defining their strategies around these technologies and IoT is a big part of it. We think that businesses will have to evolve to create those devices that are intelligent and an integral part of the whole IoT wave. On the automation side, we have fair bit of technology with us. Most of the SIs are on their way in building their practices around automation, which will then lead to AI and bots and other innovations.
Do you think the services model is the way ahead for the partners?
We created the subscription model almost 19 years ago, but what we bring to the customer today is a service subscription model. The subscription model is here to stay; the new trend is that everybody needs to move to a subscription model. Subscription is the only way you can hold your customers for long.
Do you have a Centre of Excellence, where not only the partners, but also the customers can experience the innovation being done by Red Hat?
This is an area which we are transforming. We have innovation labs in Singapore and the US, where we take customers to the lab. We get experts from across the world to pitch, depending on the requirements. We also invite the customer’s resources to participate. Together, a team is formed where we have resources from Red Hat and customers who meet at a location. It is a 4-8 week residential program where we pick up a process or particular aspect that the customer desires to focus on. We ideate, look at different technologies, create prototypes and test them. We involve and enable the customer’s resources to present the prototype to their organisation, further to which, we either continue on that journey or make changes accordingly. This is a unique experience we offer to our customers where they identify business needs and we help address them.
Are some of your key partners a part of this?
Each case is different and depends on what the ecosystem requires. Sometimes, customers want to leave aside proprietary technologies and long term commitments. They want to have an open discussion on how they can transform their applications, IT infrastructure and the organisation. While we talk of transformation so easily, some businesses around us are closing down and they will eventually have to shut down, if they don’t transform and keep pace with what is happening in the industry.
What are your expectations from partners; and how crucial is their success for Red Hat?
Our partners’ success is critical for us. We are releasing programs where we are measuring ourselves on their success. We are not omnipresent and are not a services-organisation, as a result of which, we don’t compete with our partners. It’s important that our partners succeed and every part of Red Hat is charted to identify those partnerships – whether is it for specific solution areas or specific verticals – and build a program to create GTM strategies with them. We are also looking at different solution practices and partners associated with solution practices, and are investing in them. We run many training programs at no cost to partners, except the cost of participation, where they send resources into our facility to be trained. We understand that partners may not be able to travel, so we get trainers to India and we run 8-10-day programs every quarter around these advanced technologies.