Paul Smith joined Red Hat to replicate his success establishing — and growing — a public sector practice. In the eight years since then, he’s more than succeeded. Today, the government business unit he oversees at Red Hat is the fastest growing business unit in the company. We talked to Paul Smith about the benefits and challenges of open source, what’s surprising about Red Hat, and where a top executive can go to catch some killer waves.
What is your background and what are your daily responsibilities over at Red Hat?
Paul Smith: I’ll go in reverse order. First, I’m the general manager for the government business unit at Red Hat. In that capacity, I have oversight responsibility for the federal, state, local, healthcare and education markets for the U.S. The folks in my organization consist of direct sales, engineers, system integrators, business development, channels and marketing professionals. The public sector is the only true vertical in the company right now in sense that we are completely self-sustaining. We rely on the corporate team for things like product development, but we market and support the public sector almost independently.
How large is your business able to break out, how large is the unit?
Paul Smith: We went to a Wall Street briefing a few weeks ago and I can say it’s the fasting growing business unit in the company. I joined Red Hat to replicate my success of establishing and growing a public sector practice. Prior to joining Red Hat in 2000, I started the government business unit for Veritas (now Symantec), which was a big grass roots/startup operation that went from 10 million a year to a 200 million dollar business over just five years. When I joined Red Hat, although we were selling to the government, we didn’t have the focus to position it as a business unit at that point. We had success meeting the specifications for government, including cleared personnel, products that were meeting the specifications for government and associated expertise. We didn’t just have the sales and engineering perspective, the team spoke the language of government and understood the business struggles of government customers. We received a lot of attention from Matthew Szulik, our former CEO, in terms of investment and we’ve responded in kind. Once we built the infrastructure, the team developed many new customers and expanded existing relationships that allowed us to make some great headway.
Who are some of your customers in the Federal Space?
Paul Smith: Our lineup of federal customers is impressive. Right now almost every agency is a Red Hat customer, with varying degrees of adoption. In the DoD, as an example, Red Hat is used for Army mission-critical battle management and Navy ship work systems. Red Hat is also doing logistics systems for the Air Force. In the intelligence community, almost every three-letter agency is using Red Hat for data collection and analysis applications. Most of the labs within the DoD are standardized using Red Hat Enterprise Linux in a variety of scientific applications. On the civilian side, a couple of marquee examples would be the FAA, who track air traffic flow with our systems. NOAA is tracking hurricanes and the weather systems using Red Hat Enterprise Linux and The Census Bureau’s systems use Red Hat for counting people. In a word we are pervasive, yet we have a lot of opportunity for growth left in front of us.
Tell us about the open source alliance study that came out recently and what that means or Red Hat?
Paul Smith: The Federal Open Source Alliance – an HP, Intel, Red Hat partnership organization – conducted a third-party survey of about 217 government IT decision makers to analyze open source perceptions and adoption rates in the federal government. It validates what we already know by putting some hard numbers behind the adoption of open source. As an example 97 percent of the IT executives interviewed are using open source solutions right now and reported positive outcomes from their deployments. Fifty-five percent of all people interviewed said they are involved in open source applications right now or are currently looking to deploy open source. Of the remaining 45 percent who haven’t implemented an open source solution, 30 percent of those folks said they will use open source within the next 6-12 months. So the majority – almost 70 percent IT managers – are currently using or planning to use open source today. That is a compelling statement that verifies open source as gaining significant momentum in the Federal government.
What are some of the benefits and challenges of using open source software?
Paul Smith: Red Hat has done a great job in terms of monetizing open source as a business. In the beginning, early adopters chose open source solutions because the licenses were free, making it significantly easier from a capital expenditure standpoint to acquire both the software and related services. However, the real beauty proven over time is that open source provides, to an even greater extent, operational cost reduction for the government customer. When I talk about operational cost reduction, I’m talking about the total cost of ownership including service and support over time; associated hardware costs; data center real estate costs in terms of footprint, power and cooling costs; and payroll costs for systems maintenance and management. This is important because at the end of the day, even expensive proprietary software license expenditures only account for 8 percent of the Federal Government IT spend. More impressively, 30-35 percent of the total IT budget is spent on hardware, and 60 percent or more is pure people. So reducing the number of system administrators it takes to run 100 servers from 20 to 1 has a real impact. If the customer has a choice of commodity hardware instead being locked into specific systems and at the mercy of that vendor’s upgrade cycle, then they can save serious dollars over time. As IT becomes an integral part of all government services including protecting the warfighter and homeland security, technology that is smaller, in terms of footprint, saves you real estate on the data center floor and also takes up less power to run and cool. Power right now is a major concern for a lot of data centers because it is a finite asset. You can’t get more power on a particular grid. So Red Hat open source solutions impact all those things and that’s where the most compelling benefit of open source has been proven over time. We run on almost any hardware environment, providing the customer choice, whereas many customers were formerly captive to proprietary agendas such as Solaris running on SPARC and other proprietary unix chipset combinations. A fantastic byproduct is that Dell, HP and IBM have all embraced the new concept of choice and it’s actually extended their ability to provide a variety of quality hardware solutions to customers.
What’s the latest in IT security for open source?
Paul Smith: Security is another one of those things captured in the survey. Interestingly, it was one of the challenges indicated by customers who were not yet using open source, but the 68 percent of responders who are using it cited security as a main reason. It turns out to be a difference between those who are really educated versus those who are just learning. Red Hat Enterprise Linux is a COTS product, but the development model incorporates partner and customer collaboration. A couple of years ago the NSA developed code to enhance the security of Linux which was later called SELinux and enabled mandatory access control and now multi-level security. They took their research, development and code and submitted it to the open source community where it was rigorously vetted and edited, again in collaboration with partners and customers. Because it gained support from the community, Red Hat incorporated it into our product offering. This is a strong example of the value of the open source model and the inherent security provided by transparency and collaboration. Since that time we’ve actually gone through common criteria evaluations on the most recent versions of our operation systems, and it’s passed on three different protection areas: controlled access protection profile or CAPP, role based access control, as well as label protection security profile. The common criteria folks call this EAL 4 or evaluated assurance level 4. So very high levels of assurance, as certified by international bodies and all built on code that is the fruit of collaboration. So, the security issue is long since a thing of the past. As a matter of fact, most people will pretty much concur that Linux is more secure that proprietary Trusted Systems and generally passes certification much faster. Attribute this to the fact that it has more scrutiny from the vast communities of development and use. The applications that I mentioned at the Army, Navy, Marine Corps and Air Force are using our infrastructure to run life-critical battle management systems. The company continues to grow at about 40 percent year after year. I think people are getting that message.
What is something most people are surprised to learn about Red Hat?
Paul Smith: From the IT perspective, it’s the breadth and depth of our product line – we’re not just an operating system company. We are not just Linux – we have successfully acquired technology in the middleware space that fits nicely into arena of messaging and data federation. We’ve also integrated virtualization into the operating system so anyone with a subscription can use it at no additional cost, competing with some very well known virtualization companies. So some big surprises there. Another game changer is our announcement that Red Hat Enterprise Linux is available on the Amazon Elastic Compute Cloud, so you can now go to Amazon and for testing, development and peak load management situations and pay by the hour. I think for the laymen the surprise would probably be that we continue to grow at really remarkable rates, and the adoption of open source is now mainstream. The younger generations know all about collaboration; they all communicate by Facebook or other social networking sites. They all use Wikipedia, another open source product. Most people have a limited understanding of the research and development behind the human genome project, which is a huge shared collaborative in the scientific world. So what Red Hat has done is really embrace that model and build a software company around it.
Tell us something most people don’t know about you.
Paul Smith: I always ask that question. Outside of work I love to run, I’m a roadrunner. I love to run long distance races, even at my ripe old age, and I still surf.
What’s your favorite place to surf?
Paul Smith: I like to surf in Avalon NJ, but the thing I got the most enjoyment out of recently was some volunteer work I did down in New Orleans. Red Hat paid my way to go down for an alternate “spring break” to work on Katrina reconstruction projects. I camped in a tent outside the city, near ward 9, and with 1,000 other people in groups of twelve we went in and helped reconstruct houses. With a sledgehammer in hand, I helped gut three houses in the blistering heat. It was really hard work, but when I take a look back that is one of my proudest and fulfilling moments. It felt good to know Red Hat was a company that promotes community involvement and allowed me to participate.