Red Hat creates blueprint for select channel engagement

Mumbai

June 5, 2008

Red Hat India is working on creating a value channel ecosystem that will work
with hardware channel partners and independent software vendors to integrate Red
Hat's solution stack with their offerings. This will also help it bring into
its folds those partners who have trained people but don't know how to break
into key customer accounts.

The reason Red Hat is considering this select channel model is because often
a hardware solution provider (SP) pitches for a complete project and then gets
in touch with Red Hat to supply and support the open source requirements
included in that project. In most cases, Red Hat has to offer the implementation
and support directly to the customer because it does not want to lose the
enterprise customer.

At the same time, Red Hat's partners do not get involved in such projects
because there is very minimal value addition that they can add to it. Besides
the hardware vendor who has pitched the project to the enterprise customer
determines the software partner's margins. “We are trying to create a value
channel and see how to build expertise in them for offering support to the
customers with minimal handholding from us after the initial training,” said
Nandu Pradhan, Red Hat India.

This is why the vendor is now trying to create an ecosystem where selected
partners, who have skillsets in some or the complete stack of Red Hat solutions,
can partner with the hardware partner who has won the project and manage the
software deployment.

“By adopting this model we will also be able to scale up those of our
partners who have skillsets and trained manpower on the open source desktop
products, into the enterprise applications space,” Pradhan noted.

The company will initially work with 20 partners on an experimental basis to
ensure that there is no cluttering and in-fighting amongst these partners.
Dedicated account managers will work closely with these solution providers to
give them 24x7 support in understanding the various aspects of the entire
project and plug the right Red Hat solutions into it.

“This concept is basically a marriage of convenience between hardware
partners of OEMs like IBM or HP, independent software vendors as well as our
solution providers who can build applications upon these products,” explained
Pradhan.

Getting such a pre-alliance practice in place will also ensure that the
interests of those partners who invest in Red Hat solutions will be safe
guarded. “We will make it clear if a partner is not recognized by us then we
will not support the open source solutions deployed by them. This is to ensure
that there is some standardized structure to the partners who are involved in
key projects, rather than Red Hat just becoming a final support provider,”
added Pradhan.

Channel sales provided 54 percent of Red Hat's global revenue in its fiscal
quarter ending February 29, 2008, and the company doubled its business through
traditional channels including VARs and system integrators during its fiscal
year ending on that date. Red Hat has also more than doubled the number of its
Advanced Business Partners (ABP) in the last year. ABP receive direct access to
Red Hat sales, pre-sales, support and marketing staff, as well as other
substantial benefits to enable rapid growth of the partners' Linux and open
source solutions portfolio.