{"id":24069,"date":"2021-04-28T05:23:23","date_gmt":"2021-04-28T05:23:23","guid":{"rendered":"https:\/\/rbsitsoftwaresolution.com\/blog\/red-hat-ceo-looks-to-maintain-double-digit-growth-in-second-year-at-helm.html"},"modified":"2021-04-28T05:23:23","modified_gmt":"2021-04-28T05:23:23","slug":"red-hat-ceo-looks-to-maintain-double-digit-growth-in-second-year-at-helm","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/red-hat-ceo-looks-to-maintain-double-digit-growth-in-second-year-at-helm.html","title":{"rendered":"Red Hat CEO looks to maintain double-digit growth in second year at helm"},"content":{"rendered":"

Red Hat<\/a> CEO Paul Cormier runs the centerpiece of IBM\u2019s transformation hopes. When Big Blue paid $34 billion<\/a> for his company in 2018, it was because it believed it could be the linchpin of the organization\u2019s shift to a focus on hybrid <\/a>computing.<\/p>\n

In its most recent earnings report, IBM posted positive revenue growth<\/a> for only the second time in eight quarters, and it was Red Hat\u2019s 15% growth that led the way. Cormier recognizes the role his company plays for IBM, and he doesn\u2019t shy away from it.<\/p>\n

As he told me in an interview this week ahead of the company\u2019s Red Hat Summit<\/a>, a lot of cloud technology is based on Linux, and as the company that originally made its name selling Red Hat Enterprise Linux (RHEL), he says that is a technology his organization is very comfortable working with. He sees the two companies working well together, with Red Hat benefitting from having IBM sell his company\u2019s software, while remaining neutral technologically, something that benefits customers and pushes the overall IBM vision.<\/p>\n

Quite a first year<\/h2>\n

Even though Cormier has been with Red Hat for 20 years, he took over as its CEO after Arvind Krishna replaced Ginni Rometty<\/a> as IBM\u2019s chief executive and long-time Red Hat CEO Jim Whitehurst moved over to a role at IBM last April. Cormier stepped in as leader<\/a> just as the pandemic hit the U.S. with its full force.<\/p>\n

\u201cGoing into my first year of a pandemic, no one knew what the business was going to look like, and not that we\u2019re completely out of the woods yet, but we have weathered that pretty well,\u201d he said.<\/p>\n

Part of the reason for that is because like many software companies, he has seen his customers shifting to the cloud much faster than anyone thought previously. While the pandemic acted as a forcing event for digital transformation, it has left many companies to manage a hybrid on-prem and cloud environment, a place where Red Hat can help.<\/p>\n

\u201cHaving a hybrid architecture brings a lot of value [\u2026], but it\u2019s complex. It just doesn\u2019t happen by magic, and I think we helped a lot of customers, and it accelerated a lot of things by years of what was going to happen anyways,\u201d Cormier told me.<\/p>\n

In terms of the workforce moving to work from home, Red Hat had 25% of its workforce doing that even before the pandemic, so the transition wasn\u2019t as hard as you might think for a company of its size. \u201cMost every meeting at Red Hat had someone on remotely [before the pandemic]. And so we just sort of flipped into that mode overnight. I think we had an easier time than others for that reason,\u201d he said.<\/p>\n

\n

New Red Hat CEO Paul Cormier faces a slew of challenges in the midst of pandemic<\/a><\/p>\n<\/blockquote>\n

\n

Acting as IBM\u2019s growth engine<\/h2>\n

Red Hat\u2019s 15% growth was a big reason for IBM showing modest revenue growth last quarter, something that has been hard to come by for the last seven years. At IBM\u2019s earnings call<\/a> with analysts, CEO Krishna and CFO Jim Kavanaugh both saw Red Hat maintaining that double digit growth as key to driving the company toward more stable positive revenue in the coming years.<\/p>\n

Cormier says that he anticipates the same things that IBM expects \u2014 and that Red Hat is up to the task ahead of it. \u201cWe see that growth continuing to happen as it\u2019s a huge market, and this is the way it\u2019s really playing out. We share the optimism,\u201d he explained.<\/p>\n

While he understands that Red Hat must remain neutral and work with multiple cloud partners, IBM is free to push Red Hat, and having that kind of sales clout behind it is also helping drive Red Hat revenue. \u201cWhat IBM does for us is they open the door for us in many more places. They are in many more countries than we were [prior to the acquisition], and they have a lot of high-level relationships where they can open the door for us,\u201d he said.<\/p>\n

In fact, Cormier points out that IBM salespeople have quotas to push Red Hat in their biggest accounts. \u201cIBM sales is very incentivized to bring Red Hat in to help solve customer problems with Red Hat products,\u201d he said.<\/p>\n

\n

IBM breaks latest revenue losing streak as cloud revenue shows modest growth<\/a><\/p>\n<\/blockquote>\n

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No pressure or anything<\/h2>\n

When you\u2019re being billed as a savior of sorts for a company as storied as IBM, it wouldn\u2019t be surprising for Cormier to feel the weight of those expectations. But if he is he doesn\u2019t seem to show it. While he acknowledges that there is pressure, he argues that it\u2019s no different from being a public company, only the stakeholders have changed.<\/p>\n

\u201cSure it\u2019s pressure, but prior to [being acquired] we were a public company. I look at Arvind as the chairman of the board and IBM as our shareholders. Our shareholders put a lot of pressure on us too [when we were public]. So I don\u2019t feel any more pressure with IBM and with Arvind than we had with our shareholders,\u201d he said.<\/p>\n

Although they represent only 5% of IBM\u2019s revenue at present, Cormier knows it isn\u2019t really about that number, per se. It\u2019s about what his team does and how that fits in with IBM\u2019s transformation strategy overall.<\/a><\/p>\n

Being under pressure to deliver quarter after quarter is the job of any CEO, especially one that\u2019s in the position of running a company like Red Hat under a corporation like IBM, but Cormier as always appears to be comfortable in his own skin and confident in his company\u2019s ability to continue chugging along as it has been with that double-digit growth. The market potential is definitely there. It\u2019s up to Red and Hat and IBM to take advantage.<\/p>\n

\n

Incoming IBM CEO Arvind Krishna faces monumental challenges on multiple fronts<\/a><\/p>\n<\/blockquote>\n

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Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/0-uXc5vy8nM\/<\/p>","protected":false},"excerpt":{"rendered":"

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