Red Hat Revamps Partner Program

Tiers added as part of push to grow reseller base.

Looking to capitalize on growing interest by enterprises for open source solutions, Red Hat Inc. spent its summer revamping its partner program.

First, Red Hat upgraded its channel partner program, adding a third tier "premier" level on top of its existing designations of "advanced" and "ready" partners. The program upgrade was followed by the introduction of a new, solutions-oriented program called Catalyst that aims to align ISVs, channel partners, distributors and customers.

With the upgraded channel program, Red Hat is now offering partners three areas of specialization: infrastructure, middleware and virtualization. According to Roger Egan, Red Hat's vice president of North American channel sales, infrastructure primarily covers Red Hat Enterprise Linux, middleware includes its JBoss business and virtualization will cover new products to be released in the coming months.

"It's a significant enhancement," Egan says. "It's a recognition that our channel is maturing."

With Red Hat's new channel partner program, the company is offering incremental discounts to premier and advanced partners. For new premier partners, Red Hat is offering a tiered-deal registration program with discounts ranging from 10 percent to 20 percent.

Premier partners will also be eligible for more support, including Web and phone, and will have dedicated channel solution architects, Egan says. In order to qualify for premier status, the partner must have four sales people and two technical employees, all of whom must be trained. Two of the individuals in sales must be certified, while at least one technical person must have certifications. Premier partners will also have to offer a business plan that outlines targets and engagement plans, Egan notes.

The new channel program comes amid a huge, two-year effort to add channel partners. According to Egan, Red Hat went from between 250 and 500 channel partners two years ago to 1,500 today. Though the program has increased significantly in size, its membership tally is swamped by those of various other vendors -- especially Microsoft, which has 360,000 members enrolled in its Microsoft Partner Network.

"We're selecting those solutions that we believe come out of our partner ecosystem, and we're jointly marketing them to our users and to our partners through this ecosystem."

Roger Egan, Vice President, North American Channel Sales, Red Hat Inc.

Red Hat fired its second salvo at last month's annual Red Hat World and JBoss Summit in Chicago. In addition to releasing major new drops of its Red Hat Enterprise Linux and JBoss middleware, it launched the Catalyst program. Catalyst will be built on a Web-based portal to create a community around Red Hat's network of ISVs, channel partners and distributors, Egan says. Red Hat plans to add social-networking features to the portal.

"We're selecting those solutions that we believe come out of our partner ecosystem, and we're jointly marketing them to our users and to our partners through this ecosystem," Egan explains. "What we think will happen as a result of this is, we'll see more entry points for our partners to add more value-based discussions with their customers around Red-Hat-based solutions."

The first partners in the Catalyst program are Alfresco Software Inc., Ingres Corp., EnterpriseDB Corp., Jaspersoft Corp. and Pentaho Corp.

"It gives us a place to promote ourselves and promote our interoperability, not only to the Red Hat suite of tools but to other players in the ecosystems like content management systems, reporting and business intelligence solutions," says Larry Alston, EnterpriseDB's vice president of product management. "It will let us promote what looks more like a solution instead of just another piece of technology that Red Hat happens to be affiliated with."

Red Hat's outreach to partners comes amid reports that enterprises are more willing now than they were in the past to consider open source solutions. An IDC report released in August predicted compound annual growth in spending on open source software -- including infrastructure software and middleware -- at 22.4 percent through 2013. A separate IDC report released in late August forecasts revenue growth for Linux operating systems at 16.9 percent for the same period.

"Open source has changed from being somewhat foreign to enterprises to being associated positively with cost savings and flexibility. At the very least [open source] gives them some leverage with their old proprietary dealers," says Jay Lyman, an analyst with The 451 Group. "We're increasingly seeing that realization by resellers."

Nevertheless, despite overall growth for open source software and Linux generally, the growth outlook for Linux on servers isn't as rosy. The late August IDC report is forecasting that Linux server OS subscriptions and nonpaid deployments are likely to grow at a compound annual growth rate of just 1.1 percent over the next five years.

Contraction in server sales in 2009 is largely to blame for the declining compound annual growth rate of Linux servers, according to the report.

Also contributing to the declining growth rate of Linux is the increase in deployments of hypervisors and virtualized deployments that are reducing the number of overall servers.

"We've been given the uplift for virtualization," says IDC analyst Al Gillen. "The net result is you wind up with more instances of the operating systems -- you just don't wind up with more physical footprints of hardware."

IDC is also forecasting weak growth for Microsoft's Windows server in the next five years, Gillen adds.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.