India To Help Red Hat Touch $5Bn In 5 Years
Red Hat is banking on India to reach a target turnover of $5 billion within a period of 5 years, from its current turnover of $2 billion. According to CEO James Whitehurst, the business in India is growing at more than double the rate then the rest of the world. In fact, in the last year alone, the company grew at 21% on constant currency figures, last year. Whitehurst is known to have said, “India is one of our fastest growing markets. Red Hat does really when there is net new infrastructure to be set up. And the rapid pace of development that India is seeing sets really well with our offerings.
The interesting aspect of Red Hat’s business model is, most of the software from the company is free of cost, and they don’t earn anything from licensing fees. Their revenue dependence is sorely based on customers paying for the support and service it offers, which in turn make their offerings considerably cheaper than the competition in the market. Already, Red Hat’s services are being used by Aadhar, India’s biometric identification program.
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Other than that, there is significant presence of the company in organizations like Center for Railway Information Systems, Life Insurance Corporation of India (LIC), and SBI (State Bank of India), who are on board as customers. Also, BSE (Bombay Stock Exchange) trading platform runs on Red Hat’s software.
Talking of geographical expansion, Rakesh Rege, Managing Director of Red Hat India, mentioned that Bangladesh and Sri Lanka is also on their radar, and they have setup small teams in India, looking at those markets for opportunities. He said, “We have a couple of guys covering Sri Lanka, couple of guys covering Bangladesh but it is a shift away from what we were doing earlier. Now we are looking to build more local partnerships, build more local solution delivery capabilities and maybe a little later we will figure out how we can actually be there and do a lot more.
Smart City deals are also on the Red Hat plans, and Rege clarified, “We are interested in smart city deals that are happening in the state capitals and in the setting up of IT infrastructure in these regions. This will be partner-led because that is the Red Hat strategy.” The reason for their interest to work with the government is not entirely a random choice, but a carefully though after process, as the government policy ensures the use of Open-Source softwares for sectors such as banking, manufacturing, and telecom.
Read more: The Future Lies In Open Cloud: Red Hat
The appetite for Red Hat does not end there. Next on their radar is India’s startup community, which Whitehurst knows as users of open-source elements and passing them onto their final products and services. Whitehurst explained, “Startups, because they have very little money, typically start out with open-source architecture. But when they scale, they realize that they would like the kind of support that Red Hat provides and then we have to bring them over. We are looking at programs that can identify them sooner in that process.”
With most start-ups struggling with their input costs vis-a-vis their revenue earnings, Red Hat’s offering could well be a booster dose the community needs, before it can start banking on more expensive, if the need so arises.
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