The Indian connection to Red Hat's growth story

Last financial year, open source software provider Red Hat became the first Linux vendor to breach the $1-billion revenue mark, recording a revenue of $1.3 billion. This growth story has a strong India connect.

Red Hat had set up its research and development (R&D centre here in early 2000, with just 10 employees; now, this has grown into a 300-employee entity.

The centre is one of the company’s largest outside the US. The company’s overall headcount is 5,700, while its staff strength in India is 450-470.

The significance of the Pune R&D centre is highlighted by Marco Bill-Peter, vice-president, global support services. He says 40 per cent of all support queries globally comes out of Pune.

“We never saw India as a labour arbitrage centre. For us, it has been about hiring the best engineering talent. I think we have been giving employees the right environment to grow, as our attrition rates are one of the lowest in the industry,” he said, adding Pune was the most important part of Red Hat’s support system.

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Besides the R&D centre, the company also has another India connection. In 2011, Red Hat acquired Sunnyvale-based start-up Gluster, founded by Anand Babu Periasamy and Hitesh Chellani, for $136 million.

The acquisition not only provided Red Hat a centre in Bangalore; it also strengthened the company’s offerings in the growing cloud-based storage market.

Through the last two years, the company has been focusing on Gluster, working on some of its features and making it a more reliable and stable platform.

“This year, we will be working on the sale front for Gluster. We are focusing on markets such as the US, Europe and Japan,” said Bill-Peter.

After the acquisition of Gluster, a lot of Red Hat’s storage-related development would be driven from Bangalore.

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“We have storage teams in Boston and Mountainview. All of our engineers will collaborate with the Bangalore team on storage,” Bill-Peter said.

He added India was very important for the company, “not only as an R&D centre, but also as a market. It is one of the fastest growing markets for the company. Till a few years ago, we focused only on direct marketing, but we have realised in a market such as India, partners matter. We are also strengthening our tie-ups with distributors and ISVs (independent software vendors)”.

Bill-Peter acknowledges the adoption of Linux in India has been slow compared to the US.

“But in the last few years, we have seen interest among clients. It is not just coming from enterprises using Unix, but also from e-commerce players, start-ups and government sectors,” he said.

In India, Red Hat’s clients include Bharti Airtel, Just Dial and Hungama.com.