Red Hat Appoints First Channel Chief

Plans to launch a global channel program this year

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Linux leader Red Hat, which plans to launch a global channel program in 2003, has anointed four-year company veteran Michael Evans to serve as its first channel chief.

Evans, who has been named vice president of channel sales and development for Red Hat, is a seasoned executive and former vice president of business development for Red Hat. In that capacity, Evans was responsible for executing a wide range of partnerships including those with IBM, Dell Computer and Oracle, as well as the company's global reselling pact with IBM Global Services. He also co-founded Bluecurve (which Red Hat acquired in 1999) and was head of business development for Intel platforms at Sybase.

Red Hat has relied primarily on its own professional services arm in the past but intends to make a bold move into the channel, Evans said in an interview with CRN. The Red Hat channel program and model, he said, will look more like that of Microsoft than that of IBM.

"There's a very large shift going on in the company to enable a global partner base to provide Red Hat subscriptions and services to those customers, and we're looking at using the partner model more than we have in the past," Evans said. "Our goal is not to build a huge consulting operation. We don't plan to have a massive consulting sales force."

In October 1998, Red Hat announced a major distribution agreement with Ingram Micro and its first authorized reseller program. While VARs continue to access Red Hat's software through all major distributors, to date Red Hat's efforts to build up its professional services arm and enterprise sales efforts squashed the enthusiasm of some resellers.

However, Evans said Red Hat has had a change of heart and will not continue to grow its professional services. Instead, Red Hat's new global channel program will be tailored to meet the needs of the channel more closely, he said. Red Hat's reselling agreement with IBM Global Services was the first major pact as part of its renewed emphasis on the channel, but it is only one of many resellers, VARs and consultants expected to participate in the new certified reseller program.

Red Hat, which primarily serves enterprise markets, also plans to have a more stratified range of product offerings to meet the needs of various channel partners, including various option for large, medium and small companies in its advanced server and advanced product line. That includes the company's recently launched Command Center service that is part of Red Hat Network.

"There's two parts of the strategy," Evans said. "We want to work through partners of the big players, like IBM, HP, Oracle and Dell. IBM business partners is one of the groups we have high interest in, especially the xSeries [Intel] group and huge Compaq side [of HP] to sell. We also have an organization building a plan to pursue partnerships with the integrators and VAR reseller groups from the big guys all the way down to the midsize guys."

He declined to specify the annual fees for the program but noted partners would get a discount for selling Red Hat's subscription services and managed services only. That way, channel partners won't have to sell licenses. Margins have not yet been finalized, Evans added.

When asked why the Linux company has been slow to adopt a channel model, Evans said demand hasn't been there--until recently.

"The world is beating down the door for it," Evans said about the forthcoming channel program. "The channel becomes critical once the technology and deployments have reached a mass momentum and corporate adoption. In the last 12 months, the virtuous [corporate] referencing cycle has kicked in and we have all kinds of referenced customers."

The company plans to provide partners with training and marketing assistance, Evans said. The Linux company recently unveiled a new Red Hat Certified Technician certification for IT administrators. Those in the Linux industry have said the company's existing Red Hat Certified Engineer designation is respected but deemed too technically deep for all business/corporate IT professionals.

Solution providers were mixed on the planned partner program.

One channel player who has worked with traditional vendors such as Novell and Microsoft said demand for Linux is low, but it may pick up as the products improve.

"Linux seems to be getting easier to configure and work with as newer versions come out," said Jeffrey Sherman, president of Warever Computing, Los Angeles. "So there's a good possibility that I will be increasing where I might try to push Linux."

Sherman said factors such as cost and details of the program for SMB solution providers would determine whether he ultimately participates.

Another more Linux-savvy solution provider said Red Hat's past efforts to work with the channel have failed and the company will need to ensure solid margins and an economic benefit .

"In the past, they had requirements like staff certifications and cash outlays that weren't compensated in the value of the program. If they are planning on truly partnering with local resellers and solution providers, they will have to provide leads or other significant benefits," said Anthony Awtrey, vice president of integration at Ideal Technology, a Linux solution provider in Orlando, Fla.

"Right now, without their channel program, I can provide customers solutions based on Red Hat without spending my service profits, since the cost is tied to Dell hardware," he added. "They may make some money from Dell, but I am not paying extra for Red Hat services I frankly don't need."

He added that the nature of subscriptions and managed services may not bode well for independent partners. "The customer will elect to participate in the Red Hat Network to get updates based on their own decision and we don't see that money either," Awtrey said. "If Red Hat wants me, as a solution provider, to pay for something extra, it has to be something with significant value to me."

Although Red Hat clearly plans to make some aggressive moves, whether it will attack competitors is up for debate. Evans declined to comment on whether the company will go after channel arms, such as Microsoft's Certified partner base or the Unix/Linux channel arm of the SCO Group.

Shaun Cutler, director of TeamSCO, SCO Group's 16,000-strong channel program, acknowledged Red Hat as a competitor but said it's the right move. "We think it's a smart thing. We know the channel is where it's at. Candidly, it's a smart move on their part because the channel adds value," said Cutler. "But Linux is only one of the reasons our partners choose SCO. We acknowledge Red Hat's force and we take it seriously, but it won't change our approach to our channel partners.

Cutler noted SCO's upcoming suite of new products for its Linux resellers, such as SCObiz, gives his channel partners a way to differentiate form the competition. The vast majority of TeamSCO members do other Unix and Linux business, but most of their revenue remains in the Unix business. However, the shift to Linux is significant, he maintains.

Red Hat, which primarily serves enterprise markets, also plans to have a more stratified range of product offerings, including various options for large, medium and small companies in its advanced server and advanced product line. That includes the company's recently launched Command Center service that is part of Red Hat Network.

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