Red Hat, Synnex Enlist Open-Source ISVs for Midmarket Channel Push

On Tuesday, Red Hat introduced the Open Source Channel Alliance, a group of 9 open-source ISVs that have signed distribution deals with Synnex to bring a wide range of applications to market through the distributor's network of VARs and integrators.

Roger Egan, vice president of North American Channels for Red Hat, said the goal of the alliance is to extend the flexibility and cost savings of open-source software to a broader audience, as well as to move from a point-product focus to one more attuned with what he defined as "solution stacks."

Founding members of the Open Source Channel Alliance include: Alfresco (content management), EnterpriseDB (database), Ingres (database), Jaspersoft (business intelligence), Likewise (identity management), Pentaho (business intelligence), Zmanda (backup and recovery), Zenoss (network and systems monitoring) and Zimbra (e-mail and calendar groupware).

"We've come to learn that we have jewels in the relationships we've nurtured with open-source ISVs," Egan said. "We're trying to take our relationships and knowledge of channel and extend that to them."

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In leading the Open Source Channel Alliance, Red Hat naturally wants to sell more of its Enterprise Linux and JBoss Enterprise Middleware. But according to Egan, the effort also reflects Red Hat's desire to raise its profile in the midmarket. Red Hat has aligned half of its North American sales organization with the midmarket, but sees the channel as the key to uncovering more opportunities.

As evidence of this commitment, Red Hat has grown its channel from 700 to 1,500 partners, and 55 percent of the company's revenue currently goes through channel partners. By hooking up with Synnex, Raleigh, N.C.-based Red Hat hopes to reach new types of partners and eventually boost that figure to 70 percent, Egan said.

"It's one of the strategic imperatives for us to become a channel-centric company. We don't want to be caught in that 55 percent range," Egan said. "We have the opportunity to grow our channel rather substantially. But the only way it'll grow is by us speaking the language of solutions as opposed to technology."

NEXT: Can Red Hat Follow Through? Red Hat in May 2007 launched the Red Hat Exchange, a channel program in which Red Hat sells and supports software products from ISV partners, several of which are participants in the Open Source Channel Alliance. The idea of that program is to connect platform vendors, application ISVs, customers and service partners in virtual ecosystems.

The Red Hat Exchange's focus on products is fine for enterprises, but the solutions focus of the Open Source Channel Alliance represents the best way for Red Hat to go after midmarket customers, according to Gordon Haff, a principal IT adviser at Illuminata, a Nashua, N.H.-based research firm.

But despite Red Hat's channel momentum, one Linux provider said the company has often spoken of embracing the channel in the past, but hasn't always followed through.

"Red Hat talks a lot about being channel-driven, but they've yet to come in aggressively with solutions, and they need to do that to gain more market share," said the source, who asked not to be named. "They'll work with you if you have a large opportunity, but you have to have something big to bring to the table for them to show interest."

Other Linux integrators hailed the Open Source Channel Alliance as a solid step in the right direction.

"The current economic climate really requires companies like Red Hat to put forth these types of efforts to better support their products and their channel partners," said Frank Basanta, director of technology for Systems Solutions, a New York-based integrator.

Egan said Red Hat's experience in getting its channel partners accustomed to recurring revenue from subscription support contracts will help it do the same with new partners that come in from the Synnex relationship. "Getting to the point where that economic model was understood in the channel took some evangelizing," he said.

With the open-source model, customers can choose year-to-year agreements without being handcuffed by large capital expenditures, said Joe Dickman, managing director of Vizuri, a Red Hat partner in Chantilly, Va. He expects the Open Source Software Alliance to further convey this core benefit of open-source software to the midmarket.

"We've had relationships with these companies before, but the Open Source Channel Alliance will make it easier to find solutions without having to form our own alliances," Dickman said.