Red Hat CEO: Business Leaders See Digital Transformation As A Threat

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Across the tech industry, digital transformation is a buzzword that promises unprecedented market opportunity. But for many business leaders, the term suggests uncertainty and risk, Red Hat CEO Jim Whitehurst said Tuesday in his keynote at the company's North America Partner Conference 2017 in Las Vegas.

A day after announcing earnings that sent Red Hat's stock soaring, Whitehurst told partners, who deliver more than 70 percent of Red Hat revenue, that they must understand those executives' concerns and learn how to address them.

Enabling customers to "surf the risks of digital transformation" will "require a greater understanding of their businesses, and that's not something that Red Hat can do alone," Whitehurst said. "You have to understand our joint customers' businesses better than we understand them."

[Related: Red Hat Intros New Channel Program Tailored For App Delivery Partners]

The problem is that digital transformation moves too fast to plan for, nullifying the strategic planning capabilities honed by executives running large companies, from banks to airlines.

"For large existing enterprises, digital transformation is threat," Whitehurst said. "CEOs don't generally talk about the concept in a positive way … There's real fear because their very strengths are now weaknesses."

But enterprise leaders understand they can't avoid the topic. While the term is broad, few businesses and industries aren't undergoing some related process, he said.

"Digital transformation is about retooling the capabilities of enterprises to exist and thrive and survive in a vastly different world than they have in the past," Whitehurst told partners.

At last year's partner conference, Whitehurst concentrated on the theme of how Red Hat, which at the time had just crossed the $2 billion annual revenue threshold, would scale to $5 billion.

He said he got some blowback from framing the discussion in those starkly financial terms, and for the 2017 conference abandoned further laying out that roadmap for sales growth.

"It's not that we won't achieve that $5 billion. That's an inevitability given the traction we have," he said. "But we don’t want just to be defined by the set of dollars that we generate."

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