Q&A: Red Hat CEO believes Delta past isn't a liability
Jim Whitehurst, 40, thinks his experience as Delta's COO will help him turn Red Hat into a big company. Also, he talks the open-source talk.
Some folks paused when they heard an airline executive was taking over as Red Hat's new chief executive. But Jim Whitehurst thinks his job as Delta Air Lines' chief operating officer will serve him in good stead.
In an interview Friday, the 40-year-old said he believes his experience running much of a 50,000-person company and focusing on top priorities will serve the Linux seller well as it tries to increase revenue.
Whitehurst also has at least a touch of the open-source zeal of his predecessor, Matthew Szulik, who left the CEO job January 1 because of family medical difficulties but who remains chairman of the Raleigh, N.C.-based company. Whitehurst has been a Linux user since the Slackware days of the mid-1990s, and he's already got the open-source sales pitch down pat.
He faces plenty of challenges, to be sure. The integration of the JBoss Java server software has been a rocky process, Red Hat has no shortage of competitors--some of them also close allies--and Whitehurst will have to make the abrupt shift from Delta Air Lines' bankruptcy-induced bunker mentality to the growth challenges of Red Hat.
But Whitehurst seemed nothing if not game in a conversation today. Here's an edited transcript of our chat.
How did you first hear about this Red Hat job?
Whitehurst: It was from a recruiter, a cold call from Nosal Partners. I was thrilled and basically said, "When can I get up there?" (Red Hat Chairman) Matthew (Szulik) and I met early on a Sunday morning two days later. We hit it off well.
What was your first reaction when you heard about Red Hat? Was it "Who?" or was it "This is the opportunity I've been waiting for"?
Whitehurst: It was "This is the opportunity I've been waiting for." I've used Linux since the mid- to late 1990s at home. I screwed around with Red Hat since before the enterprise version and it was free. I've been using Fedora for quite awhile. I'm very familiar with the products and the company. As my wife said, it was the first thing I came home with absolutely lit up about.
Why did you leave Delta?
Whitehurst: I was COO at Delta throughout the bankruptcy. Delta emerged in May, and I was the leading internal candidate to be CEO. The new board of directors decided to go outside. I don't have any issues with that. When the new CEO came in, frankly, the entire company other than finance reported to me, and it wasn't reasonable for him to come in and have one report. He needed a wide berth. We agreed it would be a good thing for me to go for him to be able to take the reins fully. It was very amicable.
When you look at Delta vs. Red Hat, there's a dramatic difference in business models. Should your employees, customers, and investors be concerned that somebody from an old-line industry is taking over at a software company with a fairly revolutionary business model?
Whitehurst: I don't think so. I'm now a Red Hat shareholder. I do think I bring a set of skills that will augment skills here. As a large customer of technology at Delta, I think have a good sense of what CIOs look for. Airlines in general are very reliant on technology, so having a customer perspective can be very helpful. This company has massive opportunity. One of the big issues is how to scale the company. I bring some big-company process skills to ensure this company has the capability to grow from $500 million to $5 billion (in annual revenue) and continue to run smoothly and to offer excellent service.
Another parallel is that airlines have very low barriers to entry. The way the established companies have developed is they're not particularly customer-friendly. No one talks about their wonderful airline experiences. A thrilling thing about Red Hat is that with open source, we don't have big barriers to entry, and it's a chance to define a company around customer service. We'd better never lose our focus on the customer, because you can't lose it and get it back. That's why I feel good about competing against the proprietary-software guys. Service used to be an afterthought, it was the hassle that you had to do if you wanted to sell the next version of your software.
Where did Delta use Red Hat software and where did it not?
Whitehurst: I want to be a little careful because I don't know what Delta has disclosed. There are some specific systems there that ran on Red Hat, some pretty big mission-critical pieces of software.
Is it fair to say it wasn't the core of the operation?
Whitehurst: The core of the systems were the old original TPF (Transaction Processing Facility) systems that have been around forever--the things the airlines know they'll have to migrate off of over time. But while we were all bleeding was not the time to do it.
You talked about being able to scale Red Hat. Red Hat has grown a lot, but the big software IPO in 2007 was VMware, which has grown a lot more and a lot faster. It seems like proprietary software isn't dead yet.
Whitehurst: I don't think proprietary software is dead by any stretch of the imagination. But a couple comments. One thing we'll talk about in early days is innovation and making sure Red Hat leads innovation and drives innovation in open source. Technology is an industry where there's a massive first-mover advantage. Our virtualization is excellent, but we weren't there first. VMware was and has triple our revenues and a gazillion-dollar market cap. Innovation and being there first are extremely important. We were the first enterprise Linux and we have 80-something percent share of the enterprise Linux market. Being first is important. Making sure Red Hat is a leader in the open-source community, to make sure open source is not only iterating but also innovating, is important.
Szulik had a good soapbox about open-source software. Will you be taking on his evangelism?
Whitehurst: I'm very passionate about open-source. It's a fundamentally better way to develop software. Open source is a truly disruptive technology and will continue to take share and grow. Open source is a good. By us doing well, we're also doing good. Democratizing content and democratizing information has an incredibly important benefit to society, and we play a key role in doing that. Does that make me a zealot or not? I don't know.
Matthew is not going away. He'll continue to work with me and continue to be a key spokesman for open source.
What kind of changes can we expect you to bring to Red Hat? How is your management style different?
Whitehurst: I think he and I share similar traits. I'm very open and informal. It's hard for me to say what changes will come. In terms of strategy, I'm brand new. I will say I have a couple of biases. One is focus, focus, focus. This is a company that is almost encumbered by the opportunities we have. But chasing 1,000 things and doing none of them well won't be good for us or be good for open source. Making sure we nail the three or four things we do and absolutely nail them is going to be critical. You won't see us going into five or six new business, but you will see us redoubling focus on several.
JBoss has been a difficult acquisition. Is this a situation like with (Sun Microsystems CEO) Jonathan Schwartz, where you show up after some of the tough stuff has been fixed and you get to take credit for it, or is this something where there needs to be a lot more work?
Whitehurst: I hope I'm showing up to take credit (laughing). Timing in life is everything. As we talked about the third quarter, we're getting some real momentum with JBoss and very good about it. Clearly that is part of our core and we'll have a lot of focus going forward. Does that mean change or not? I don't know. Things are looking quite good now.
Can we look for a push for JBoss on Windows or on various versions of Unix?
Whitehurst: JBoss runs on Windows now.
Right, but how about a bigger marketing push, for example?
Whitehurst: It's too early for me to start talking about strategy at that level. What I will say is that it's simple. Does it add value to our customers that our customers want? There are two things I'm unwavering about: one is we are open-source and we will continue to be open-source; second, every single decision we make is filtered through "is this adding value for our customers?"
Another possible priority is Linux on the desktop. It's something Red Hat has tried for years to make into a reality. Is that something Red Hat is going to focus on and redouble efforts on, or is it one of the things you're going to let fall by the wayside for a few years?
Whitehurst: Hey, I just found the bathroom and the coffee, so I'm not calling exactly what's in vs. out. That's something that as a management team we'll go through a rigorous process and jointly determine.
There are some obvious competitors out there, like Novell and Microsoft, but I'm more interested the coopetition companies like IBM and Oracle that are both partners and competitors. Do you see those companies more as a long-term threat or long-term ally? IBM has a strong server business and Oracle has a strong database business, but they also have straight-up competing products, and Red Hat is expanding into those companies' turf.
The answer is yes and yes. They are absolutely threats to us, and they are also absolutely partners. The airline industry no different. (Delta) had an alliance with Continental, Northwest, and SkyTeam where we partner in some areas, and we are ferocious, brutal competitors in others. It's the same thing with IBM and Oracle. There is no black and white in this world. It's all shades of gray.