Recession prompted CIOs to cut cost, optimize infrastructure and ensure returns.  As various analyst reports indicate in 2010 IT budgets would provision for virtualization, unified communication, cloud and open source technologies.

Business Technology spoke to Arun Kumar, Senior Director of Business Development, Asia Pacific/Japan, to check if the global economic downturn has indeed resulted in an upturn in the fortunes of open source (OS) software. Arun has over 15 years of IT experience in Sales, Services, Marketing, and Operations and is a senior member of the Red Hat APJ management team.

What do you hear from Asia Pacific (APAC) CIOs on Open Source (OS)?

There is definitely an enhanced interest in OS, compare to three years ago, though different regions are at different levels of maturity.   

Interestingly, the interest is spread across all verticals. The interest is also not limited to any particular OS technology, it is across the board.  For example, there is more interest in using OS in virtualization, in switching from proprietary middleware to OS alternatives, building cloud with OS technologies.

Earlier OS value was seen just as a cost proposition. Now CIOs are using OS to optimize infrastructure, save cost, improve footprint and performance.

Recession has made CIOs go after technologies which save cost and optimize infrastructure. But we don’t see OS being mentioned in the same breath as virtualization, unified communication and cloud computing…

I would put CIOs in 3 camps – those betting on OS; those finding specific users for it and those who are just evaluating it. The first camp has increased in size. In 2007 CIOs were happy with their cost structure. In 2009 they have aggressive migration strategies which take out cost. CIOs are also seeking open standards to improve performance.

If you look at specific verticals, large financial institutions, which have worldwide operations, are leading in OS deployments in the region. A lot of telecom infrastructure makes heavy use of Linux. Many companies may not seek solutions explicitly identified as OS; but they buy solutions which are built using OS. Many telcom firms see OS as an enabling solution. 

Governments have become bullish on OS. In India many government tenders require vendors to make two cost estimates – one for using proprietary technologies and another for using OS alternatives to them. Governments are interested in OS as they are based on open standards. We find this across the region.

Are there any numbers to indicate that CIOs  are more focused on OS now?

Red Hat performance is a good testimonial. In the last 12 months we have grownwhile many software vendors have been flat or even experienced negative growth. ((For the third quarter ending November 30, Red Hat announced a revenue of $194 million, up 18% year-over-year – Editor.)

But OS seems to be catching up with market leaders in many key markets? If you take virtualization for example, VMware is ahead of the pack by miles?

Customers manage heterogeneous environments; their servers, storage, operating systems come from different vendors. Making all of them work together in a virtual environment is a challenge. Being an OS vendor Red Hat would play a key role in making the different pieces work.   

VMware got into the market early and has locked-in agreements with customers. When these agreements come up for renewal in the next 12 to 18 months, customers would be open for other vendors.

A big chunk of VMware business comes from virtualizing Linux machines. We can do a better job in this space. Our customers are also happy about the number of virtual machines we run on an operating system at one-third of the cost.  

Virtualization is not just about hypervisors. Red Hat offers a seamless integrated stack to companies. Our virtualization solutions also come free as part of our subscription packages.

Several alliances have emerged to offer pre-integrated infrastructure solutions to customers? For the moment all of them seem to be based on proprietary solutions. Would an OS vendor like Red Hat participate in these alliances?

These loosely cobbled alliances are happening to ensure inter-operability. OS solutions are designed to be interoperable and they do so without any formal agreement.

Red Hat has built a viable eco system of 4,000 ISVs and 200 hardware systems.  We also make formal agreements when required. For example, last year we announced an agreement with Microsoft to validate and certify each other’s virtualization software and coordinate technical support.

According to analysts 90% of data centers would be divided between Windows and Linux a few years from now.  This agreement ensures there would be less headaches for customers. 

APAC has emerging and mature markets. How are these different markets deploying OS?  

In the emerging markets, the infrastructure is being built up now and there are no legacy issues. The Indian service providers have the best cost structure in the world as there is no legacy. This environment is very supportive of OS across verticals and horizontals.

In mature markets, the concerns are around migration. Migration and new projects are creating opportunities for OS.

What are the top 5 priorities for Red Hat for 2010 and 2011?

Further monetize and grow Linux platform; increase market share in middleware by prompting new migrations; promote virtualization as an overall platform; provide better  integrated management tools for customers to manage multiple layers of the stack;

facilitate greater cloud interoperability.