TORONTO — Red Hat made a somewhat rare Canadian appearance Tuesday to show off its recently released RedHat Enterprise Linux 5 with Xen virtualization to a group of IT managers and decisionmakers.

Hosted by the Toronto-based value-added reseller Scalar Decisions, the event featured Red Hat’s product management director Joel Berman going over the features of the product, which was released in February. In an interview after his presentation, Berman said that the product is a step toward a new direction for the Westford, Mass.-based open source software company.

“Red Hat is moving from being a technology provider to an infrastructure platform provider,” said Berman. “The demand for computing is growing like crazy. There’s a 90 per cent growth on the hardware/provider side, but only 60 per cent improvements.”

If a company has a 10 per cent budget increase, for example, that still leaves a 20 to 30 per cent gap between what they need and what they can do, Berman said. And if it looks like they’re spending 50 to 60 per cent of their budget on existing infrastructure and applications, then they can do very little new things.“There’s no money for innovation.”

Berman said that Red Hat wanted to provide a less expensive virtualization model that could maximize customers’ assets, and offer the same functionality as some of the more popular proprietary offerings on the market.

These capabilities include the built-in RedHat Global File System (akin to Polyserve’s filing system), and also has multipath IO capability that is similar to EMC’s Power Path product. Finally, the virtualization offering is, said Berman, a more cost-effective solution than VMware. “We may not be as mature as (VMWare), but we’ll catch up,” said Berman.

“Xen’s a new player on the market,” said James Fraser, a team leader with Research in Motion’s BlackBerry engineering division. “It’s not really commercial yet — it’s still developing.” He said that there have been a noticeable number of improvements in the software since late last year, but that the company’s lack of a sound business model concerns him. “How will they make their money? (This issue) has slowed the product development,” said Fraser.

Red Hat’s relatively recent foray into the virtualization market could result in some customers’ hesitation, according to Ron Lipsius, virtualization consultant and vice-president of Toronto-based Data Center Works. “Deployment may take more time, as customers don’t have the model set up for Xen. Vendors like VMWare are more mature, while Xen is a new player, making (VMWare) deployment easier for the company,” he said.

However, Fraser said that Red Hat’s Xen offering is a much cheaper alternative to the industry leader, VMware, which, he said, can run a company up to $2,000 per CPU license. “It’s more economical,” said Fraser.

Research in Motion uses VMware in its corporate operations, said Fraser, but he has been shopping around for a virtualization solution for the BlackBerry Engineering group’s testing and staging environments. RedHat’s presentation inspired him to grant it a stab at selling him Red Hat Enterprise Linux 5. Said Fraser: “It’s because I prefer the open source model. (It comes down to) cost.”

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