, Staff Writer
Last month, Red Hat CEO Matthew Szulik said his software company would own half the global server market by 2015, an ambitious goal because its rival, Microsoft, controls much of that business.On Wednesday, Szulik's staff provided more details on how the Raleigh company plans to make it happen.The initiative, dubbed "Linux Automation," will over time make it easier for Red Hat customers to connect with more types of software and hardware. New versions of its software will help bridge gaps in customers' IT systems, said Scott Crenshaw, head of Red Hat's Linux operating system. That, in turn, will drive demand and attract new customers, he said.Red Hat is the world's largest distributor of the Linux operating system and makes money selling subscriptions and services. It is also a champion of the Linux open-source software model as the alternative to Microsoft's Windows.The company plans to achieve its market-share goal largely by undercutting on price."They clearly want to increase market share by adding more features and more value to their product while keeping prices the same," said Steven Ashley, an analyst with Robert W. Baird & Co. "That should drive demand."Red Hat's Enterprise Linux operating system competes head on with Microsoft's Windows in the business server market. Microsoft's Windows has about two-thirds of that market; Red Hat has less than 20 percent.But Red Hat's latest initiative will increase customers' hardware-software compatibility, reduce stressful configuration processes and shift the balance toward Red Hat, Crenshaw said.In essence, the Linux automation strategy will give Red Hat customers the ability to run any software application -- such as for managing manufacturing or retail processes -- with any type of server, Crenshaw said.According to some analysts, that's a significant improvement.Wednesday marked the first time the company has openly shared such a goal. "The projection is probably in line with what most of us think; it's just never been thrown out there before," said Ashley of Robert W. Baird.But Cross Research analyst James Gillman said that half the server market is an unlikely level, given the entrenchment of such formidable competitors as Microsoft and, increasingly, VMware."Nobody is really stealing share from anybody right now," said Gillman, who maintains a "sell" rating on Red Hat.He described the company's announcement Wednesday as "basically a repackaging of previous messages."Red Hat shares fell 32 cents to close at $22.11. The stock is down nearly 4 percent this year.
frank.norton@newsobserver.com or (919)-829-8926