Midtown Raleigh News

Red Hat workers bring energy to downtown Raleigh

Jason Hibbits, a project manager for opensource.com, dons his red hat during the opening for Red Hat’s new building on E. Davie Street on Monday, June 24 in downtown Raleigh. Every employee receives their own red hat after completing employee training.
Jason Hibbits, a project manager for opensource.com, dons his red hat during the opening for Red Hat’s new building on E. Davie Street on Monday, June 24 in downtown Raleigh. Every employee receives their own red hat after completing employee training. adrago@newsobserver.com

Mike Esser, a six-year veteran at Linux software company Red Hat, is delighted that the company moved its headquarters from N.C. State University’s Centennial Campus to the center of the city.

“Obviously love the space,” said Esser, 35, a manager for the communications and design team within the company’s marketing department. “It’s a little bit more light and bright. It’s much more open than our previous space. It gives us more of an opportunity to collaborate. … You could never find a meeting room in the other space, because we were just bursting at the seams.”

He also sees the location as a major plus. “Love downtown,” he said. “You can feel the heart and soul of Raleigh down here, the restaurants, the people.”

Red Hat, unquestionably a 21st-century software company, marked the shift of its headquarters to a downtown Raleigh building formerly occupied by an oh-so-20th-century business, Progress Energy, at a Monday ribbon-cutting ceremony. The company has been renovating and moving into the 19-story building on East Davie Street – now dubbed Red Hat Tower, although the signage planned for atop the building isn’t yet in place – since last July, with the final employees relocating earlier this month.

Local leaders are anticipating that Red Hat’s younger, hipper employees – more than 900 and counting locally, including more than 200 added in the last year – will be a boon to the city. Raleigh has been working to cultivate a start-up scene downtown and boost its image as an innovation-friendly community.

Harvey Schmitt, president and CEO of the Greater Raleigh Chamber of Commerce, said the downtown presence of Red Hat, which has 5,700 employees worldwide, creates “an environment of energy” that will help the area attract other businesses.

“You can’t overstate the power of branding,” said Brooks Raiford, president and CEO of the N.C. Technology Association. “Any region that brings a brand like a Red Hat in a prominent building with a sign on it ... really does attract attention.”

McCrory lauds jobs

Schmitt and Raiford were among a host of local dignitaries and elected officials who crowded into the first-floor lobby for Monday’s event.

Gov. Pat McCrory, who addressed the crowd before the ribbon-cutting, said of Red Hat: “They’re creating jobs. They’re an innovative company. They have talent that’s second to none. ... That’s the best of North Carolina.”

When Red Hat decided to relocate its headquarters downtown in 2011, it became eligible for more than $15 million in state incentives contingent on creating 540 new jobs over nine years. Since then, the company has been adding employees locally at a faster past than it anticipated.

The dignitaries also toured Red Hat’s new digs. Among the distinguishing characteristics: an expansive wrap-around outdoor patio on the eighth floor with Wi-Fi access for those who prefer working out-of-doors; a broad translucent staircase; a gaming area that includes pool and air hockey tables and a video-game center, and a ninth-floor cafeteria with a view of the Duke Energy Center for the Performing Arts.

Red Hat’s open-source software is free, but that didn’t stop the company from generating $1.33 billion in revenue for the fiscal year that ended in February, up 17 percent from a year earlier. The company makes money by charging customers for maintenance and support and for services such as training and consulting.

Location, location

The company’s software is not only significantly cheaper than that of competitors such as Microsoft, but it’s also renowned for its reliability. That’s why the New York Stock Exchange and more than two dozen stock exchanges around the world that handle more than half of the world’s trading volume depend on Red Hat software.

“Without a doubt, our most important asset is our people,” CEO Jim Whitehurst told the crowd. “A key part of attracting the best and the brightest is where we’re located. ... Now employers have to locate where employees want to be. That’s why I’m so proud that we can be here in Raleigh.”

Charlie Peters, Red Hat’s chief financial officer, noted that Citrix ShareFile also is planning to inject some new blood into downtown the downtown scene by relocating a division headquarters here.

“We’ll have two big technology companies right downtown,” Peters said.

Mike Bradley, 67, is a director of boating industry services at the Small Business and Technology Development Center who lives in a condominium near Red Hat’s headquarters. He and his wife have discovered that the influx of Red Hatters downtown means that they’re more likely to wait for a table at their favorite restaurants.

But Bradley said he doesn’t see that as a negative. “We know it means more new restaurants,” he said.