 To the seaport in Boston, Massachusetts everybody's buzzin the Bruins are playing tonight. They tied it up the Celtics tied it up last night We're excited. We don't talk about the Red Sox I got struggled, but you know, we have good distractions Paul Cormier is here He's the president and chief executive officer Red Hat and also a Boston fan Of course to see of course you too. Nice to see you guys. It's been it's been a while Yeah, we saw you, you know online and virtually for a couple of years there But you know, we've been doing Red Hat summit for a long long time Of course we were talking earlier. It's just much more intimate kind of a VIP event a lot Few more suit jackets here, you know, I got my tie on so I don't get too much grief I usually get grief when I wear a tie to Red Hat summit But it's a different format this year Compressed keynotes your keynote was great the new normal sometimes we call it the new abnormal But you know, how do you feel I? Feel great first of all, you know combination today virtual audience in in-house audience here today I think we're going to see a lot of that in the future I mean we designed the event around that and I think it I think it played pretty well kudos kudos to our team You're right. It's it's a bit more intimate even the way it was set up But those are the conversations we like having with our customers and our partners much more partner centric As well right now as well, you know, we were talking about you know hybrid cloud It was kind of you know, it's good marketing term and but now it's it's it's become the real thing I've said many times The definition of cloud is changing. It's expanding. It's not the cloud is no longer this remote set of services You know somewhere up in the cloud. It's on-prem connecting to a cloud across clouds out to the edge and you need Capabilities that work everywhere and that's what Red Hat did the markets just swimming toward you Yeah, I mean you look at it, you know, I was you know, if you look at it, you know The clouds are powerful unto themselves right the clouds are powerful unto themselves. They're all different, right? And that that's I mean hardware vendors were similar but different same thing You need that connective tissue across across the whole thing. I mean as I said in my keynote today I remember talking to some of our CIOs and customers 10 years ago and they said we're going 90% of our apps tomorrow to one cloud and We knew that wasn't practical because of course the clouds are built from Linux So we knew it was underneath the hood and and what's happened It's taken some time, but as they started to get into that they started to see well Maybe one cloud's more suited for one application the other these apps you may have to keep on premise But you know what really exploded it the hybrid thing the edge now They're putting things at the edge the GM announcement tell you I know you're going to talk to Francis. Yeah later I mean that's that's a mini data center in there in every cloud But that's still under the purview of the CIO, you know So so so that's what hybrids all about is tying all those pieces together because it got more powerful But it also got more complex You mentioned me the connective tissue But we don't hear as much talk about multi-cloud seems to me as we used to This conference has been all about hybrid cloud You don't really talk about multi-cloud how important is that to the Red Hat strategy being that consistent layer? It's probably my mistake or our mistake because multi is more prevalent and more important than just hybrid alone I mean hybrid hybrid started from on-premise to one particular to any one particular cloud That was the first thought of hybrid, but as I said as as as Some of the cloud providers became so big Every every CIO I talked to whether they know whether they know what it utmost do are in a multi environment for a whole bunch of reasons Right, you know one cloud provider might be better in a different part of the world in another one cloud provider Might have a better service than another some just don't like to be stuck to one. It's it's really hybrid multi We should we should train ourselves to every time we say hybrid say multi because that's really that's really what it is It I think that happened overnight with with Microsoft, you know with Microsoft They've they've really grown over the last few years so as Amazon for that matter But Microsoft really coming up is what really made it a high a multi-world Microsoft Remarkable what what they're doing, but I I have a different thinking on this I heard Chuck Whitten last week at the Dell conference. He used he said use the phrase a multi-cloud by default Versus multi cloud by design and I thought that was pretty interesting because I've said that multi cloud is largely multi vendor You know and so hybrid has implications We bring it and a shesh came up with a new term today meta cloud. I use super cloud I like meta cloud better because Something's happening Paul. It feels like there's this layer abstraction layer that the underlying complexity is hidden I think about open shift. I could buy I could get open shift for free Yeah, I mean I could and I could cobble together stitch together at 1315 dozens of different services and replicate But I don't I don't want that complexity. I want you to hide that complexity I want I'd rather spend money on your R&D than my Engineering so something's changing it feels like you know, I totally buy that. I mean, you know I'm going to try to not make this sound like a marketing thing because it's not fair enough, right? I mean I'm engineer at heart, you know that so okay I really look to what we're trying to do is we're building a hybrid multi Cloud I mean that we I look at us as a cloud provider Spanning the hybrid multi all the way out to the edge where we don't have the data centers in the back Like the cloud providers do and by that is you're seeing our products being consumed more like cloud services Because that's what our customers are demanding our products now can be bought out of the various marketplaces, etc You're seeing different business models from us So you're seeing committed spend for example like the cloud providers where a customer will buy so much Upfront and sort of just work it down. You're seeing different models on how they're consumed consumption based pricing These these are all things that came from the cloud providers and customers buying like that They now want that across their entire environment They don't want to buy differently on-premise or in one cloud and they don't want to develop differently They don't want to operate differently. They don't want to have to secure it differently security's the biggest thing with with our customers because hybrid's powerful But you no longer have the you know your security perimeter perimeters no longer the walls of your data center You know you're you're responsible as a CIO you're responsible for every app no matter where it's running If that's the breaking point that you're responsible for that. So that's why we've done things like you know We cried stack rocks We've we've built it into the container Kubernetes platform that spans those various footprints Because you no longer can just do perimeter security because the perimeter is is very very very large right now one of the thing on the multi-cloud hyperscales I Read that's never been defensive about public cloud You I think you look at the hundred billion dollars a year in CapEx spend That's a gift to the industry not only the entire IT industry But but the financial services companies and health care companies they can build their own hybrid clouds meta clouds super clouds Taking advantage of that, but they still need that connective tissue and that's where we we Welcome our customers to go to the public cloud Look it's good. It's a I said a long time ago. We said a long time. It's gonna be a hybrid Well, I should have said multi then but I said hybrid then it was gonna be a hybrid world It is and it doesn't matter if it's a 20 80 80 20 40 60 60 40 it's not gonna be a hundred percent anywhere Yeah, and and so in that in that definition. It's a hybrid multi-world I'll change the tune a little bit because I've been covering IBM for 40 years and seen a lot of acquisitions And see how they work and usually it follows the same path There's a commitment to leaving the acquire company alone and then over time that fades the company just becomes absorbed Same thing with red hat that it seems like they're very much committed to to leaving you alone At least they said that upon the acquisition. Have they followed through on that promise? I have to tell you IBM has followed through on every commitment. They've made made to us I mean I I owe it. I owe a lot of it to Arvind He was the architect of the deal, right? We've known each other for a long time. It's a great guy He he believes in it. It's not he's not just doing it that way because he thinks Something bad will happen if he doesn't he's doing it that way because he believes in that our ecosystem is what made us I mean it in I mean even here it's about the partners in the ecosystem if you look at what made rel People think what made red has a as a company was support right supports really important Small piece of the value proposition Life cycle supports certainly their life cycle a ten-year life cycle just came out of a Customer conference asking about the life cycle and can we extend it to 15 years? You know the ecosystem is probably the most important part of Of the overall value proposition and Arvind knows and IBM knows that you know We have to be neutral to be able to do everything the same for all of our Ecosystem partners is some that are IBM's competitors even so we were noticing this morning I mean aside from a brief mention of power PC and the IBM logo during at one point There was no mention of IBM during the keynote sessions this morning. Is that intentional or is that just no? No, it's not intentional. I mean, I think that's part of we have our strategy to drive and we're driving our strategy We we we IBM great partner We look at them as a partner just as we do our many other partners and we won't you know We wouldn't we wouldn't do something with our products For I with IBM that we wouldn't offer to our our entire ecosystem, but there is a difference now I don't know these numbers exactly you would know them, but but pre 2019 acquisition red hat It's just I think north of three billion in revenue growing it maybe 12% a year something like that Arvind, I mean we hear on the earnings calls 21% growth I think he's publicly said you're north of five billion dollars or now I don't know how much of that Consulting gets thrown in IBM likes the you know IBM math, but still it's a much bigger business And I wonder if you could share with us obviously you can't dig into the numbers, but Have you hired more people? I would imagine What's been different from that standpoint in terms of the accelerant to your yeah, we've been on the same hiring cycle percentage wise as we we always were I mean I think the best way to characterize the relationship in where they've helped is Arvin Arvin will say IBM can be opinionated on red hat, but not the other way around So so what that what that means is they had a lot of they had they had a container-based Linux platform, right? They they had all their they were their way of moving to the cloud was that when we came in They actually stopped that and they standardized on OpenShift across all their products We're now the vehicle that brings the blue software products to the hybrid cloud We are that vehicle that does it so I think that's that's how that's how they they look about I mean I know IBM Consulting I know I know they have a great relationship with Microsoft now, of course right and so so that's that's how to really look at it They're opinionated on us where we get not the other way around but but they're a great partner And even if we were two separate companies, we do be doing all the same things We're doing with them now what they do do for us can do for us is they open a lot of doors in many cases I mean IBM's been around for over a hundred years So in many cases they're in in the C-suite we may be in the C-suite But we may be one layer down one two layers down and something they they can help they help us get access And I think that's been a part of the growth as well as is them talking into their into into their Constituents look consulting's one of the fact if not the fastest growing part of their business So that's kind of the tip of the spear for application modernization But enough on IBM you said something in your keynote that was really interesting to me You didn't use the word hardware renaissance, but that my interpretation was you're expecting the next you know Several years to be a hardware renaissance. We certainly have done relationship with arm You mentioned Nvidia and Intel of course you've had relationships with Intel for a long time And we're seeing just the spate of new hardware Developments, you know this hardware matter. I'll ask you. Oh, yeah Oh, I mean the edge as I said you're going to see hardware innovation out in the edge Software innovation as well. You know the interesting part about the edge is that you know Obviously rel made red hat what we did with rel was We did a lot of engineering work to make every hardware architecture when when it was when the world was just standalone servers We made every hardware architect to just work out of the box, right? And we did that in such because with an open-source development model So embedded in our psyche and our development processes is working upstream bringing it downstream 10 years support All of that kind of thing so we lit up all that hardware now we go out to the edge It's a whole new different set of hardware innovation out at the edge We know how to do that we know how to we know how to make hardware innovation safe for the customer And so we're bringing full circle and you have containers embedded in in Linux and rel right now as well So we're actually with the edge bringing it all full circle back to what we've been doing for 20 plus years On the hardware side even as a big part of the world goes to containers and hybrid and in multi-cloud So that's why we're so excited about about about the edge, you know opportunity here That's that's a big part of where hybrid's going and when you guys talk about edge I mean, I know a lot of companies will talk about edge in the context of your retail location. Okay, that's fine That's cool. That's edge or telco that that's edge, but When you talk about an in-vehicle operating system, right? You know, that's to me the far edge and that's where it gets really interesting massive volumes Different architectures both hardware and software and a lot of the data May stay there. Maybe it doesn't even get persisted. Maybe some comes back to the club But that's a new ball game. Well, think about it, right? I mean if you listen, I think you read my talk this morning. How many changes are made in the Linux kernel, right? You're running in a car now, right from a safety perspective. You want to update that? I mean look Francis talked about you talked to Francis later as well. I mean, you know How many how many in in your iPhone world have Francis talked about this this morning? You know, they can they can bring you a whole new world with software updates the same in the car But you have to do it in such a way that you still stay with the safety protocols You're able to back things out things like that So it's open source but getting raw upstream open source and in managing itself yourself I just I'm sorry It takes a lot of experience to be able to be able to do those kinds of things. So it's cure That's insecure and that's what that's what's exciting about it. You look at the the telco world Look where the telco world came from in the telco world It was a hardware stack from the hardware firmware Operating system every service whether it was 9-1-1 or 4-1-1 was its own stack in the 4g Now it's all software now. It's all software all the way out to the cell tower So now you see so now you see our a vendors out there right as an application on as a container-based application Running out running in the base of a cell tower It's gonna be a little mini data center. Yeah, exactly because we're in our timers They're asking quickly because you've been a red hat a long time you you Architected a lot of the reason they're successful is your responsibility a lot of companies have tried to duplicate the red hat model The the service and support model nobody has succeeded Do you think anybody ever will or will red hat continue to be a unicorn in that respect? No, I think I think you will I think open source is making it into all different parts of technology now I have to tell you the reason why we were able to do is we stayed we stayed true to our roots We made a decision a long time ago that we weren't going to put a line Say everything below the line was open and above the line was closed. Sometimes it's hard Sometimes to get a differentiation with the competition. It can be hard But we've stayed true to that and I to this day I think that's the thing that's made us is never a confusion on if it's open or not So that forces us to build our business models around that as well But do you have a differentiated strategy talk about that? What's your what's your differentiation? Well, I mean with the cloud our differentiation is that common cloud platform across our differentiated strategy from an open source Perspective is to to make open source consumable and and it's even more important now because as Linux Linux is the base of everything It's not enough skills out there So even even a container platform like open source like open shift could you build your own certainly? Could you keep it updated? Could you keep it updated without breaking all the applications on top? Do you have an ecosystem around it? It's all of those things it was it was the support the the the hardening the ten-year of predictability the ecosystem That was that was that is the secret. I mean we even put the secret out as open. Yeah Free like a puppy as they say Paul thanks so much for coming back in the cubes. Great to see you face to face. Nice to see you guys Yeah, all right. Keep it right there Dave Vellante for Paul Gillan You're watching the cubes coverage of Red Hat Summit 2022 from Boston be right back