 Welcome back to theCUBE's coverage of Red Hat Summit 2021 virtual. John Furrier, your host of theCUBE. We have Paul Coleman here who's here. It's the president and CEO of Red Hat, CUBE alumni. Paul, always great to have you on. Leader of Red Hat now president and CEO for a year. I think about a year now we're looking at under your belt now part of IBM. Great to see you. You too, nice to see you again, John. So we've talked many times on theCUBE and now it's kind of playing out in real time. The software world with open source has gone mainstream. The conversation was moved to the cloud. Okay, people moved to the cloud, cloud native emerges. DevOps been around for a while, but now the conversation is cloud for the enterprise. That's, and the enterprise is a tough world. You got to, it's complicated. There's a lot of legacy, there's a lot of value, and you want the new stuff. This is what the conversation is now. It's shifted to I got cloud, it's hybrid. What's your reaction to that? Well, you know, it really is, as you say, it's complicated, but it's evolving in really, really fast. I mean, I think you remember, we've been here a lot. You first remember, first software was eating the world and open source software was eating the world and then every company is becoming a software company, all true, but that evolution continues today with the proliferation of hybrid cloud environments that it encompasses everything from data centers to public cloud services to, and even now we'll talk about two far-flung edge deployments. That's all now part of the cloud. I mean, this is all what makes up hybrid. I like to always say that hybrid really is the new data centers, but now CIOs and IT leaders, they need to reconsider what their roles, what their role here is. And the way we look at it is every CIO now needs to be a cloud operator because hybrid is what their environment is now today that used to be all in their data center. So, but one of the things this really makes choice even more important for CIO and IT leaders, they need to address specific needs, not only to the organization, but even as they change and evolve in this because it really is a dynamic environment. I mean, think about it. I just mentioned edge and how important that is to the CIOs. We weren't even talking about that two years ago. So there's not a single answer here, right? And, you know, as there wasn't a single answer when it was all in one building or in one data center, but now it's even more complex. So we need to enable really a new wave of cloud operators here with technologies that can be deployed as cloud services as well as on-premises. I mean, we'll talk more about this too, but we'll talk about this at the summit. We've talked about this at the summit. Cloud services become really important, especially managed services, for example, because we're so complex, the hybrid brings so much power, but it is complex. You know, CIOs need help with this. They need help managing this now. And so that's really where a lot of our focus is today. It's interesting, you say there's no single answer. I would agree with you because as now you can actually do a lot more customization with cloud and hybrid. I think there's a general sentiment and directionally correct answer in the industry is that hybrid is operating model. And I think you guys have a whole division of SREs. You know, Google talks about this all the time in their cloud site reliability engineers. And I think you're seeing that in educational institutions, which we'll talk about, but I think this idea of cloud scale as the new IT, and you mentioned hybrids and new data center, you know, I don't want to offend my IT friends out there, but they're kind of all realizing it too, that if they don't understand how to operate cloud scale, they'll be irrelevant. And they understand that their jobs are not just provisioning storage networking and servers. Those are now involved in a hybrid architecture. And by the way, there is no one recipe. It's dependent. Each enterprise can have its own set of architecture based on their workloads. Again, so I buy that's no single answer, but there is hybrid. And I think it's pretty well understood. I mean, do you agree with that? I absolutely agree with that, but let's take a look at, let's unpack it a little bit and take a look at the building blocks a bit, right? You know, we talked about open sources, what's driving all of this now. And everything we're talking about here is built in and around Linux. And it was only possible because Linux was so open, so available, and became so powerful. That's now been the platform that all this new innovation has built around. I mean, I oftentimes say, and it's true, the cloud just wouldn't be here, had Linux not only made its way in the open source development environment, but made its way into the enterprise to enable it to, you know, companies like us that make it enterprise ready, secure, et cetera. So I think that's really an important thing to understand here. So when you talk about skills that the CIOs need, certainly SRE skills, operation skills, et cetera, but they also need Linux skills and even open source skills. So I think that's important. Everything that's coming down the road in this space is open source based and built in and around Linux. Things like AI, quantum computing, autonomous vehicles, IoT and out to the edge, all built on a foundation of Linux and open source. So we see it in the enterprise everywhere now. I mean, the survey, we did a survey out there and looking at the survey of CIOs out there, open is predominant out there, Linux is predominant out there and hybrid is predominant and growing in a pretty big click every year. You know, Paul, I want to get your reaction to something because this is maybe kind of a dot connecting moment for me because I want to get your thoughts on this because it's a pattern I'm seeing emerging now multiple times. And usually I thought this was kind of a one off but I'm starting to see it. Well, I want to get your thoughts on this. You guys have been super successful with open source in the enterprise, super successful over decades building a community and an ecosystem. Now with open source with cloud native specifically we're seeing end users participating more in the contribution. I mean, it starts out with the hyperscalers but now you're seeing kind of, I would call general purpose mainstream enterprises contributing projects. Not necessarily their expertise but they've been participating in taking the goodness of open source and bringing that into their enterprise and obviously relying on you guys as well. But now I'm starting to see the pattern where people are relying on you to bring your community to them and they merge their communities with you guys and being kind of a steward there. Is that a pattern? Do you see that evolving? Because we've heard that on multiple interviews on theCUBE where we've heard end users say we love the Red Hat ecosystem and that seems to be more and more about they want to be building their ecosystem. So you did it for yourselves, you did it for the industry. Now enterprises want this service. Is this a pattern and what's your reaction to that? Can you tell? Yeah, it actually is a pattern because and it's actually one of the reasons why innovation is moving so quickly right now. I mean, as I just said, this whole area here and infrastructure and cloud and developer environments hybrid included it's all built in and around Linux and in the past what's happened and driven by open source development and the past would happen. Look at the old fashioned way, right? Where a company like us would be and a software company, not like us but any old software company would be in their stovepipe talking to their customers getting their requirements and then bringing those requirements back from the customer base and then trying to work that into their products over time get that back out to the customer to test it and try it, see does it work? That's probably a five year, that's probably a five year journey for big requirements, for big change requirements. You look at now with actually end users now participating in upstream development, they're building their requirements into that upstream which is our development environment and actually that's what feeds our products and so we've cut out the middle man if you will completely in there. Now when we're building those requirements into our future R&D work in the upstream and then we bring that down into a product back into their enterprise for them to use in production. So it cuts out years of time for that innovation to get from concept to building to productizing to production. And I think, John, that's one of the big reasons why that customer base participating is one of the big reason why we're seeing innovation move like we've never seen it before in the enterprise which in the old days, that was a stodgy place where they didn't want to move very quickly. Yeah, and the value is there. I mean, I think it's clear with the pandemic, we're gonna get to this towards the last talking track here but with the pandemic, I think it's pretty clear what the value is and the speed to capture opportunities and growth. I think enterprises are realizing that and I think the power of the ecosystem is a modern error kind of phenomenon that is now kind of showing its value and clearly in the market. And I think people who harness communities and ecosystems, not try to fork them but connect them and intersect them and kind of play it well together. Again, this is an open source concept, kind of reimagine. So we'll keep an eye on that. So I want to get to your comment in the keynote. You mentioned it at the top here. Every CIO, it has to be a cloud operator. That reminds me of all the startups and all the positioning statements. Every company needs to be a software company. Every company needs to be a media company. Every company needs to be a cloud operator. So I love that. What does it mean? Because I could say, hey, Paul, I have a cloud. I'm working on Amazon. Or is that it? Or wait a minute, Azure's got, I got 365 over here and I'm using BigQuery over here. I might use Oracle over here. I mean, all these multi-cloud conversations. So it's confusing. Yeah, tell me what it means. If you look at it, we were really one of the first ones to really build around this hybrid concept. And the reason why we were one of the first ones is because what did Amazon hit the world 12 or 13 years ago or something like that? They were the first major cloud. And at the time, the narrative was that every application was going to move to the cloud tomorrow. Well, because as I said earlier, everything is built in and around open source and Linux, we were very involved with our customers as they tried to move those first applications to the cloud. So certainly there's a lot of value in moving to the cloud, but our customers quickly realized with us helping them quickly realized that, you know what? This is great, but not every application suited for the cloud, for any cloud, but also I may want to run multiple clouds because another cloud provider over here might have a better service than this particular service over here, vice versa. And so we were in the middle of that. So one of the decisions we made so seven or eight years ago, everything we did in that last seven or eight years around the portfolio, whether it was build new products, M&A, requiring new companies, et cetera, was built around that hybrid portfolio. What that means is a common platform that sits both on-premise in bare metal machines, virtual machines, private clouds on-premise, multiple clouds across in the enterprise, that common platform so that developers, operators and the security people have that common platform to build with. Because just like in Linux, even though they're all derived from open source upstream, they're all different. They all make different choices in how they're going to configure themselves. So that's important. So now we're out there with these multiple clouds. In one of our surveys we see our CIOs telling us now that they're using on the average, I think six clouds today and they expect that to go to eight to 10 over the next three to five years. So how are they going to manage that? How are they going to secure that? How are their operations people going to operate with that? That's all the things that we've been working on over the last number of years. So from that common platform, which is sort of the basis, which is OpenShift to underneath it, which is the Linux operating system, which is RHEL, that spans all those footprints that I talked about. Then also you look at what one of the latest trends is as well as managed services. Because what customers are now telling us is, okay, I've got this environment that this hybrid is now my data center. It means I have to worry about these apps all in different footprints. I want the platform to act like a cloud. In some cases, I don't want to even manage it. I want you to manage it for me because for many reasons, I want great uptime. I might not have the right skill sets in my IT organization. And so I want you to manage it. And so that's where we develop managed services. And that's where we have, as I said, a large group today, a large SRE group that's providing those managed services no matter where our platform runs for our customers. Also what I talked about in my keynote today is that to support that thought process is that we're doing a lot of research in this. And so on a typical computer science research world of the past, you might really be into the real computer science of research. We, with the consortium around Mass Open Cloud with Boston University, MIT, Harvard, Northeastern with this consortium, we're running Mass Open Cloud on all red hat with the collaboration of these universities. And we're really focusing on the SRE aspect of it. What do we need to manage it? What do we need around automation to manage it? What do we need around AI to manage it? What do we need for tools to manage it? And this really goes down to what I've slowly briefly said in the beginning is that every CIO and IT the executive now has to be their own cloud operator because they are effectively stitching all these disparate clouds together. So that's where a big part of our focus takes us all the way from upstream development to product to the research we're doing for the next three to five plus years. You know, I got to say, the hybrid cloud is a new data center which is implying IT and cloud operators or CXOs. And CIO is interesting because it's validated by McKinsey's recent report that came out that said there's a trillion dollars of untapped value in one retrofitting existing infrastructure and operations and two net new use cases that the cloud enables. So there's clearly now two categories of value proposition that businesses are facing. One is, you know, kind of take care of the existing and then also bring in the new that cloud enables. So, you know, I think that's really key and that will drive the business leaders to force IT, if you will, to be agile and adaptive to that. So totally agree on that. I love this open cloud initiative. You mentioned the mass open cloud which I know is kind of like this beanpot for, you know, techies for people who know what that means. It's in the Boston area, these institutions. This is going to be a training and an opportunity to train this next generation. And if you take it to the next level, cybersecurity is also in this kind of net new novelty interdisciplinary component. So you got engineering, which is like DevOps engineering and then systems engineering and computer science intersecting together with kind of this data discipline. So it hits cybersecurity, which is a board level conversation. It hits the new business model opportunities, which is a driver. This is new. This is, there's no pre-existing curriculum. What, how do you explain that to heads of the departments and the deans of these institutions saying, you know, no, it's an engineering thing. No, it's computer science thing. No, it's a business school thing with data science. What's your, what's your conversation with folks in the industry when you say, this is a different thing? You know, the university, you know, the university is getting, it was actually one of the first things. This is, you know, what you'll see, you know, I talked to Dr. Bob Brown from President BU earlier in an interview. And this is what we imagined with them early on. And even they've brought those disciplines together now in what they call a Harry Institute where they bring data, computer science, engineering, as you say, and now even operations. It's almost like, you know, systems engineering on steroids. It's a, it's a really big spanning system. And so, so they, the university is starting to understand that's why these universities in the consortium, that's why we're working here. But, but also, you know, the, the industry's kind of learning it the hard way, because now that they get some of their developers starting to move some of their application developments out into one, maybe two clouds and having the, now they have to figure out how they're going to do all those things that we talked about, develop, secure, operate it. So they're, they're learning the hard way that this is the new discipline because that's reality. I also think that, you know, as I said, like anything in tech, we always say this is going to happen tomorrow. I also think, like I said, when, when cloud first came, came out, everybody's saying, I'm moving every app to the cloud tomorrow. We even had customers that bought into that said, we're moving, going full bore. But they realized once they get into it, it wasn't practical. So don't take me wrong, cloud brings a ton of value here. But from a practical perspective, it's going to be some apps and across many clouds. And, and so now they're having to deal with the IT execs and the CIOs having to deal with it. So they're, they're learning really fast because of the reality that they have to deal with. Now, having said all that too, it also brings up why managed services you're seeing is so popular right now because as that's moving so fast, they just don't have the skills necessary in many cases to really operate and run in this, in this type of environment. It brings so much power, but the skills aren't necessarily there in the industry. So that, now you see the connection between the industry where we sit in and even the university now looking at this whole big problem as, as you said, John, actually a new discipline. Yeah, I think that I think, and I think one final leg of the third three leg of stool is at the business schools, because when you think about systems programming, you mentioned that. And, you know, I love to go back in history and look at the history of operating systems. And, you know, Paul, we've talked this in the past and you guys know a lot about operating systems from a technology standpoint. It's not just about a productivity suite for a user or a department with a system. It's a company that needs to be programmed. So when people want to globally operate their business, that's software defined. This isn't now, and this is now happening, right? So the new leaders in these companies that want to run these global companies at scale and operate them, just like operating the business, not necessarily operating a tech or shiny new toy, have to build the operating system for the business. To me, I think that's where I see IBM looking at cloud differently and saying, hey, this is an operating system under the covers for the business. The applications are multi-fold from, you know, an application for productivity to an edge device, industrial or consumer, user, work at home. I mean, it's a plethora of applications. What's your reaction to that? And you see the same thing? I mean, frankly, I think this is an area that a lot of the infrastructure players missed in the past. And I think this is what IBM saw with bringing us in as well. It's all about the application. You know, I said earlier that, you know, we said every company was a software company is true. And so that means that companies are running their businesses on these applications. So it's all about the app. And I think a lot of infrastructure companies missed that. And so with hybrid now you have that ability to run the app wherever it makes the most sense for a whole host of reasons. And so now comes the complexity of all of that. I think IBM was bringing us in, saw that hybrid was maybe as big, if not a bigger opportunity than cloud itself because of the complexity it's going to bring. The power it's going to bring, but also the complexity it's going to bring. I see that's why you see Arvind, I sort of doubling down the entire IBM company on hybrid is services that are going to be really important here that they provide. Is applications on top that are going to be really important but that have to be architected in such a way that they can run in a hybrid environment. And then finally there's all the infrastructure and tools and development pieces that we bring to the table. So yeah, I think Arvind really, really understood that as they made a decision to bring Red Hat in. I talked to Accenture all the time and they also have this kind of concept of refactoring and reprogramming your business. It's not a holistic view. This is kind of what's happening. So my final question for you is as that becomes software enabled and programmed if you will with applications, the business with many different subsystems in there. A lot of companies now looking at the light at the end of the tunnel with the pandemic and they're seeing vaccines coming out. Some say vaccines will be pretty much everywhere. Everyone over 12 by the fall. So we're back to real life. There's going to be a pullback of some projects and doubling down on others as you mentioned with Arvind's doing and starting to see hybrid. As companies come out of the pandemic they're all jockeying to make sure that they've either done their work to refactor or reposition, reprogram their business and be set up for net new opportunities. What do you see as a growth model or growth opportunities for companies who want to come out with a growth strategy out of the gate of the pandemic? What's your thoughts? Well, I mean, I think you have to plan for, companies have to plan for your workforce to be anywhere. But in order to be anywhere and to be productive you need services like we're on right now, for example but you need the infrastructure to be able to do that. You need a way for your customers if you buy the fact that every company is a software company and you're running a business through their applications need a way for your customers to be able to interact with you anywhere from where they are anywhere in a real time way. And so I think that's why from our perspective things like that we're pushing a lot on the edge. Now that's why you're seeing the hybrid cloud move all the way out into the edge. And you can see it in every vertical. You know, in the telco space the edge means you got to do, you have data and compute that needs to be done on the cell tower. In the manufacturing world you have this data and compute that needs to be done on factory floor in the retail vertical. We see the edge really being significant in all these verticals. But that edge is now extends that hybrid data center that we've been talking so much about. So even though you have all these edge devices way out there on the edge it's a critical part of the business. So you have to have your developers need to be able to develop for it. You need to secure it. You need to operate it and manage it. So now, in a very short period of time hybrids taken on another dimension bringing you out to all these points on the edge which is the same but slightly different in every vertical. Now comes complexity. And that's why automation is so important because with that power comes complexity but it's going to take automation to keep it all running. Paul, great insight. Thanks for coming on theCUBE. Open innovation out in the open with you guys again continuing and the focus of the evolution of software in the cloud with enterprise IT. Clearly a lot of innovation and your contribution to academia and the mass open cloud and all the open cloud initiatives phenomenal. World's going open source and continues, continues. It doesn't stop. The operating system of business is coming and you guys are well positioned. Thanks for coming on. Thanks again John, always a pleasure. Okay, Paul Carmiere, President and CEO of Red Hat here on theCUBE. I'm John Furrier, your host. Thanks for watching.