Top business-to-business software firm eyes expansion in handling large data sets


When people generally think of open-source platforms in Korea, Google’s Android immediately comes to mind due to the wide use of smartphones and tablet PCs in the business-to-consumer space.

But in the business-to-business world, U.S.-headquartered Red Hat provides the world’s leading open-source operating systems for enterprises’ data-processing servers.

Working “behind the scenes,” it’s unknown to the general public. James Oh, general manager of Red Hat Korea, simply described its core business as “the Windows for enterprise servers.”

“When you turn on your PCs, for example, you will see Windows,” Oh told The Korea Herald, while humming the tune of Windows starting up.

“When enterprises turn on their servers, they will see (Red Hat’s) Linux operating system.”

There’s still growth opportunity in its field, he says, as a majority of Korean industries, especially the financial services sector, still use the closed-source Unix system due to their “conservative” nature.

The Linux open-source operating system accounts for 70 percent of server markets globally, as opposed to 30 percent in Korea where Unix takes up 70 percent, he noted.

“Korea has been a bit conservative, but now we can see this changing” with the open-source market potential growing further in the country, reaching about $200 million, Oh said.

With the Korean government promoting this environment and setting high goals for the software industry to be one of its growth drivers, Red Hat is taking this opportunity to tap customers in the securities and investment banking sector, and help them to migrate to the open-source platform.

Its main Korean clients at the moment are telecommunications, conglomerates and government agencies such as SK Telecom, POSCO and the Ministry of Public Administration and Security.

In global financial markets, the NYSE Euronext is one of its customers.

“Basically, customers are free and can be flexible to use any applications in the open-source, instead of being stuck to only using a specific vendor’s proprietary software,” Oh said.

This means that corporate users can access some 9,000 certified applications, connected via middleware, or the “intelligent gateway” that bridges different apps. This could be similar to consumers being able to access various apps on Android-based smart devices, Oh explained.

Big data ― massive banks of information ― is another area Red Hat aims to put itself on the Korean IT map with as the leading B2B applications provider, with the emergence of cloud computing and virtualization.

The acquisition of Gluster, a storage software firm, and Qumranet, a virtualization solutions developer, will be able to boost Red Hat’s presence in Korea’s big data industry, he noted.

In addition, the $10 billion market cap Red Hat seeks to boost partnerships with IBM, HP, Cisco and Dell, which provide enterprise servers embedded with its OS.

Korea is one of the top five growing markets for Red Hat, which saw its revenue increase over the past two years in the country since Oh joined its subsidiary based in Seoul. Red Hat posted sales of $1.13 billion for fiscal year ending Feb. 29, joining the billion-dollar software club.

The only way to maintain this momentum for the Korean subsidiary, Oh emphasized, is “to treat customers how I would like to be treated ... with respect and honesty,” as software is still a “people” business.

By Park Hyong-ki (hkp@heraldcorp.com)