Red Clouds at Night? Red Hat’s China Plans..

So… Red Hat is looking to expand its operations – especially ‘cloud’ related – in China, now..

This may be a prudent move, but the company should not forget that China has already developed its own domestic Linux business over several years..   I remember Red Flag Linux, from the early-2000s..

Another (obvious) factor to take into consideration is the country’s somewhat-relaxed attitude to ‘replication of others’ technologies’..   This becomes far more of a challenge, when the underlying ‘technology’ is – by its very nature – freely available to replicate, thanks to the GPL..    And.. where did Red Flag Linux (and Mandrake, and Conectiva, etc. etc..) come from, originally!

‘Expanding into China’ may seem to some to be an obvious next step, given the less-than-stellar business outlook in the US and Europe, but there is a danger that you could put your most valuable tangible assets at risk, in the process..

However…  The reason that Red Hat may be willing to take this apparent risk, is that they are well aware that their business revenue is largely services based, with support subscriptions and licenses and other deliverables apart from the ‘mere software’..     There is an increasing amount of competition in the areas where Red Hat is seeking to ‘add value’ – in virtualisation, and cloud-related services – and if the company can take advantage of the pool of highly-educated development talent in China, then they may be in a position to be faster-to-innovate than their competitors in these areas, which would produce enormous potential benefits..

© Robert Gadsdon, 2012

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