Red Hat looks to hand direct business to VARs

Open source vendor aims to reach 70:30 split between channel and direct sales

Open source vendor Red Hat has vowed to hand over more of its direct business to partners as it looks to become more channel friendly.

On an earnings call last night, Red Hat's executive vice president of products and technology Paul Cormier said in Q4, 68 per cent of its global bookings were made through the channel, and the rest from its direct sales team.

He said the figure was "similar" to its channel-direct mix for the full year too, but said he hopes to increase this in the near future.

"[We are] moving closer to our multi-year goal of a 70 per cent, 30 per cent split of channel and direct sales," he said on the call, which was transcribed by Seeking Alpha.

When the company was questioned further on its go-to-market strategy, Red Hat's executive vice president Charlie Peters admitted the company hands over new products to the direct team first before the channel gets a look-in.

"It's been starting out mostly direct [to make] sure our direct guys have a good understanding of the technology and know-how to sell it," he said. "And then from that point [we] begin to add channel partners in the various technology. In some cases it may be large SIs and in some cases it may be existing OEMs who are helping with another technology, for example."

But in the future, the channel is more likely to get its hands on new tech first, he added.

"I would say that as products mature, we are more likely to go to a channel model and that's exactly the way we're pursuing it," he said.

For the three months to 28 February, net profit at Red Hat grew 5.8 per cent annually to $47.7m (£32.02m) on sales which over the same period rose 15.9 per cent to $463.9m.

The majority – 63 per cent – of bookings came from the Americas, a quarter of them were made in EMEA and 12 per cent were generated in the Asia-Pacific market.