Interview: Red Hat CIO chalks data driven progress at open-source firm

Software makes the corporate world tick in the digital age and developing it is big business. The ‘open-source’ model, or collaborative software development from multiple, often unconnected sources, promotes a pooling of resources and a diverse design spectrum than any one company is capable of developing and sustaining over the long-term.

The concept is not new, though the term open-source itself was coined in 1998, and emergence of Linux operating system came to symbolise its free spirit. In an indication of where the concept is going – within a few of years of its arrival, the likes of Microsoft started describing Linux as their biggest threat.

In 2016, the concept has come a long way along with one of its biggest proponents – Red Hat (NYSE: RHT) – a company that has motored along the open-source development stream since infancy.

Nearing the tenth year of its listing on the New York Stock Exchange (NYSE), Red Hat is the open-source partner of a diverse array of players, from Dutch banks to Japenese watchmakers, Colombian airlines to Korean broadcasters, and all else in between, according to Lee Congdon, the company’s Chief Information Officer.

In its latest fiscal quarter, Red Hat posted headline revenue of $524m, up 15% on annualised basis or 21% in constant currency terms. Its quarterly subscription revenue of $457m rose 16% year-over-year or 22% on constant currency basis.

“Red Hat serves as a digital enabler in the world of e-commerce, and the onus of being its digital custodian falls to a team led by me. It is exciting to work for a company that’s in the business of enabling the new economy as the world’s leading open source outfit,” Congdon says.

“At Red Hat, I am both an innovator and a disruptor. It is the company’s job to identify areas of change for the benefit of its clients, and within the company it is my team’s job to bring about disruption in a constructive way to introduce technology for corporate benefit.”

The Red Hat CIO has six direct reports; senior members of his diverse team managing everything from devices to data, cyber risk to new projects.

“I have folks that have regional IT responsibility for APAC and EMEA as well as for North and South America. Such a structure enables us to scale and provide functions such as vendor management and finance interface to various departments including human resources.”

“Furthermore, I have a shared services organisation which is responsible for things like our collaboration tools, data and analytics, single-sign-on generation and technology implementation.”

Getting further into the nitty-gritty, Congdon’s department also has an IT enablement outfit which is essentially the service delivery division that runs the servers and their security.

“Then we have our development operations where we work hard to get things into production. Each internal division, including these two crucial departments, has a director who is responsible for the interface to each of the internal business units, and their project development and they all answer to me as part of a collaborative approach we adopt at Red Hat. Responsibilities are split both by remit and geography.”

Red Hat’s entire C-Suite executive team including its Chief Executive Officer, along with Congdon and his divisional directors, meet on a weekly basis. “If it is not face-to-face, as myself and colleagues are on the road practically every week, the conversation takes place via a dial-in or video link, and we make it a point to have a face-to-face meeting once a month at the very least.”

In the hot seat since 2007, the Red Hat CIO says his current assignment is among of the most unorthodox ones he has ever had. An illustrious career path that began at IBM in 1978 saw Congdon rise through the ranks leading to stints at Citibank, National Association of Securities Dealers, Nasdaq and Capital One, before joining hands and intellectual nous with his current employers.

“Every post I have held had its own unique charm. I still haven’t forgotten the general purpose minicomputer IBM used to hand out, the evolution of devices and platforms, and the way we used to do things and how remote they seem these days. Moving on to financial services was great education, and a stepping stone that led to Red Hat.”

“Businesses these days are moving very rapidly and my job is to make sure Red Hat’s IT team leads the rest of the business in terms of responding to technical and environmental change.”

In order to do that, Congdon says CIOs have to be a business executive first to shape the thinking of the inner technology executive. “Red Hat gives me that freedom. I think about reducing costs, increasing revenue and enabling my business partners and Red Hat’s customers, rather than a mere focus on solving IT problems.”

His role might well be internally focussed, but Congdon is a business executive first by his own admission. Of course, the work his team does to keep systems, processes running and introduction of new models goes with the territory. “You have to be able to do that as its bread and butter stuff. Where we really add value to Red Hat is by thinking about where we are going, and helping our business partners get there.”

“Often a concept developed by my team has external influences, and on occasion something we have worked on internally gets passed on to external clients if the concept is viable enough for broader deployment.”

Congdon opines that at the turn of 1990s, IT was an enabler in a sense that CIOs were digitising business processes for the first time and typically got significant cost savings.

“Part of difference then was that the IT people were the only ones who really had a broader comprehension of how technology works and how it would redefine processes. Nowadays everyone has an opinion, while it may or may not be true that they understand how the technology actually works.

“They certainly see the capabilities of consumer tools, capabilities of their personal devices, the burgeoning Internet of Things and more. People are much more informed about technology.”

Business executives who do not have effective IT support can do a lot more themselves than they used to be able to, and in parallel IT personnel have started getting more involved with headline business objectives, above and beyond the confines of their own department.

“Hence sound business leaders no longer view IT as a function, and IT leaders think in business terms not in technology terms these days – that’s the gradual paradigm shift in corporate thinking. If you look at Red Hat’s IT workforce, I agree that 70% of our job is to keep things running, but 30% is dedicated to core business transformation.”

Being a technology company means adoption of cloud computing and BYOD or ‘bring your own devices’ policy for employees comes naturally to Red Hat.

“We operate a private cloud and we are looking to expand. In 2013, we installed Red Hat’s open shift product externally on Amazon web services and made it available internally. We’ve got several hundred associates running multiple applications in that cloud.”

“More broadly speaking, OpenStack is our private data centre architecture. Probably over time our default architecture for our datacentres will be a private cloud technology based on OpenStack.”

As for BYOD, while company policy varies across various its global offices, it is something Red Hat embraced a long time ago. “For instance, in North America we have given employees a stipend and allowed them to purchase their own mobile devices for the last three years.”

“As an open-source company most of our products are built outside of our firewalls, and as a consequence people have always used their devices at Red Hat. Of course, we take appropriate precautions as we have data to protect and ensure that the devices are trusted. And increasingly we monitor the traffic on our network for anomalies, so that we are not cavalier about it.”

Typically a Red Hat associate is going to have a phone, tablet and a couple of laptops that use its applications in various ways. Since Red Hat uses a number of these, more than half of these applications, including back-office ones devised by ServiceNow – a Software as a Service (SaaS) partner of the company for well over five years – are outside of the company’s firewall.

“We have a common enterprise single sign-on service that we use for employees to access those applications. In many cases they are not even coming to our datacentres any longer, but going to external services. We see that as good thing and something to further enable BYOD.”

Congdon says such measures are not even about safeguarding the future. “It’s about managing the present realities! The digital world and within it the broader corporate world is in a state of inexorable change, and we are a part of that progress.”

Where Red Hat, its competitors and industry peers are heading to is a “data-driven world”, and “big data” extends well beyond mere business analytics.

“Red Hat is the largest corporate contributor to Linux. In 2012, we became the first $1bn open-source company, reaching $1.13bn in annual revenue during the full fiscal year. We believe that open, data-driven hybrid technology is the future of IT. The operating system for the competitive cloud computing world is open-source and very data-driven.”

Big data, can finally, really be described as such says the Red Hat CIO, with hybrid IT a reality in major organisations. “Ultimately, open technology gives you control over today’s trends and your own future – that’s a logic that Red Hat sells externally and my team follows internally. That's not just how sound software development happens, I’d say that’s how innovation happens.”

CV: Lee Congdon

2007 – Present: CIO, Red Hat
2011 – 2013: Board Member, Adaptivity
2003 – 2007: Managing Vice President, IT, Capital One
2001 – 2003: Senior Vice President, Strategic Initiatives, Nasdaq
1998 – 2000: Senior Vice President, Strategic Integration and Architecture, NASD
1994 – 1998: Director, Platform/Infrastructure and Head Architect, Citibank
1978 –1994: Multiple technology roles, IBM