Red Hat poised for $200 mn topline in India

US-based enterprise open-source provider Red Hat, which was acquired by IBM in 2019 for approximately $35 billion, views India as one of the fastest-growing markets globally. The company's revenue in India has steadily increased, nearly doubling over the last four years.

Even as annual growth rate has settled in the early to mid-teens from 20% plus in the immediate past, barring the first year under the pandemic, the firm is set to come close to the milestone of $200 million (around ₹1,700 crore) in revenues from India in the current financial year, Techcircle has gathered.

The firm had crossed ₹1,500 crore in revenue last year, though it has seen a sharp moderation in its profit metrics, as per information collated by VCCEdge, a financial data research platform and a sister unit of Techcircle.

Despite a dip in profit, Red Hat is optimistic about India's expanding enterprise base and technological innovation. Marshal Correia, Vice President and General Manager for India and South Asia, told TechCircle that the company's growth reflects the transformative power of open-source innovation and its alignment with 'Digital India' initiative.

“The rapid adoption of digital technologies, fuelled by affordable connectivity and a vibrant startup ecosystem, presents significant opportunities across various sectors. Post-pandemic, there has been increased demand for hybrid cloud solutions and Artificial Intelligence (AI)-driven innovation, reinforcing Red Hat's commitment to open-source technologies for digital transformation,” he said.

Correia further noted that Indian customers are leveraging open source for transformative change, showcasing agility and resilience while addressing unique challenges like infrastructure modernisation and cost efficiency.

Red Hat has a long history in India, establishing its research and development centre in Pune in the early 2000s, which has grown from 10 employees to over 2,000. The company now has offices in Bengaluru, New Delhi, Mumbai, and Kolkata, with a global headcount of around 20,000.

Red Hat India has always collaborated with local companies to promote open-source technology adoption in government and education. By 2006, it had a distribution network of over 70 partners across 27 cities.

Even today, the company maintains a strong engineering presence and has contributed to several Digital India initiatives, including mission-critical projects like the Employee Provident Fund (EPFO), Goods & Services Tax Network (GSTN), and Indian Railway Catering and Tourism Corporation (IRCTC).

As AI tools evolve, Red Hat has launched Red Hat Enterprise Linux AI (RHEL AI) to streamline the development and deployment of generative AI models. The introduction of Ansible Lightspeed provides generative AI services to automate the creation of Ansible playbooks through natural language processing.

Correia emphasised that the company's main focus is to democratise AI access, aligning with India's approach. By integrating AI across its offerings, including Red Hat OpenShift AI and RHEL AI, the company aims to empower Indian enterprises to unlock the potential of open source, underscoring the pivotal role of the technology in driving innovation and digital transformation.

A new IBM report published on January 4, shows more companies are turning to open-source tools for AI, with many already seeing financial benefits. Eighty-five per cent of the companies it surveyed globally are making progress on their AI plans for 2024.  Also, open-source tools provide the flexibility and cost savings that traditional systems can’t match, as the study shows that around 51% of businesses using open-source tools report positive returns, compared to 41% of those relying on other types of software.