Matthew J. Szulik, CEO, Red Hat Software

This March, you were reported to have had dinner with Microsoft chief executive Steve Ballmer at a New York restaurant. What did you talk about?

That article has been a source of great conjuncture. Red Hat and Microsoft have engaged each other numerous times in the last 12 months, largely initiated by customers. Both companies have to ensure interoperability within the corporate IT environment.

Is Microsoft changing its ways?

From a business-practices standpoint, Microsoft continues to be an aggressive company. If we have noticed a change, it's that Linux and open source have a footprint in enterprise computing that is driving dialogue.

Is using Red Hat really more economical than using Microsoft? We've had IT managers price out server licenses for Red Hat versus Microsoft. Red Hat comes back just as expensive, sometimes more so.

There are some technical inaccuracies in that description. To start with, we don't license software; we sell annual subscriptions. Maintenance, service and support are included in the purchase price of our subscription, as compared to software licenses sold by most competitors, where maintenance is extra. That's a basic difference.

But where customers truly see the value is in total operating cost. As customers deploy more and more systems, they have a decreased dependency on human labor to manage them. There's also a decreased need for security implementations because of the high degree of security that Linux and open source can bring.

Still, some users have questioned the support structure for Red Hat Enterprise Linux. Have you considered a per-call option for companies that don't need a blanket support contract?

When a customer purchases a subscription for Red Hat, it's not just the 1-800-break-and-fix that they're receiving. That was an old business of Red Hat back in 1998. Part of what we are marketing and selling to the customer is a high degree of integration of the software with the service paradigm, where the customer is receiving a steady stream of technologies that we have been able to put through our certification and testing processes.What is Red Hat's road map for virtualization and Xen?

We're excited about the benefit to the customer in and around virtualization. But Xen and the virtualization engine is only a component of the solution. Customers are going to have to change work processes. They're going to have to deal with security and authentication. They're going to need the tools and the management infrastructure to implement the benefits of virtualization across their computing paradigm.

We don't think that's a product-driven solution. We think that it will increasingly create challenge and opportunity for both tools for core virtualization platform and management services to deliver the full benefits to the customer. The good news is that Fedora Core 5 and the upcoming Fedora Core 6 in September will give customers a great preview of the product component.

How will GPL 3 affect Red Hat and Red Hat Enterprise Linux?

There's been a lot of debate publicly regarding GPL 3, including digital rights management. We have continued to defer to Eben Moglen [general counsel for the Free Software Foundation] and the Free Software Foundation and EFF [Electronic Frontier Foundation], respectively. We are stepping back and observing right now--and hopefully becoming a good, attentive listener.• Podcast: right click to download the complete interview

• Get more NWC Podcasts