Expect to be a billion dollar co by next fiscal: Red Hat

James Whitehurst, CEO, Red Hat, expects the distribution vendor of open software Linux to be a billion dollar entity by the next fiscal year.

In his earlier role as chief operating officer at Delta Airlines, Whitehurst is credited with saving the airline from the brink of bankruptcy.

Here is a verbatim transcript of the exclusive interview with James Whitehurst on CNBC-TV18. Also see the accompanying video.

Q: How large can the free open source software industry get?

A: It depends on how you want to define large. If it is in terms of installed base, half the market over the next few years would be open source. In terms of revenues, open source de-cost software, it's a more efficient way to develop and distribute software. We typically generate about 10 times our market share as we do revenue share.

Q: What does Red Hat do? Would I be defining it correctly if I say you re-package freeware and then commercialize it?

A: We are involved in developing free software as well. I am often asked, how can a company make money selling free software? What's important to recognize is that the recent Red Hats has been successful because we don't actually sell software. The software itself is functionally free. The source code is available. But an enterprise is not just implementing features and functionality, they need to implement a solution which needs to last for years. When the New York stock exchange which runs on Red Hat enterprise Linux spent millions of dollars to develop their exchange, they want to make sure that it works for the next 5-10 years.

Q: In a sense, your brand is setting a certain standard for a software, so it kind of builds trust in the guy buying it?

A: Not only trust, we certify and test the software and ensure that there are no license issues. We make sure that we fix any related bug. We also agree that we are going to continue to keep it stable for 10 years. So, when a new faster chip comes out five years from now, we make sure that we will update the software to take advantage of that.