Red Hat CEO: Opportunity Lies in Emerging Markets

Red Hat sells services that support open source software , or software whose underlying code is shared freely by professionals and amateurs worldwide. Red Hat's business relies on servicing versions of that software.

"While there is still plenty of opportunity in the U.S., outside of the U.S. is exploding," Whitehurst said in an interview.

Open Source Foothold

Whitehurst, who Red Hat recruited from Delta Air Lines (NYSE: DAL) four months ago, said open source software is increasingly popular in developing nations because it costs less to install and maintain than Microsoft's (Nasdaq: MSFT) proprietary Windows operating system.

"Emerging economies tend to have more directive governments that are much more interested in open source from a public policy perspective than in developed countries," he noted.

He recently met with top government officials in Russia, Poland, Belarus, Singapore, China and other nations. He said he traveled at least 100,000 miles in his first three months on the job. Whitehurst replaced former CEO Matthew Szulik, who remains as chairman of the Raleigh, N.C., company.

Issue of Control

In the developing world, "there's a feeling of 'why would we ever go with command-and-control, proprietary software,'" he said. "Open source has demonstrated its ability to innovate more quickly and cheaply."

As for Red Hat's JBoss middleware division, which makes software that ties together different business applications, Whitehurst said he expects sales will expand more in the United States and Western Europe, where the product appeals to business customers with more sophisticated needs.

He added that Red Hat's U.S. sales are so far unaffected by the housing-related slowdown and credit squeeze.

"There seems to be two different worlds: New York and the rest of the economy," he said.