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Red Hat to leverage India venture to tap West Asia

Moumita Bakshi Chatterjee

New Delhi , Feb. 10

LINUX and open source provider Red Hat Inc is planning to leverage its Indian operations to address the West Asia market, even as the company awaits the Foreign Investment Promotion Board (FIPB)'s nod to convert the India entity into a wholly-owned subsidiary by acquiring the balance 40 per cent stake held by the local partner.

"Currently, the India office also serves the neighbouring markets of Sri Lanka, Pakistan, Bangladesh and Nepal. We will soon be addressing the West Asiamarket also, from India. There is growth potential in the West Asia market, driven by an increase in demand for IT infrastructure," Mr Javed Tapia, President of Red Hat India, told Business Line on the sidelines of Linux Asia 2006.

Mr Tapia said the skill base of Red Hat India, and its knowledge of customer requirement could be leveraged to tap opportunities in a new geography, and added that the proposed structure for West Asia market would be crystallised by the first quarter of the next financial year. "These markets are similar in their needs and requirements," he said.

Mr Tapia, who holds 40 per cent stake in Red Hat India, said that Red Hat Inc's decision to convert the India entity into a 100 per cent subsidiary would enable it to grow to the next level. "In the last five years, the company has witnessed 100 per cent growth. The market has grown into a significant size and needs significant investments in terms of people and resources," he said.

He said the transaction is expected to be completed in the next 2-3 months after the required approvals from the Reserve Bank of India and FIPB are obtained.

He said Red Hat planned to invest $20 million in growing the Indian operations over the next 2-3 years. "India is the fastest growing market for us in Asia-Pacific region," he said, pegging the Linux market share in the country at five per cent for desktops and 20-25 per cent in case of servers.

Red Hat's Linux offerings are currently available in five languages — Hindi, Bengali, Gujarati, Punjabi and Tamil, and the company is looking at bringing eight more languages in the fold by the end of this calendar year. The company would also scale up its tech resources and support infrastructure in the country, he said.

"Overall, the India headcount will double to 200 during the coming 2-3 years," he added.

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