Forrester Consulting Total Economic Impact™ (TEI) study assesses the partner opportunity for Red Hat Enterprise Linux

The complex reality of hybrid cloud environments requires a stable and consistent foundation. Red Hat® Enterprise Linux® is the world’s leading paid Linux operating system¹ that provides a stable and flexible foundation to support hybrid cloud innovation. It enables customers to deploy applications and workloads faster with a consistent experience across datacenter, cloud, and edge environments. 

A Forrester Consulting Total Economic Impact™ (TEI) study commissioned by Red Hat, The Partner Opportunity For Red Hat Enterprise Linux², reports that for a composite partner organization representative of interviewed Red Hat partners, Red Hat Enterprise Linux created a revenue opportunity for partners of 3.5 times the subscription revenues through build, deployment, migration, and implementation services, as well as managed services. These opportunities in turn helped increase the strategic value that Red Hat partners provided to their customers.

As part of the study, Forrester interviewed 11 decision makers, from 8 different Red Hat partners, about the business and financial value they have achieved with Red Hat Enterprise Linux.

Financial results for Red Hat partners

There were three main revenue opportunities identified by the Red Hat partners who were interviewed:

1. The Forrester Consulting study reports Red Hat partners’ average revenue opportunity is 10% gross margin on selling Red Hat Enterprise Linux subscriptions. 
2. Red Hat partners interviewed by Forrester reported an average of 30% gross margin from consulting services opportunities such as building, deploying, migrating, and integrating Red Hat Enterprise Linux environments.
3. Red Hat partners, interviewed by Forrester, reported an average of 33% gross margin from managed services such as overseeing overall infrastructure health, patching, security and performance optimization, level 1 and 2 support, and scaling Red Hat Enterprise Linux to additional environments.

“The value that Red Hat brings to the table is huge. They are taking all that open source innovation and turning RHEL into something that is supportable and not a project for IT.” - Practice director, North America

Business benefits for Red Hat partners

In addition to the financial benefits, Red Hat partners, who were interviewed, experienced other key benefits.

• Deepened customer relationships - Red Hat partners reported using Red Hat Enterprise Linux tools and services enabled them to provide more strategic value to their customers, which deepened those customer relationships.
• Enabled opportunities to sell additional Red Hat products and services - Red Hat partners felt a major value of Red Hat Enterprise Linux was that it allowed them to sell and provide services for additional Red Hat products, specifically Red Hat Ansible® Automation Platform and Red Hat OpenShift®.
• Ongoing training and certification - Red Hat partners felt the wide range of technical training and certification programs offered by Red Hat helped them win more services business. Their customers want the reassurance of a fully certified staff to properly set up and maintain their environments.

“As a partner, Red Hat is an inroad for me. They’re the fastest-growing part of my business and the most strategic partner my company has. They allow me to be a lot more consultative with every customer interaction, and we can pull in whatever the customer needs — like RHEL, Ansible, and OpenShift. Because they are open solutions, I can have a relevant conversation regardless of if the customer is in the cloud or on-prem.” - Practice Director, North America

To learn more about the revenue opportunity partners could gain by offering a Red Hat Enterprise Linux practice, download the full study.

^{¹Source: Gartner, Marketshare: All Software Markets, Worldwide, 2020, April 2021.}

^{²Source: Forrester Consulting Total Economic Impact™ Study commissioned by Red Hat, The Partner Opportunity for Red Hat Enterprise Linux, June 2023.}