The partner opportunity of Red Hat OpenShift Cloud Services

The Partner Business Opportunity for Red Hat® OpenShift® cloud services—an IDC study commissioned by Red Hat—shows that interviewed partners earned an average of $45.18 million in annual revenue, with a gross margin of 28%, and growth rates of nearly 40% by providing additional professional and management services for deals that included Red Hat OpenShift cloud services.

As an application platform, Red Hat OpenShift is the industry's leading hybrid cloud application platform powered by Kubernetes. It brings together tested and trusted services to reduce the friction of developing, modernizing, deploying, running, and managing applications—offering a consistent experience across public cloud, on-premise, hybrid cloud, or edge architecture.

​​Red Hat OpenShift cloud services is a fully managed, turnkey application platform based on Red Hat OpenShift that’s integrated into hyperscalers' consoles, letting partners build, deploy, and oversee Kubernetes applications for clients within public cloud environments. Partners can grow their businesses and increase revenue from professional services including migration/development, planning, implementation, and management—which extend beyond the public cloud.

The recent IDC study shows how Red Hat partners benefited from Red Hat OpenShift cloud services, including potential opportunities for increased revenue, expanding into new lines of services, growing their customer base, and strengthening their current book of business.  

As part of the study, IDC interviewed decision makers from 6 different Red Hat partners about the business and financial value they have achieved with Red Hat OpenShift cloud services.

Financial results for Red Hat partners

There were 5 main revenue opportunities identified by interviewed Red Hat partners:

1. Average annual revenue from Red Hat OpenShift cloud services is $45.18 million, with a gross margin of 28%.
2. A 41% average growth rate related to professional service opportunities on deals that included Red Hat OpenShift cloud services.
3. A 38% average gross margin from value-add professional services such as modernization, migration, and DevOps consulting work—beyond implementation and training. 
4. Red Hat partners selling managed services reported an average margin of 26% when supporting customers' hybrid cloud applications.
5. A 21% increase in professional services revenue attached to Red Hat OpenShift cloud services.

Business benefits for Red Hat partners

In addition to the financial benefits, Red Hat partners who were interviewed reported experiencing other key benefits:

1. Cross-sell opportunities: Red Hat OpenShift cloud services creates upsell and cross-sell opportunities for partner-provided professional and managed services.
2. Improved market differentiation: Partners noted the strong customer demand for  Red Hat OpenShift, the industry leading application platform, to run enterprise workloads across multiple clouds.
3. Accelerated customer base growth: Study participants also noted that engagements had low barriers to entry, and that it was easy to get customers up and running. Customers invested the savings toward other services such as application development, modernization, migration, and DevOps.
4. Strengthened business bookings: Partners reported their customers appreciated the additional services provided across their hybrid cloud instances.

To learn more about the partner revenue opportunities of Red Hat OpenShift cloud services, download the full study.

Source: IDC Business Value White Paper, sponsored by Red Hat, The Partner Business Opportunity for Red Hat OpenShift Cloud Services, #US52128324, June 2024.