We just can’t get enough Red Hat! After talking to Stefanie Chiras in S02 E01, we turn again to what’s now the core of IBM, the open-source juggernaut of RHEL and chums – here represented by Ben Henshall, General Manager for the Southeast Asia market.
The financial institutions of the area just about define conservatism, but Red Hat and open-source are changing the face of the industry: open, interoperable, fast, safe & secure, the solutions Red Hat is offering just wouldn’t be available in the proprietary world.
We also talk about Asia’s Generation Z, the expectation that stuff “just works”, and how China may not be the massive influence we in the West sometimes think it might be.
An Australian by birth, Ben’s lived in Singapore for 94 years – those are dog/cat/IT years, by the way – and spent most of that time at Red Hat. Listen out for the insights!
Full transcript available.
Joe Green (Host): Hello there, welcome to series two, episode six of the Tech Means Business podcast. Over the course of these podcasts, I’m talking to people who are at the forefront of technology in business settings. Maybe they’re part of a vending operation or an organization that’s pushing the boundaries of what’s possible with technology.
There are of course, very few businesses in the world today that aren’t in some way digital businesses. So that’s a broad subject area as you can imagine. Therefore, what we try and do is carve out specific subject areas and source people in that particular niche who can help and guide us through the issues that face them, our users and their organizations.
Now, back at the beginning of series two, we spoke exclusively to Stephanie Chiras of Red Hat, the general manager the RHEL Business Unit: RHEL being, of course, Red Hat Enterprise Linux, the operating system that powers many enterprise desktops and servers right across the world.
Today we return to Red Hat, but this time in conversation with Ben Henshall. He’s the general manager for Southeast Asian markets at Red Hat. And he’s based in Singapore. We’ll be discussing the challenges facing business in the APAC (the Asia Pacific region that is), with particular reference to open-source software, cloud services, FinTech, especially business practices, and attitudes, and much else besides.
But first, welcome, Ben to the Tech Means Business podcast! And, as has come to be something of a tradition around these parts, please give us a little potted history of your career, a biography, an autobiography, I suppose, and how you ended up where you are at Red Hat today.
Ben Henshall (Guest): Sure, Joe, thanks very much. Yeah, so look, I have been working for Red Hat for over 12 years and in various roles, both in Australia and in Asia. And as part of that I’ve had the luxury, or the privilege, I should say, of experiencing a real diverse set of cultures that is the Asia Pacific, and particularly the ASEAN region.
In the last five years or so, I’ve been originally started out in Sydney, Australia, working for Red Hat and moved up to Singapore, and was there for five years in various roles, most recently looking after the Southeast Asian region, which includes effectively the ASEAN region, except for the Singapore country itself. And I think probably what’s most interesting about for your readership, or listenership, I should say that I could bring to this is the way that Red Hat has been what I call a “challenger brand”, in the software or enterprise software space.
Being this open-source, free, this idea of free, and Linux, and accessibility to now being kind of what I call a mainstay in enterprises and governments and , tier one and tier two institutions. It’s now kind of bread and butter – part of their IT components, and Red Hat is used pervasively across the Southeast Asian region. And the impact that that’s had, I think, is quite profound.
And the way that Red Hat itself has evolved, and I’ve evolved as an individual in trying to help organizations and governments and institutions apply these really fascinating IT architectures and software practices in this, brave new world of digital transformation has really, really kept me on my toes.
To sort of close it out, Joe with with regards to IT: for a person to work in an IT company for 12 plus years. It’s a bit like dog or cat years, one year equals seven years for humans so to speak. I think that’s quite akin to the IT world – if you stay at an employer for like that for that long, that is considered a long, long time. And the reason I’ve done that is because I just find it so fascinating and challenging. And it really, really keeps you on your toes and intellectually stimulating because you’re always addressing, really cutting edge challenges.
Joe Green (Host): Your enthusiasm about technology, or fascination, is something that I definitely share. And something that I find personally in the Linux operating system where it’s possible, of course, even on your desktop “daily driver”, to run the very much cutting edge in technology. Now as an open-source and Linux based company, is it that technology-first approach one that’s driving your customers’ digital transformation?
Ben Henshall (Guest): Ah, yeah, it categorically does, Joe. Jim Whitehurst, who, for those who don’t know, he was CEO, he joined about two weeks after I joined Red Hat in 2007, actually. And then he’s recently gone on to be president at IBM has because we’ve been actually recently acquired by IBM. And he described several years ago, with which I very much comprehensively agree, that innovation is the defining word of the 21st century.
And the rate of acceleration, accelerated innovation, is at levels that are unprecedented, and the digital or digitizization has exploded the facility, and the facilitation of innovation of “ideation”: ideas.
And because now, there are large swathes of the world that have access to internet, which is now the great leveler, that is driven by software. Software drives innovation, and that creative drives ideation and creativity. It drives interoperability and openness. At Red Hat we say openness unlocks the world’s potential, which then facilitates.
The other thing that Red Hat says is ideas are worth exploring. And that idea what we call ideation rise to the top, or the code speaks: the best ideas rise to the surface.
You have now this rapid conglomeration of intellectual property through the means of open-source, that the – what we call the traditional proprietary software world that is Microsoft and others – can’t compete with because now you have the world coming to the conversation and the way of innovation and contributing ideas, and then releasing that back out to the to the world.
Because open-source is accessible to everybody. The proprietory can’t keep up with that. And Microsoft, I just want to point out, is one of our best partners now. Because they, if you listen to the CEO, Satya Nadella is really behind open-source in the open-source model and ethos of ideation and openness and accessibility to software development.
So everybody can what we call “hack on the ideas”, and then that creates constant updates and new features and services.
Joe Green (Host): So despite the world coming to open-source, Microsoft included, do some areas of business, some particular verticals, shy away from the openness, the open aspect of open-source technology? One thinks of the financial sector, for instance, as being terribly conservative, small “C”, in particular. How does open-source “play”, if you like, in those sectors?
Ben Henshall (Guest): Honestly speaking, it’s a really, really good question to ask because there’s a lot of misunderstanding or just misapplication about the what we would call the brave new world of cutting edge, innovative innovation, openness, accessibility, rapid change, and where financial institutions are.
One of their core brands, goodwill offerings, is trust and stability and security. And so, how do you how do you have that contention of cultures and sort of brand affinities together that meet in the middle?
I can categorically say, in my experience, looking after financial services for some time at Red Hat and being based in Asia and traveling around and meet various Chief Information Officers from the various banks across the Southeast Asian region, whether it’s in Thailand or Malaysia or Indonesia or Philippines or Vietnam, what have you, is that the customer demand for and the market demand for ease of accessibility to financial service products. Their experience is predominantly driven through the digital front. So, if you don’t have that ability to provide a table stakes, a decent experience and accessibility to financial service products, through a digital means and effectively, that’s the mobile phone through your web and consent, it’s consistent, secure experience, then, you’re going to be left behind. And that requires the use and implementation of effectively what, say for instance, Red Hat provides: open-source, hybrid cloud secure architectures, software architectures and systems.
And that’s where this beautiful convergence happens with existing long-standing institutions in financial services, adopting this beautiful magnificent set of innovation of open-source software, but in a secure, reliable, stable, maintainable, certified way. And that’s, that’s, not not to blow Red Hat’s trumpet by any means at all!
But they certainly did crack the “special code”, if you will, or bringing the magic and the madness of open-source into a format that was consumable and usable by some of the most strictest and traditional and security-focused organizations being in financial institutions.
And we’ve been able to, sort of, bridge that divide, so that banks can reliably use this beautiful cutting-edge software that is open-source but in a secure, reliable way. And that has profoundly changed and enabled financial institutions and banks to do things that I would hazard a guess would take them…I mean, it quite conservatively, 10 to 15 years longer to actually do if they were continuing to implement IT systems in a way that they were doing before, with proprietary technology.
Joe Green (Host): Yeah, it’s almost as if Red Hat and similar companies are presenting almost a fait accompli to FinTech businesses. And I suppose there’s an enormous pressure on those, especially those old venerable institutions like the HSBC and Morgan Chase to change their ways. I’m guessing they’re under a lot of pressure from threats from new digital-only disruptive startups in, for instance, consumer banking, insurance, investment and so on. Is that a mindset amongst those older players: to transform using technology?
Ben Henshall (Guest): Yes! That’s a very simple answer, yes, they are. And they’re making some pretty decent headway, the global brands like the Barclays and the GA banks, the City Banks and those sorts of things.
They are categorically forging ahead with trying to accelerate and change the way that they deliver financial services in a digital-native, cloud-native (if you want to use that sort of word) way, and using a whole lot of Red Hat. And standing on stages! You can just search Google on YouTube for talks by Barclays Bank or Deutsche Bank, Banco Santander BBVA , one of the two legislative Spanish banks or Anza bank or Catholicon, Bronco, those sorts of institutions, using cutting edge technology and practices. What I call agile practices, so that they can change, and adjust, and deliver new services or banking products faster through the digital routes or multi-channel routes, as it’s called today.
Joe, if I can just quickly pick up on something you said about Google, for instance: they’re looking to [Google]. They are getting into financial services because they’ve got Google Pay. So I find that the banks are in this really interesting predicament where you have, upwards of 1 billion people in the Southeast Asia region who are unbanked, right? But you know, that’s a huge market opportunity and you’ve got rising middle and rising low incomes and middle income, income wealth going on, you’ve got this massive explosion of SME lending, and high GDP growth rates, obviously, pre-COVID and I think that’ll pick up in the new, post-COVID world.
So you’ve got this really rising aspiration in the Southeast Asian region, for instance. And they’re trying to figure out how do I get access to money, in a reliable way? The banks have all this money that they could lend out, they don’t have good credit risk, but they’re trying to distribute it through, different routes: that’s for digitization.
And so, when you have that model, and you have rising incomes, and the cloud companies are going, “Hey, how do I get access to that?” “…Actually, I’ve already got them as a customer through Gmail, or through, my Amazon account or what have you.”
They want to sell more products. So, there’s, this interesting co-operation and competitiveness where the banks are saying, “I want to partner with these cloud companies, but then also, actually tomorrow, they could be my direct competitor in some instances.”
So how do I adjust my banking services that protect me, but also means I can have this great ecosystem and partnership with the likes of the cloud companies? And I think that’s where that’s a really interesting existential issue for the boards of these banks to consider for today and tomorrow. It’s risk and having strong, what we call decoupled IT architectures that enable a bank to own and drive its IT strategy.
That means it can harness these these cloud providers, but also protect their intellectual property and their services so that they aren’t completely or wholly tied to, for instance, these cloud providers. It’s a very, very pertinent risk-adjusted issue that they need to face, or are facing. And I think, not not to blow Red Hat’s trumpet but I think it’s that we’re in the right place at the right time. If you don’t own an IT strategy within a bank that allows you can decouple yourself and have a broad ecosystem, then you are sort of almost on a one-train lane whether or not you like it.
You can adjust and move if your partner, who is a potential cloud company is now your direct competitor in what you’re trying to do, and if you need to adjust, then you’re kind of, challenged by being able to make those adjustments. And that’s driven by digitalization. That’s driven by IT strategy.
Joe Green (Host): It’s certainly led to an interesting situation, hasn’t it? , FinTech companies, in competition with big cloud providers, the big tech companies that people are in bed with already, through necessity. And the prize, of course, is the, as you say, the hundreds of millions of unbanked people across the APAC region. It must be difficult for banks, certainly challenging.
Ben Henshall (Guest): Joe it categorically is, and I can say this with, real, what I call pedestrian examples on the ground, examples of the constraints and the opportunity where, because financial services the prime mode of delivery and experience is now through digitalization, that if you have an IoT – and this sounds slightly technical, but just bear with me on this – if your IT systems are architected so that it means that you cannot move to different services. So, say you are to, use your words, in bed with one cloud provider, then if that cloud provider becomes a competitor too, that becomes so painful that you say: Right, they’re becoming more of a competitor rather than a cooperative partner. How do I move and shift?
And that’s where being agile or strategically agile comes into it. And if your IT architecture is very well designed for one particular cloud model, then it becomes very difficult to shift and move so that, you can, just how you want it to.
Now, I do want to preface this Joe by saying, the cloud providers in the cloud companies are wonderful partners of Red Hat and, they’ve been big proponents and big, big partners of ours and doing amazing things. So I certainly don’t want to besmirch what they’re doing. And they are continually expanding and offering new products and services, Amazon, and Google, it’s almost kind of like every month that they’re releasing something new or acquiring something new, whether it’s in pharmaceuticals or it’s in groceries, or it’s in content creation, or it’s in SME lending, or it’s in payments, or it’s in basic accounts, or it’s, whatever it is! Or music or streaming, from selling books, they’re continually growing and they’ve got 100 of millions to billions of customers and people are very comfortable with them.
So it’s kind of like: how do you have a good risk mitigation strategy that enables you to tap into their great innovation but then also pivot and shift to a new provider or move away from them if they become so much of a constraint or a competitor to what you’re doing? And that’s where having the right IT architecture or open architecture, as we call it at Red Hat, driven by open-source, really can help facilitate and de-risk are those those options for financial institutions. And we’re seeing that a lot.
Joe Green (Host): I wanted to touch on the fact that Red Hat has the old school juggernaut of IBM behind it, and the fact that you’re very active in Southeast Asia and across the APAC region. What’s the reception like for Red Hat, albeit with a big US company behind it. And what’s next for the region? As far as Red Hat’s concerned?
Ben Henshall (Guest): Thanks for that question, Joe, because I really just personally loved talking about Asia Pacific, and obviously, the ASEAN region or the Southeast Asian region, because that’s kind of where my heart is. And it’s certainly safe to say that the West, if I can use that term, had been more highly open and adoptive of, open-source and, applying cutting edge technology for the previous 20 years or so, or the past few decades.
And, if you look at what’s in everybody’s hand is an android or an iOS device, of some nature that’s sitting in everybody’s hand, right? And the commoditization of IT has made it accessible for a lot of people that wouldn’t necessarily have been there 20 years ago.
So it’s certainly so safe to say the West has been at the faster off. But that has significantly shifted in the last five to 10 years. And I’d say it’s more than the last decade, but it’s really accelerated in the last several years. With this rising GDP, the accessibility to transparency of services and systems, the implementation of decent 4G networks, some reasonable stability in governments in the Southeast Asian region.
And then the need for kind-of conservative fiscal policies, about the need to invest in infrastructure like education and roads and hospitals and obviously our networks: that has accelerated the adoption of digital services, which then have facilitated this rise of the small and medium sized enterprise and the entrepreneur.
So, now, that has been driven by a large degree, at least from an IT perspective, through open-source and through our partnerships and through great vendors like IBM and Microsoft and Google and, Adobe and others. They’ve been there hoping to do that.
And what open-source does, and what Red Hat brings to that is that ubiquitous access, and that very low-cost entry point to test an experiment, and trial, and then implement, and learn, and adjust how you apply these cutting edge architectures, and IT practices, and the open-source practices within, say, a large enterprise or a government agency or medium-sized entity. And that’s where I’d say, Joe, as a Westerner myself from Australia (which is what we call a mature market), the way that Southeast Asian markets and in particular financial institutions are addressing, open banking or banking to the unbanked at low cost services.
Going to your point earlier on, cash to mobile payments without having to go through all the different other stages: they’re addressing those those ways in faster ways than say, long standing institutions have done in more mature markets, because they have to, that’s the way that the market adopts and wants to adopt it.
And the only way to do that in a low cost way, really, is through, an open-source architecture model.
Joe Green (Host): And how about the the Chinese influence in the region. I’m thinking of Tencent and Alibaba? Chinese life is very much more dictated digitally by those key players then we in the West often realize. Is that influence from China being felt In the broader Asia Pacific area?
Ben Henshall (Guest): Look, I’d have to I probably answer it this way; Joe, I hear where you’re coming from. But I just want to make sure that I’m not speaking out of turn with regards to how the application and the mobile first, if you will, and the lifestyle app ubiquity, as being used in the West versus say in the more developing markets that that is Southeast Asia.
What I would say is that by far, definitely, the number of millennials or Gen Z’s that are within the radius of Southeast Asia market, the majority that live in that area, they constitute a greater level of people then are employed in Western Europe or that are in North America!
So they are a huge audience that are now pretty educated – highly educated – very aspirational, have access to a smartphone, and 4g, or broadband, and their expectations of their service providers or consumers or brands that they use is very, very high.
It’s on par with what me in Australia was used to, so that ubiquity of usability and security through your apps, and the frictionless experience, is considered, table stakes. And so, that’s where, again, as an example, financial institutions because it’s now pervasive, the way we use banks and transactions and p2p payments, and payment models, and NFC systems, as a first class citizen, as an experience is there in Southeast Asia.
And I wouldn’t say that so much driven by Tencent or Alibaba! Oh, what they’ve done is they’ve just, which is what China is famous for, saying “What’s going on in the West?” saying, “Hey, that looks really good. I’ll copy that. And then I’ll add some extra flavor to it or extra features, and I’ll do it a bit faster. Because, I don’t have potentially maybe the organizational political structures that slow me down from doing that.”
Joe Green (Host): There’s a certain amount of necessity, as you say, I might term that necessity, though, or at least the way I think… you might call that necessity leadership. Of course, after all in many ways, the Asia Pacific region is streets ahead in technology, certainly amongst the younger generations. I think and certainly we in the West look still to Asia to lead the way, but is it a generation Z? Is that what you’re saying?
Ben Henshall (Guest): Pretty much. Yeah. Just quickly to add to that, the way that, Southeast Asia that I’ve observed thinks about the problems and the opportunities they’ve got ahead of them, is how do I get ubiquitous, easy, frictionless access to financial services through a digital form? Where there’s sometimes very little credit history, where I would normally go to certify code to? What would we would consider in the West, possibly slightly remote or, Midwest communities, because there’s not a branch there.
Reliably, securely frictionlessly and that’s kind of the way they’re thinking about it. And because they can sometimes make a lot of these don’t have a whole lot of money, or purchasing power comparatively to, Western countries because the GDP per capita is considerably lower, but it’s growing fast.
They may not be a highly profitable customer, because of the amount of money that they don’t have, my gosh, you get them in early and you give them good experience. You get the data from those transactions and the interactions. That’s really, really interesting. And how do you do it at scale on the scale of 1 billion people that are unbanked? They’re the kind of problems and opportunities that they’re thinking about that the West doesn’t have to think about because it’s already got highly profitable customers.
Now, it’s, a “customership”, if you will, it’s attrition rates, all that sort of stuff. And it’s trying to keep it and come and steal customers from other banks or other institutions. Whereas in Asia or Southeast Asia, it’s not as much that of “how do I steal customers”, but “how do I take advantage of this great opportunity, but also do it in a way that’s really low cost and scalable?” Which is, of course, where Red Hat comes in.
Joe Green (Host): And what often people forget, is that if you’re a developer, you’re not standing alone. You’re one of 10,000 developers right across the world. So if your boss turns around to you one day and says, look, we need to produce an app, and it’s to pull in all the local insurance companies’ quotes and put them in one place and present the best quotes in this consumer facing app, there’s actually good chance that at least a decent chunk of the necessary work’s been done already by someone somewhere. And, the chances are, they’ve published it, so you can go and look, and download and contribute. However, anyway, I’ve got to stop infusing over open-source so much: my doctor says I shouldn’t get too excited at my age!
So I’ll turn now if I may, to asking you about any events that you guys might be running online or otherwise coming up, or any resources you can point our listeners towards.
Ben Henshall (GUEST): Joe, thanks very much for asking that. So two things I want to mention. Recently, we had our global Red Hat summit, which is a global event that we would normally host as like many corporations, in a physical space. That was in April, but we had to do it online and virtually. So that’s where people can participate. And we had upwards of 20 to 30,000 people that attended that online and people can go and watch those talks: they’re all recorded and people can go and listen to that. So that was recently done. And we had amazing talks from Verizon, BMW, and eBay and just a plethora of organizations that were talking about their journey, what they’ve done, how they’ve changed, lessons they’ve learned: those things.
So it’s one of those great, I guess, virtual events that you can go to and register and replay these these talks by these customers. It’s a little bit of a space where Red Hat can show off what customers are doing. And customers just tell their story, which is, I think, really, really wonderful.
The other one that I think is a little bit more interesting that’s coming up is we’ve got a Red Hat forum in Asia Pacific. And so this is not, again, where we would go and have it in lots of cities across Asia Pacific and in the ASEAN region, but that’s not going to happen physically, but we are going to be doing it virtually, online as well. So that’s something to go and look at if you go to redhat.com search in forum, and see how we’ve set up some dates as to when those events will happen.
Joe Green (Host): So unfortunately time’s run out on us, as usual. So on a personal note, my thanks go out to Ben Henshall who’s General Manager at Red Hat for the Asia Pacific region. Thanks, Ben!
Ben Henshall (Guest): Oh, that’s very nice of you, Joe, great questions, and thanks very much for asking.
Joe Green (Host): Thank you. And I hope that you the listeners can join us next time on the next episode of the Tech Means Business podcast. Bye for now.