Red Hat has announced expansion plans it claims will take it forward to 2007.

Taking as its cue new figures from IDC that show the Linux server market expanding by 26 per cent annually to a value of $12 billion by 2008, and the Linux client market growing by 30 per cent to $10 billion, Red Hat will expand in four directions: regionally; into mission-critical applications; in terms of product breadth; and with a more vertical focus.

CTO Brian Stevens said customers wanted faster development times above all. "It can take up to six months from idea and hardware acquisition to final product. So they want fresh thinking and they want to know how we test our software. So we have invested in a test grid, automation, and change tracking", he said.

Red Hat sees a grid approach underpinned by virtualisation as the way forward for a forthcoming 'stateless' Enterprise Linux in the data centre. This will allow applications to run wherever the hardware is available rather than being tied to one server. Only one version of the OS runs, simplifying update and maintenance programmes, while servers' individual configurations are stored in the network. This will also result in less downtime and better use, said Stevens.

"Virtualisation is key", he added, "because it insulates the application from hardware and allows us to get to grid. It also keys into the problem of utilisation - the answer to which is virtualisation as data centres are can't use any more power." The next major release of Enterprise Linux will include what the company called "fully integrated server virtualisation capability".

Stevens said its approach was also more scalable. "With stateless Linux we can turn multiple hardware images (VMs) into one image. The management problem goes down as you can manage multiple systems with the same numbers of IT staff."

Stevens however acknowledged that competitor VMWare's management tools "are better - I hope we could get to a common set of tools". He set a timescale of the end of 2006 for an open source software version. He also agreed that VMware was highly likely to be working on a para-virtualisation product but said that, in his view, a common, cross-vendor format for VMs would stifle innovation because you'd have to define and solidify the limit of what was being virtualised.

Red Hat is also planning to expand into the small business market. This will, said marketing VP Tim Yeaton , mean improving Red Hat's presence in the distribution channel. "We've seen much SME interest", said Yeaton. "Thirty-seven thousand of our new customers over the last quarter are SMEs. They don't need new products but advice tailored for them," he said.

Yeaton also said that the company wants to move into what's called the solutions-oriented market. So far, Linux is mainly found supporting applications such as Web serving. Red Hat now wants Enterprise Linux to be the underpinnings for enterprise-level applications such as SAP and other mission-critical environments. He said that over half of the company's top 25 recent deals were "in the mission-critical space. We plan to do more."

Regional growth, as the company puts it, means moving into areas of the globe where it currently has little or no presence, such as Russia, China and Latin-America. It already has seven offices in India, and has just developed a Russian version of Enterprise Linux.