Much as I hate to admit it, I have to give props to the folks over at Red Hat. I watched Red Hat CEO Jim Whitehurst on CNBC yesterday, and while it pains to me to compliment a direct competitor, I can't argue with the financial results that Red Hat is turning in. They continue to grow their revenue, operating margin and free cash flow. In his two years as CEO, Whitehurst has done a very impressive job getting that company to fire on all cylinders – and it is reflected in their stock price, which is up nearly 44% year-to-date.

The good news is that while I can appreciate Red Hat's success, there is still plenty of opportunity for SUSE Linux Enterprise to be successful. As Whitehurst noted in his interview with Jim Cramer, while Red Hat may hold the majority share of the Linux market today, Linux as a platform holds less than 20% of the overall server market. So there is still plenty of room for growth for both Red Hat and SUSE.

But how does SUSE grow? By taking a page of Red Hat's playbook, and then adopting it for SUSE's strengths.

Let's start by looking at what Red Hat does well. They focus. (This is a common theme of mine as you can read from previous blog posts like this one.) As Whitehurst so eloquently stated to Jim Cramer, Red Hat knows what business it is in – providing server operating systems to large enterprises with complex IT needs. These organizations are willing to pay a premium over Red Hat's cost of goods sold for these operating systems, but the overall price is still less than competitive operating systems from Microsoft or Oracle Solaris. Red Hat has not pursued the consumer market for either desktops or servers – Whitehurst even directed those folks to the free version of Red Hat, called Fedora. (SUSE has its own community-centric operating system that is also free, called openSUSE.) Nor has Red Hat spent a lot of time on the corporate desktop market. By pursuing this singular strategic goal – a clear target customer (large enterprises) and a clear product vision (robust server operating systems built on Linux) – Red Hat has been able to deliver outstanding results. On the power of those outstanding results, Red Hat has been able to generate the cash they need to buy companies that let them move up the open source IT stack.

There is still a lot of money left to be made in Linux operating systems. SUSE can – and will – grow market share in the broader server market by pursuing the same mission-critical operating system target as Red Hat, but SUSE needs to differentiate itself based on the power and breadth of its ecosystem. SUSE does not need to take share from Red Hat in the Linux market. SUSE needs to get the greenfield opportunities in that 80+% of the market that still isn't using Linux servers. If Red Hat is Hertz, then SUSE needs to be Avis. If Red Hat sells Kleenex, then SUSE needs to be Puffs. In a growing market like Linux – which IDC predicts will grow at 17% next year – there is room for two vendors.

SUSE is already executing on its strategy to leverage the ecosystem. For example, VMware now ships a copy of SUSE Linux Enterprise with every copy of its vSphere hypervisor at no additional cost to the customer. SUSE continues to hold roughly 80% of the market for Linux on the IBM Mainframe. SUSE has the Linux recommended by Microsoft – and Microsoft has sold more than $240M of SUSE since the partnership was announced in 2006. SUSE is the only operating system optimized to be the perfect guest on all the major hypervisors – VMware vSphere, Microsoft Hyper-V, Citrix Xen, and KVM. And we've got tons of mission-critical customers, ranging from Wal-Mart to Burton Snowboards to Southwest Airlines. But there is still room for improvement – better channel integration, more laser-focus on the product features that matter, and the ever-present opportunity to better understand our customers' needs.

So, my sincere congratulations to Red Hat. They outlined a strategy, they executed and now they are being rewarded financially. I respect success. And if imitation is the sincerest form of flattery, then I hope to see SUSE take a page out of that playbook and mirror that success. After all, there is enough server revenue out there for both of us.