MESSAGE
| DATE | 2008-03-29 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [NYLXS - HANGOUT] Redhat doing fine
|
March 27, 2008, 8:34 pm
No Recession at Red Hat
By Steve Lohr
Red Hat, the Linux software company, gave a nice welcome present Thursday
to its new chief executive, James Whitehurst.
The company, which distributes Linux and other open-source software,
reported that its quarterly sales grew 27 percent and earnings slightly
surpassed analysts’ consensus estimate. The company also presented an
upbeat outlook for its just-started fiscal year, predicting growth of
another 30 percent. In after-hours trading, Red Hat shares rose nearly
5 percent.
Red Hat, based in Raleigh, N.C., has done the difficult — built a solid,
profitable business around open-source software. It charges its corporate
customers yearly subscriptions for its flavor of the Linux operating
system along with technical support and training. For its current fiscal
year, ending in March 2009, Red Hat expects sales to reach $665 million
to $680 million, above Wall Street projections, while earnings per share
should rise to 78 cents to 82 cents. The per-share number is a bit below
the consensus estimate, but that is more than explained by Red Hat’s
assumption that in a recessionary environment, interest rates will fall
further, reducing the income on the $1 billion in cash the company is
sitting on.
Mr. Whitehurst, who joined the company in January, said that in a
recession Red Hat should continue to gain ground, since open-source
software is regarded by many corporate customers as a lower-cost
alternative to proprietary products.
Red Hat has now established itself as a strong player in the corporate
software market. For a year, Oracle has tried to undercut Red Hat by
offering a similar version of Linux and charging less for technical
support. But it has made scant progress to date.
Red Hat certifies that 4,000 different software applications run on its
brand of Linux and has worked closely for years with all the significant
hardware vendors. “There’s a network effect there,†Mr. Whitehurst
said in an interview. “Oracle doesn’t have the ecosystem.â€
Nor does anyone else have that kind of Linux-based ecosystem. It could
look attractive to enterprise software companies that increasingly seek to
offer corporate customers several layers in the so-called software stack
— an operating system, middleware, perhaps a database and applications
too. If the Red Hat ecosystem is valuable, it would also not be too
expensive at current prices. Its market capitalization is $3.4 billion, a
price tag that would be reduced substantially by that $1 billion in cash.
Oracle, Sun Microsystems, I.B.M., EMC (parent of VMware) and even Google
have been rumored as possible suitors. The recent flurry, to be sure,
is but the most recent round of rumors about Red Hat.
It is flattering to be mentioned, Mr. Whitehurst said, but he noted
that corporate customers and the industry benefit from what he called
Red Hat’s “Switzerland status†— not being a province of one of
the major powers in the technology industry.
--
http://www.mrbrklyn.com - Interesting Stuff
http://www.nylxs.com - Leadership Development in Free Software
So many immigrant groups have swept through our town that Brooklyn, like Atlantis, reaches mythological proportions in the mind of the world - RI Safir 1998
http://fairuse.nylxs.com DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
"Yeah - I write Free Software...so SUE ME"
"The tremendous problem we face is that we are becoming sharecroppers to our own cultural heritage -- we need the ability to participate in our own society."
"> I'm an engineer. I choose the best tool for the job, politics be damned.<
You must be a stupid engineer then, because politcs and technology have been attached at the hip since the 1st dynasty in Ancient Egypt. I guess you missed that one."
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