OStatic

While Novell's report yesterday that its quarterly Linux revenue soared 22 percent year-over-year was a positive note, and one that was expected, the real upshot of the company's earnings report was that every other part of its business sank. Overall, its revenues slipped to $216 million for the quarter, compared to $245 million for the comparable quarter last year. Despite the company's drum pounding about the promise and growth of its Linux business, Novell is a public company that needs revenues to come from more than one aspect of its business.?

As Matt Asay notes, Red Hat's financial performance has been much rosier during the recession, but there are also questions arising about why Red Hat's revenue growth is slowing. Both companies need more than just Linux business to grow over the long run, and there are good reasons to believe that Red Hat may be the one of the two that pulls a rabbit--or a series of them--out of its red hat.?

Even as the economy has stayed in the doldrums, Red Hat continues to post strong quarterly financial results. Late Wednesday, the company reported first quarter revenues of $174.4 million, up 11 percent from $156.6 million a year earlier. Profits were also up, with quarterly earnings of $18.5 million, or 10 cents a share, up from a profit of $17.3 million, or 8 cents a share, for the same quarter last year.

Red Hat?s growth is driven in part by our ability to help enterprise customers save money in a challenging IT spending environment, said CEO Jim Whitehurst. Our open source solutions drive new capabilities, efficiencies and functionality into the mission critical infrastructure of our customers.? Red Hat's total cash, cash equivalents and investments as of May 31, 2009 sat at a whopping $884.5 million, which is more evidence of the investment savvy that Whitehurst and Red Hat's top brass have.