Red Hat Posts Strong Numbers, Tips Cap to JBoss, Virtualization

by Ostatic Staff - Sep. 24, 2008

After the close of the stock market today, Red Hat reported another strong financial quarter. The company's second quarter results included revenue of $164.4 million, up 29 percent year-over-year, and net income was $21.1 million compared with $18.2 million in the year ago quarter.  Here's a look at what's working for the company, and some mudslinging going on between Red Hat and Oracle around RHEL and Oracle Enterprise Linux.

The company singled out its relatively new focus on virtualization as a strong point in its strategy:

"Our focused execution has delivered another quarter of solid growth and financial results," stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. "Also in Q2, we continued to execute on our virtualization strategy with our award winning RHEL platform as the solid, certified foundation. Our goal is for Red Hat to deliver a comprehensive virtualization solution from server to desktop which will enable our customers to deploy any application, anywhere, anytime."

It's not yet clear, though, how Red Hat will monetize virtualization. There are no signs of any revenue coming immediately from its recent acquisition of virtualization company Qumranet.

You can find more on the numbers at the bottom of the page here. Matt Asay also notes a number of trends Red Hat is benefiting from (all of its top 25 accounts have renewed subscriptions).

Among the more interesting points Matt notes are that Red Hat's middleware business is growing at twice the rate of its platform business. In particular, more companies are standardizing on JBoss as a strategic platform. JBoss Enterprise Application Platform is also now available along with Red Hat Enterprise Linux on the Amazon EC2 Cloud.

Meanwhile, there has been a kerfuffle brewing between Oracle and Red Hat over Oracle's efforts to support Red Hat's Linux customers. Oracle has released this statement:

"Put yourself in Red Hat's shoes. Oracle directly supports Red Hat Linux and provides free downloads of compatible binaries. The quality of Oracle support is superior -- our customer satisfaction is very high -- and our price is lower."

Red Hat officials are flatly denying that Oracle is cutting into its support business. There is no sign from Red Hat's strong financial results today that Oracle is encroaching on them in any meaningful way. With several strong quarters in a row, the company is also displaying pronounced immunity to bad economic conditions and tighter IT budgets, although its stock has slumped with the depressed overall market here in the third quarter.