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Red Hat soars with fat profits, design wins

Mar 26, 2010 — by Eric Brown — from the LinuxDevices Archive — views

Enterprise Linux vendor Red Hat announced fourth-quarter financial results showing a 15 percent increase in revenues year-over-year. In other Red Hat news, the company announced new JBOSS and SOA tools, tipped a collaboration with IBM on cloud technology, and revealed customer wins with the Symbian Foundation and the Tokyo Stock Exchange.

Red Hat has had a busy March as the company prepares to ship the final version of Red Hat Linux Enterprise (RHEL) 5.5, which entered beta in early February. RHEL 5.5 provides memory allocation enhancements to the KVM (Kernel-based Virtual Machine) hypervisor, introduces new storage and WiFi drivers, and supports new AMD, IBM, and Intel processors.

Red Hat's exceptionally strong fourth quarter and 2010 year-ending financial report released earlier this week shows that the company is apparently defying the recession with its strategy of building a far-ranging services, middleware, and cloud business on top of its server-oriented open source Linux distribution. In its fiscal 2010 fourth quarter Red Hat earned $195.9 million in revenue, an increase of 18 percent from 4Q 2009, and the company saw a 46 percent increase in 4Q profits, says Red Hat.

Subscription revenue for the quarter was $169.2 million, up 21 percent year-over-year, says Red Hat. For the full year, total revenue was $748.2 million, an increase of 15 percent over the prior year, and subscription revenue was $638.7 million, up 18 percent.

Glowing financials are getting to be ho-hum at fast-growing Red Hat. In 2008, the Raleigh, North Carolina-based company had revenues totaling $652 million, up $129 million over the previous year, which was up $123 million over the year before that.

In an interview with MarketWatch. Jim Whitehurst (pictured at left), president and CEO of Red Hat, said that his company is seeing an expansion of sales into new industries as customer motivations shift beyond recession-era concerns about cost. While military and governmental organizations were the first to be drawn to RHEL and the open source model in the last few years, Red Hat is starting to appeal to companies in the oil and gas, transport, and pharmaceutical sectors among others, Whitehurst told the publication's Aude Lagorce.

"Across the board we're hearing a lot more discussions about new projects," Whitehurst is quoted as saying. "Last year we were hearing a lot about saving money."

New JBoss and SOA tools

In addition to releasing its financial results this week, Red Hat used the EclipseCon conference in Santa Clara, Calif. to introduce a new version of JBoss, as well as an updated, JBoss-based service-oriented architecture (SOA) platform, according to a Darryl Taft story in our sister publication, eWEEK.

Red Hat announced the JBoss Developer Studio 3.0 application development platform, which offers expanded support for all of the JBoss Enterprise Platforms, including JBoss Enterprise Application Platform, SOA, Portal, and Data Services platforms, says the story. JBoss Developer Studio 3.0 also moves up to Eclipse 3.5.

The related JBoss Enterprise SOA Platform 5.0 provide updates for its JBoss Enterprise Middleware portfolio, according to Taft. The SOA platform is said to be designed to integrate applications, services, transactions and business process components for automating business and IT processes.

A cloud partnership with IBM

Last week, meanwhile, Red Hat announced a collaboration with IBM to develop and test IBM's [private cloud applications using Red Hat's Enterprise Virtualization platform, according to another eWEEK story, this time by Chris Preimesberger. Red Hat and IBM will test the Red Hat virtualization software with the new IBM Smart Business Test Cloud (a private cloud technology), as well as its Smart Business Development & Test and Smart Business Application Development & Test cloud platforms. The latter both use Rational Software Delivery Services on IBM's existing global cloud system.

The collaboration also extends to IBM CloudBurst, a pre-integrated set of hardware, storage, virtualization, and networking options, with a built-in service management system, says the story.

Customer wins with Symbian, Tokyo Stock Exchange

Red Hat continues to sign up major new customers in cloud services and financial markets, among other sectors. On Mar. 15, the Symbian Foundation announced it had selected RHEL to run its private, cloud-based developer website and server. Now that Symbian has gone open source, and the Foundation's controlling force, Nokia, has expanded its Linux experimentation with its MeeGo partnership with Intel, Linux appeared to be a logical choice.

The Symbian Foundation is using RHEL for its developer site, which hosts source code, wikis, developer training, and support, says Red Hat. Red Hat also runs most of Symbian's servers, which have been licensed through IBM Services, says the company.

This week, Red Hat followed up with another customer win, this time with the Tokyo Stock Exchange (TSE). Co-developed with Fujitsu, the TSE's new "Arrowhead" platform uses RHEL to accelerate TSE's order response and information distribution speeds, says Red Hat. The Arrowhead system is said to handle the auction trading of all of TSE's cash products, including stocks and convertible bonds. TSE is already using RHEL for its derivatives trading system.

The Arrowhead system is said to expand order capacity by ten times compared to the previous system. As with other Red Hat wins in financial trading, including a new exchange for NYSE Euronext, Arrowhead is using a real-time version of RHEL that targets financial institutions and electronic trading systems. TSE has measured Arrowhead's order response time at two milliseconds, with information distribution time measured at three milliseconds, says Red Hat.

Stated Whitehurst, "With double digit revenue growth and record billings, our fourth quarter capped off a year of solid performance, moving us closer to our milestone revenue goal of a billion dollars. As we look forward, we believe that we are well positioned at the confluence of several major technology trends in the data center, including cloud computing, virtualization and middleware."


Press releases regarding all of the above stories may be found at the Red Hat news page, here. The MarketWatch interview with Whitehurst may be found here.

The eWEEK story on Red Hat's JBoss and SOA announcements should be here, and the story on its IBM cloud partnership should be here.

For more information on the leading upstream community source for RHEL, DesktkopLinux's coverage of the Fedora 13 alpha release earlier this month, may be found here.

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