Red Hat Aims For One Billion Revenue Mark on Cloud Computing Growth
Open source software maker Red Hat declared record earnings last week on the strength of its products on the cloud computing space, and is now hoping to reach the coveted 1 billion dollar sales mark this year. On Thursday, the day after the announcement, Red Hat shares climbed $7.29, or 18.2%, to $47.26, making it the biggest gainer on the S&P 500.
Red Hat’s quarterly revenue during 2010 Q4 totaled $244.8 million, representing a 25% improvement on 2009’s figures, and CEO Jim Whitehurst said all four quarters of 2010 had at seen at least 20% growth in revenue. Consequently, he said that the 1 billion dollar mark may not be so elusive this year.
“This is a very strong finish to a record year,” Whitehurst said. “With record bookings and billings in the fourth quarter, we are on a run rate to become the first pure-play open source company to achieve $1 billion in revenues next fiscal year, a milestone achievement for Red Hat and the open source community.”
“We believe the strong demand we experienced was largely down to customers who are modernizing their data centers and preparing their infrastructure for cloud computing,” he added.
Red Hat CFO Charlie Peters mentioned that the company had borne out the recession well and was delivering value in the current IT climate. “In addition to growing throughout the recession, our fiscal performance shows that Red Hat’s value proposition is equally compelling as the economic climate and IT spending improves,” he said.
Red Hat offers open source software that is often used to deploy cloud computing solutions. One of its products, the data center operating system platform called Red Hat Enterprise Linux, in the words of an analyst, has emerged as “the OS of choice for private cloud architectures.” The current number of users exceeds 500.
Red Hat, besides growing organically, has made the occasional acquisition to beef up its cloud services repertoire. In the third quarter last year, it acquired Makara, a developer of deployment and management solutions for cloud applications, with the aim to accelerate the development of its comprehensive Platform-as-a-Service (PaaS) solution as a part of its Cloud Foundation portfolio.
By Sourya Biswas