Red Hat sees rising Linux demand

Along with revenue growth, Red Hat Chief Financial Officer Kevin Thompson reported a net loss of US$900,000, or one cent per share, compared with an adjusted net loss of US$5.4 million, or four cents per share, a year ago.

During the quarter, Red Hat launched its Red Hat Network to encourage developers to produce products with Linux, such as embedded Linux in new Internet devices. It launched version 7 of Red Hat Linux with enhanced security, ease-of-use features and optimization for high-end Intel chips.

Red Hat Chief Executive Matthew Szulik said that the company was seeing increased demand for its Linux distribution and related products as customers "consolidate their Unix technologies to Red Hat Linux," along with "increased demand from device manufacturers."

During the quarter, Red Hat acquired C2Net Software, which produces Stronghold, a secure version of the popular Apache open source code Web server. Red Hat paid US$42.8 million in stock for the company. The acquisition provides "additional security to Red Hat's expanding product offering," company spokesmen said.

Red Hat is the largest North American distributor of Linux, and has taken over the lead in Japan with a 40 percent market share, according to a recent report by BCN Market View, a computer magazine that conducts surveys in Japan.