Red Hat credits Gluster buy in quarterly results

Red Hat has demonstrated steady growth and has pointed to its growing involvement in the open-source community as a way it is helping to push future products and generate more revenue
Written by Jack Clark, Contributor on

Open-source software company Red Hat has reported a steady growth rate for its third quarter, and expressed hopes for its new object storage technology.

The Red Hat earnings for third financial quarter of 2012, reported on Monday, showed quarterly revenues of $290m (£184m), up three percent on the previous quarter and 23 percent year-on-year. Net income was $38.2m, down 0.45 percent on the previous quarter but up 46 percent on the same quarter in the preceding year.

"Even in a challenging global economy... customers... are driving productivity gains and agility across their organisations by investing in their IT infrastructure," James Whitehurst, Red Hat's chief executive, said in an earnings call discussing the results. "Open-source technologies like Red Hat Storage are not only disrupting antiquated expensive IT products in the market today, but more importantly, they are providing solutions to the new challenges facing enterprises."

Red Hat has two main product families: Red Hat Enterprise Linux and the JBoss middleware suite. The company's top three largest industry sectors are financial companies, technology companies and public-sector organisations, Charles Peters, the company's chief financial officer, said on the call.

The acquisition of Gluster in October gave the company technology to build Red Hat Storage, a product that sees it dabble in software-based storage.

Whitehurst said that the Gluster technology will become increasingly important over time. "This software-only solution addresses storage of unstructured data, spanning from bare metal to virtualised instances and in cloud deployments," he said. "This [is a] $4bn addressable market, which is growing rapidly, [and] is a great place for Red Had to enter the big data world and provide storage in the cloud."

Open-source experiments

Whitehurst said Red Hat's overall efforts in open source were a way of generating future profits. Open source provides a way for the company to experiment with technologies, see how the open-source user base reacts, then integrate those technologies into its enterprise paid-for products such as Red Hat Enterprise Linux.

"We released Fedora 16, our community-supported open-source Linux distribution," said Whitehurst. "As a vehicle for the initial integration of cutting-edge technology, Fedora enables us to vet nascent capabilities in areas such as cloud and virtualisation."

Red Hat is involved in the Facebook's Open Compute Project, which aims to lower the cost and increase the efficiency of datacentre hardware. The exact nature of Red Hat's involvement has not yet been clarified.

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