Red Hat's diversification, cloud moves look promising

Red Hat this week enhanced its JBoss middleware portfolio and bolstered its cloud computing efforts. Couple those moves with Red Hat Enterprise Linux and the company is no longer a one-trick tech company.
Written by Larry Dignan, Contributor

Red Hat this week further diversified its business with CloudForms, which is designed to be a building block for infrastructure as a service private and hybrid cloud computing efforts. Add in a bevy of enhancements for the company's JBoss middleware and it's clear that Red Hat has become more than a one-trick pony.

In the early years, Red Hat lived by its enterprise Linux distribution. Then Red Hat took on JBoss and expanded the middleware line from one product to eight. Now Red Hat's cloud plans are continuing to development and it's clear the company has a nice stack of IT software.

Here's the week in Red Hat. The company...

  • Launched CloudForms, an effort to combine application lifecycle management with the portability of computing across physical, virtual and cloud resources. If CloudForms can curb virtual server sprawl---an increasingly common problems---enterprises will be interested. In addition, Red Hat is supporting the public clouds of Amazon, IBM and NTT. CloudForms is in beta and will be available later in 2011.
  • Outlined OpenShift, a platform as a service effort for open source developers. With OpenShift, Red Hat is aiming to integrate its open source software with third party APIs.
  • Announced a Red Hat Cloud design and reference architecture for HP's CloudSystem and other services. Red Hat also expanded its partnership with IBM and BMC Software.
  • Introduced a bevy of JBoss enhancements including grid extensions and a certified developer program.

What's it all mean? Red Hat can sustain 15 percent to 20 percent billings growth for the foreseeable future as it racks up enterprise data center wins. Red Hat Enterprise Linux continues to benefit from Unix migrations and the company has built out its enterprise software stack.

Oppenheimer analyst Brad Reback noted that Red Hat is "no longer just a one-trick pony. Reback wrote:

In just 5 years, JBoss transformed from 1 middleware product (application platform) to offering a suite of 8 middleware products. No longer just an app server, Red Hat is making strategic investments for JBoss to provide additional flexibility for developers and to support next-generation application platforms (Java EE 6/7, mobile, etc.).

More importantly, Red Hat has figured out how to sell JBoss. Reback also added that Red Hat is making the right investments in research and development and sales and marketing to grab a bigger chunk of the enterprise.

In a nutshell, Red Hat can continue to upsell other software and services to its large Linux installed base. Stifel Nicolaus analyst Tim Klasell said that Red Hat is increasingly courting C-level executives as well as developers and project managers.

Klasell also noted that Red Hat's open cloud pitch may play well because CIOs will increasingly become worried about being locked in. There are a few wild cards for Red Hat, including a new pricing structure---per socket---for Red Hat Enterprise Linux 6, but the company remains well positioned to target multiple markets.


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