After the markets closed today, Red Hat said its Q2 2011 total revenue was $219.8 million, up 20% from the year ago quarter. Subscription revenue for the quarter was $186.2 million, up 19% year-over-year. Although net income fell to $23.7 million (down about $5.2 million), Red Hat's earnings still beat Wall Street's expectations.
In a prepared statement, CEO Jim Whitehurst said Red Hat is starting to see some customer interest in the company's Red Hat Enterprise Virtualization (RHEV) strategy. RHEV is built atop the KVM (kernel-based virtual machine), an open source alternative to VMware, Microsoft Hyper-V and Citrix virtualization. Whitehurst says Red Hat also won its first $1 million-plus private enterprise cloud deal.
Generally speaking, it sounds like Red Hat Enterprise Linux (RHEL) subscriptions continue to hum along. The VAR Guy didn't see or hear any news about Red Hat's JBoss middleware platform. Seems like Whitehurst and the Red Hat investor relations team search engine optimized (SEOed) their statements around cloud, cloud and more cloud.
Rival WatchRed Hat's financial results arrive only a few days after Oracle unveiled the Oracle Unbreakable Enterprise Kernel, which is a Linux kernel optimized for Oracle hardware and software.
Oracle has made some key Linux moves over the past year or two, but so far The VAR Guy hasn't heard from many partners or customers that have warmed up to Oracle Linux.
Meanwhile, Novell -- promoter of SUSE Linux -- in August 2010 announced less-than-stellar quarterly results. Though the company has launched new platforms like the Novell Cloud Security Service and Novell Cloud Manager, some customers have delayed Novell-related purchases amid Novell's uncertain ownership status. Novell's board has been considering the potential sale of the company, and potential suitors are believed to include VMware and Attachmate.
Dollars and CentsFor Red Hat partners, the wise certification money going forward seems to be on RHEV. Traditional Linux resellers are getting commoditized, and Red Hat JBoss middleware seems to have a niche following among sophisticated enterprise integrators.
In stark contrast, virtualization plays in businesses of all sizes. In fact, 68 percent of IT pros within small and midsize businesses plan to leverage some form of virtualization by the end of 2010, this is up from 63 percent in the first half of 2010, according to a recent survey by Spiceworks, the remote management platform provider.
Translation: Red Hat's next mass channel play will be RHEV, The VAR Guy believes.
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