Enterprise Linux Log

Feb 11 2009   6:46PM GMT

Red Hat proves value can be derived from open source

Leah Rosin Leah Rosin Profile: Leah Rosin

This week, Jim Whitehurst, president and CEO of Red Hat has issued a “State of the Union at Red Hat” message that at first glance appeared to be little more than a cute press pitch, well-timed with the State of the Union address from the President of the United States, Barack Obama. Whitehurst weaves in the common theme of open source being a “value” during the down economy, talks up acquisitions from 2008, and gives a shout-out to Linux community members JBoss.org and Fedora.

But things start to get interesting at point number six in his list, and I honestly would have missed this if I hadn’t seen the comments of The VAR Guy, who stated “Red Hat is destroying the old myth that there’s no money in open source.”

The VAR Guy’s declaration was based on Whitehurst’s statement with this information about the success of the company:

Weathering the economic storm. Red Hat has continued to execute well in what is a pretty competitive economic climate. In fiscal year 2008, Red Hat became the first open source vendor to cross the $500 million mark in revenues and we’ve also maintained 27 consecutive quarters of sequential growth in total revenue.

Impressive. Or is it? The VAR Guy points out that Microsoft earned 120 times as much during the same year.

Red Hat may be leading in the Linux distribution race thus far, but Novell is charging ahead, on the cusp of releasing SUSE 11, with greater virtualization and interoperability promised. With Novell’s partnership with Microsoft, the company is making gains in the market.

As businesses try to bounce back from the downturn in the economy, open source may be an even more attractive alternative. What do you think? Is Red Hat’s $500 million a true achievement, or is it just an attempt to give credence to open source? Share your thoughts.

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