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By | Gavin Clarke 27th June 2007 23:22

Red Hat spreads its JBoss in Q1

Microsoft invited to improve

Red Hat turned in a healthy first quarter amid signs it's evolving into a multifaceted operation, thanks to growing sales of JBoss and use of channel partners.

The Linux vendor saw net income grow 18 per cent to $17.1m on revenue that increased 41.5 per cent to $118.8m, and earnings per diluted share that increased a penny to $0.08 for the period to May 31. Subscriptions to Red Hat Linux grew 44 per cent to $103m.

A growing percentage of business is now coming from channel partners, a relatively recent strategy, instead of through direct sales with an increasing number of partners certifying on, and selling, the JBoss middleware stack. Chairman and Chief executive Matthew Szulik claimed backing for JBoss by a global operation such as Red Hat means JBoss is being "considered as a serious alternative to closed source products" and moving from deployment in development shops to "the product back end."

Expressing confidence in future growth, Szulik noted rising interest in Asia Pacific. With companies building "up their J2EE [Java 2 Enterprise Edition] competence that is getting us into the game as they get us into broad-scale deployment."

Szulik said Red Hat is moving to become a multi-product company where "the buyer is different."

"We are moving to mission critical environments, where the application not the [Linux] operating system is the determining factor in customer success," he said.

Fielding a question during the quarterly call with analysts on the impact to Red Hat's business of Microsoft's claims 235 of its patents exist around Linux, Szulik uttered words that'll have pundits sifting for meaning or a change of policy in dealing with the Microsoft menace. "We continue to invite the opportunity to participate with Microsoft around standards in improving the customer experience of operating successfully in heterogeneous environments," he said.

He also put server virtualization into context, dismissing bullish assessments from analysts this will hurt Red Hat's business through server consolidation and that Red its carrying the seeds to this destruction by shipping its Linux with the Xen hypervisor on board. Szulik believes virtualization will be used to manage workloads and run legacy Unix applications on Linux, proving a catalyst for Red Hat's business.®

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