|
There is a way to make money from Linux even in a down economy — it’s called subscription revenues.
Linux vendor Red Hat yesterday reported growth in income and revenues on the back of renewal rates for its Linux support subscriptions. Revenues for the company’s third fiscal quarter for 2009, which ended Nov. 30, hit $165.3 million, an increase of 22 percent over its third-quarter fiscal 2008 performance a year ago.
On the net income side of the books, Red Hat (NYSE: RHT) reported income of $24.3 million, or 12 cents per share, which is an improvement over the $20.3 million or 10 cent per share it reported for the same period last year. Minus taxes and other costs, profit totaled 24 cents per share, topping Wall Street estimates of 17 cents per share, according to Reuters Estimates.
“Starting with a few highlights from fiscal Q3, we continued to see strong renewals and upsells,” Red Hat CEO Jim Whitehurst told analysts during the company’s earning call. “We renewed all of the top 25 deals that were scheduled to renew this quarter and they were renewed at approximately 106 percent of prior year’s value.”
Red Hat CFO Charlie Peters reported that overall subscription revenue for the quarter was $135.5 million, up 17 percent year-over-year. Peters also emphasized Red Hat’s subscription model as a key to continued stable growth.
“Our results demonstrate the strength and predictability of our business and the continued demand for open source solutions,” Peters told analysts. “Keep in mind that 82 percent of our revenue is recurring and subscription-based. Some of the most mission-critical trading systems in the world run on Red Hat and more mission-critical work is moved our way every quarter.”
Among the top deals renewed by Red Hat were three multi-year renewals with large financial services firms. One of Red Hat’s top 25 deals also includes a one-year transaction in which the customer moved from a free version of Linux to Red Hat’s paid subscription model — a sale Whitehurst described as a six figure deal.
Red Hat executives on the analyst call did not specifically identify which flavor of free Linux had been abandoned through that six-figure deal. Red Hat develops a free community version of Linux called Fedora, and there are numerous clones of Red Hat Enterprise Linux as well, including one called CentOS.
“This was not a compliance-related initiative,” Whitehurst said. “This was purely a getting the customer to understand the value of a paid subscription.”
Peters added that the free-to-paid win in the third quarter wasn’t the first such deal that Red Hat has had.
This article was first published on InternetNews.com. To read the full article, click here.
Huawei’s AI Update: Things Are Moving Faster Than We Think
FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA
FEATURE | By Guest Author,
November 10, 2020
FEATURE | By Samuel Greengard,
November 05, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media
FEATURE | By Rob Enderle,
October 16, 2020
FEATURE | By Cynthia Harvey,
October 07, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science
FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future
FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2020
FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI
FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality
FEATURE | By James Maguire,
September 09, 2020
Anticipating The Coming Wave Of AI Enhanced PCs
FEATURE | By Rob Enderle,
September 05, 2020
The Critical Nature Of IBM’s NLP (Natural Language Processing) Effort
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
August 14, 2020
Datamation is the leading industry resource for B2B data professionals and technology buyers. Datamation's focus is on providing insight into the latest trends and innovation in AI, data security, big data, and more, along with in-depth product recommendations and comparisons. More than 1.7M users gain insight and guidance from Datamation every year.
Advertise with TechnologyAdvice on Datamation and our other data and technology-focused platforms.
Advertise with Us
Property of TechnologyAdvice.
© 2025 TechnologyAdvice. All Rights Reserved
Advertiser Disclosure: Some of the products that appear on this
site are from companies from which TechnologyAdvice receives
compensation. This compensation may impact how and where products
appear on this site including, for example, the order in which
they appear. TechnologyAdvice does not include all companies
or all types of products available in the marketplace.