Red Hat Joins the Billion-dollar Club - hernandezplingers

It's official: Red Hat is the basic ASCII text file software company to generate a million dollars in annual revenue.

Red Hat released its financial results Wednesday for its 2012 fiscal year, ended February. 29. Gross was US$1.13 billion, up 25 percent from the year earlier, and net was $146.6 million, up from $107.3 million the year earlier, Red Hat said.

Extremely the $1 billion milestone is "a statement active surface source, and the relative ubiquitousness of open source. Very few companies feature been able to hand over that mark," CEO Jim Whitehurst same in an interview. "It's quite a statement that we've been fit to reach that with a radically different business organisatio model."

With a jillio or more in annual revenue, Red Hat joins a somewhat elite league of midsized enterprise software system companies, such as OpenText ($1 billion in 2011) and Nuance Communications ($1.3 billion).

"The million-dollar chassis is a rather a magic figure for technology companies," said Charles King, chief analyst at Pund-IT. Though an arbitrary milepost, it's a better index that the company executives have found a chemical formula not only for success, but for maintaining success.

Possibly more significantly, Red Chapeau's success validates the idea that open-source package can form the basis of a viable business manakin.

"Red Chapeau's achiever is a testament to the role it played in bringing Linux to the mainstream, and the continued shift towards open source in the enterprisingness," aforesaid German mark Shuttleworth, founder of familiar Linux distributor Canonical, in an email exchange.

When Red Hat held its IPO (Initial Public Oblation) in 1999, the idea of making money from ASCII text file software was not a proven concept. Although open-source software package was widely used and so away academics and the technically inclined, enterprises were still wary of using the software, citing security fears and the need for holding a vendor accountable when something goes wrong. And investors would ask how a company could make money giving away the source code of its software system at no cost.

"Consensus among many in the IT community [and then] was that open source was a goofy, post-hippie kind of thing," King said.

Red Chapeau's basic line of work model consists of fashioning the source freely obtainable, and then charging subscription fees for enterprise-grade support. Today that model is copied–albeit on a smaller scale–by a wide range of open-source software companies, such as Eucalyptus tree (for cloud computing software), Alfresco (content management software) and Jaspersoft (business intelligence). Large IT vendors, such arsenic Prophesier, IBM and Dingle, routinely provide much of their software as unfastened origin. Even the populace's largest proprietary software vendor, Microsoft, has unfit its toes in the water supply, releasing some of its ancillary code as spread source on its Codeplex repository.

"Today, we'atomic number 75 at a place in IT where online collaboration is such a broadly accepted concept," King said."Blood-red Hat is an extremely well-run keep company, and collaborative development is paying off for everyone in the ecosystem," said Jim Zemlin, enforcement director at The Linux Foundation. The company is one of the largest contributors to the source computer code of the Linux kernel, he known. "It is this commitment to collaborative development that is one of the key ingredients to its winner."

Joab Jackson covers enterprise software and general technology break news for The IDG News Service. Follow Joab connected Chirrup at @Joab_Jackson. Joab's electronic mail address is Joab_Jackson@idg.com

Source: https://www.pcworld.com/article/469494/red_hat_joins_the_billiondollar_club.html

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