In A Very Competitive Cloud Market, How Is Red Hat Succeeding?

Photo Credit: Sankarshan Mukhopadhyay

Red Hat (RHT) – Information Technology – Software | Reports December 17, after the close

Key Takeaways

Red Hat, the worldwide leader in open source technology will be reporting fiscal 3Q2016 earnings results on Thursday after market close. The sentiment on the street is mostly positive, as just last week several top analysts at different firms raised Red Hat’s price target. Shares have been hovering around the $77-78 range, but analysts are expecting both earnings and revenue growth by 10% and 14%, respectively. The company has trampled Wall Street expectations in both revenue and EPS the past eight quarters and is expected to do the same this quarter. The Estimize consensus has predicted EPS of $0.48 and revenue of $523.3 million as compared to the Street’s $0.46 per share and revenue of $521 million.

Red Hat, one of the pioneers in the open source platform world has been making a plethora of improvements to its services. First of all, the company is making noise in the cloud, and is on the right path in terms of providing a solid support base and a cost friendly platform which includes applications, middleware, desktop domains, and an operating system.

The company recently made its Red Hat Enterprise Linux (RHEL) available on Microsoft’s Azure cloud and has made support available for Microsoft Azure on its CloudForms hybrid cloud management system. The Raleigh, NC based multinational corporation currently brings in a meaty $100 million in revenue from cloud subscription services alone. Microsoft couldn’t defeat Red Hat, so ultimately, the two powerhouses began to work together. The integration with Azure and RHEL will almost certainly add to that $100 million revenue figure.