Bad economy is a gift that keeps giving to Red Hat

Someone should tell Red Hat that the world has been muddling through a global recession for the past few years. While others' earnings went into a deep freeze throughout the recession, Red Hat has consistently posted strong numbers.

Red Hat's fiscal fourth-quarter 2010 earnings, announced on Wednesday, are no different. Does the company ever get bored of reporting double-digit growth and record billings?

Apparently not.

Red Hat notched its fourth consecutive quarter of exceeding analyst expectations for profits. Highlights from Red Hat's earnings include:

$195.9 million in total revenue, up 18 percent from the year ago quarter. … Read more

Red Hat CEO: Open-source economics key to innovation

At the inaugural Open Source Business Conference in 2004, the discussion centered on how to fund open source's survival. Just six years later, the OSBC conversation has taken a 180-degree shift to focus on whether proprietary software's shelf life is nearing its end as open-source software economics increasingly drive technology innovation.

What happened?

In a nutshell, the cost benefits of high-quality, free software came to outweigh the industry's former concerns about risks associated with "rebel code."

This trend, not visible in 2004, started with early adopters like Google. As Red Hat CEO Jim Whitehurst highlighted … Read more

If Novell gets bought, will Red Hat follow?

Elliott's proposed acquisition of Novell promises to shake up the software industry, which has grown a bit staid in the past year or two. But what will it mean for Red Hat, and for the broader open-source software industry?

In particular, Novell's acquisition might well spur a mergers and acquisitions revival, as Barron's notes. But will it create overwhelming pressure for Red Hat to sell, too?

Red Hat has been the subject of buyout rumors for well over a decade, but has never been particularly close to indulging the temptation, according to sources close to the company. … Read more

Novell's buyout and its effect on the industry

For years, Novell has served as an odd bargaining chip between Microsoft and enterprises looking to move to Linux.

Novell's Suse Linux distribution, while a distant No. 2 to Red Hat's leading Linux server business, has helped Microsoft keep some measure of control over its open-source competition--or, at least, to keep a close eye on it.

With Novell now up for grabs through a $1.8 billion buy-out offer from Elliott Associates, what is likely to happen to the Linux market, and to Microsoft, if it goes through?

The easy view is that Red Hat will benefit and … Read more

Open source: Still room for the little guy?

Open source started small, but it's increasingly looking like it's a game for big vendors to play.

That's because open source is all about scale, which is hard to attain as a small player. MySQL took 10 years, Red Hat wasn't much faster, and JBoss was also a long-term project.

Companies like IBM, Oracle, and even Microsoft find it much easier to get quickly to scale through their built-in communities.

There is no such thing as automatic community, of course, so we see companies (big and small, but mostly small) either latching onto existing communities and … Read more

When will Microsoft sue Google over Linux?

Microsoft once made the mistake of broad-brushing Linux as an intellectual property quagmire. It made Microsoft headlines, but few friends: lawyers didn't believe it, customers didn't want to hear it, and competitors dared it to sue.

Years later, Microsoft still hasn't sued, but instead plods away at convincing the world, one patent cross-licensing agreement at a time, that everyone, everywhere owes it money for alleged violations of its IP in Linux.

This week, Microsoft made its boldest move to date, signing yet another patent cross-licensing agreement with Amazon, calling out that this agreement allows Amazon to use … Read more

The key to Apple's success: Focus

Often we measure great companies by what they choose to create and sell. An even better measure, however, might be all that they choose not to be.

Apple rightly gets credit for building exceptional hardware and software. Even more impressive, however, is how Apple has steadfastly refused to get drawn into markets that it chooses not to service, even when would-be customers are begging to buy.

Take the enterprise. Sure, Apple has made forays into enterprise computing with its X-Serve server product and the hiring of a (small) enterprise sales force in the past few years, but the company has refused to take on Microsoft in that market, … Read more

The application is the new the operating system

If you're a Google Nexus One user, you experienced a bit of magic last week.

In one click of an over-the-air update, your Nexus One became an iPhone--offering the ability to pinch and expand the screen to zoom in or out.

Just one click, with little to no user intervention. That's what operating systems look like in the 21st century, a future more clearly playing out in mobile than in the more traditional realms of personal computers and servers.

Apple is leading the way on this, but application developers have been quick to pick up on the trend.… Read more

Thank heaven for Apple's (upward) pricing pressure

As the economy has stalled, prices have fallen to match the increasingly frugal moods of consumers and businesses. Only Apple seems largely impervious to gravity, consistently scoring solid earnings and rising market share, all while keeping prices high.

You don't have to be an Apple fanboy to be grateful for Apple luxury. We all benefit from it, even if we've never bought a single Apple product.

In economics, "anchoring" refers to a pricing strategy whereby a vendor sets a product's price high to create perceived value ("What a deal!") for other, lower-priced products, … Read more