Hats Off to Providing a More Open Source of Savings
Red Hat continues to add more companies to its list of success stories, which in turn are allowing it to grow its very stable revenue stream at a 19% clip. Red Hat's products and services are quite "sticky" since the firm will help companies transfer all of their operations onto their own platforms. Once it's there's its difficult to switch away, but this is especially true since red Hat does a great job of cutting costs and running customer applications with high availability and security.
It's hard to believe that a company that operates completely in the virtual space can be making so much money for its investors. Red Hat now generates over $600 million each quarter and continues to add new customers.
The growth is backed by the trend that customers are continuously looking for ways to cut costs and save money. Using open source products from Red Hat, they can drastically reduce costs, and Red Hat can still earn continuous income from support and services.
Take the company Sprint for example, which is a customer of Red Hat's, took on the company's proposition to switch to its platform. Sprint moves away from Oracle and IBM - the industry incumbents, who are struggling to find growth since nimble cloud companies have been eating away at their revenue streams. Oracle and IBM charged high licensing fees for their proprietary cloud applications, but switching to Red Hat's open source platform, cut down on much of the overhead costs. Sprint was able to switch over without having to change its physical servers, which is quite the accomplishment, and to upgrade all of its infrastructure.
Under the management of Jim Whitehurst, Red Hat continues to scoop up to customers, and smash away the incumbents in the industry with its more modern approach to software in the cloud.