Open-source Linux doesn't pay, said no one ever at Red Hat

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Red Hat's sales jumped 14 per cent, year-on-year, in the quarter that ended May 31, thanks to contracts with government and cloud providers.

The GNU/Linux distro maker recorded US$481m in sales in its first quarter of its fiscal 2016 year, and a net income of US$48m, up 26 per cent on the year-ago period.

The 44 cents per share earnings edged out analyst estimates of 41 cents per share prior to the release of the figures. GAAP operating income for the quarter was US$71m, up 39 per cent over the previous year's quarter.

Subscription fees accounted for most of Red Hat's haul, totaling US$425m. Of those fees, Red Hat said 75 per cent came through the channel, while the remaining quarter were direct sales. The North Carolina biz noted that many of the sales were to government agencies, while the Red Hat Certified Cloud Provider program brought in $5m of subscription fees.

"This strong growth reflects in part the demand for our open, hybrid cloud technologies across four footprints: bare metal, virtualization, private cloud and public cloud deployments," CEO Jim Whitehurst said in releasing the figures.

"Red Hat's portfolio of technologies becomes increasingly strategic to customers who are looking to expand their capabilities and agility to build and deploy applications across these data center footprints."

The company also talked up its investment in OpenStack, an effort Whitehurst expects to begin paying out for the company in the coming months.

"People are still trialling it, it's still smaller," he told analysts. "You will start to see it ramp up as we go through this year." ®

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