Number crunching

Some intriguing data behind Red Hat's 29 percent growth

Red Hat continues to impress. Coming off its already-strong first quarter and higher guidance for its fiscal year, Red Hat announced on Wednesday 29 percent year-over-year growth for its fiscal second quarter and 5 percent growth over its first quarter.

Total revenue for its second quarter hit $164.4 million. Both revenue and profit came in above analyst expectations.

This was the first time in years that Red Hat's second-quarter billings exceeded its first quarter billings. Not bad for a company that gives away free software.

Importantly, Red Hat appears to be doing longer-term deals, as its total deferred revenue balance was $496.9 million, growing 32 percent year-over-year and 1 percent sequentially. This would suggest that Red Hat customers are increasingly comfortable making a long-term bet on Red Hat's future. Indeed, on the analyst call, Red Hat Chief Financial Officer Charlie Peters indicated that the average booking for Red Hat is 24 months and that 36 percent of its subscriptions are for a term greater than one year.

In selling longer-term deals, Red Hat is successfully blocking competitive pressure from Novell, Microsoft, and other companies that might want to cut into its accounts.

On the earnings call, Peters and CEO Jim Whitehurst identified several key trends:… Read more

Red Hat is the top Linux kernel contributor, but what about Canonical?

No surprise, but Red Hat remains the top corporate Linux kernel contributor, as reported by SDTimes. As I've reported before, Red Hat is the top Linux contributor by a wide margin, with IBM, the next biggest corporate contributor, coming in nearly seven percentage points behind Red Hat.

Greg Kroah-Hartman, a Novell employee and prominent Linux kernel developer, recently called out Red Hat's contributions (good) but has taken far too much time to criticize Canonical, creator of the popular Ubuntu Linux distribution, and its apparent dearth of contributions (not-so-good).

Mark Shuttleworth defends Canonical's contributions to Linux, and I … Read more

Universal Music finally admits that digital isn't evil

Ars Technica has the dirt on an admission from Vivendi CEO Jean-Bernard Levy: digital music downloads might not be evil, after all.

Just in case you don't know, Universal Music Group--one of the Big Four record labels--is a wholly owned subsidiary of Vivendi. So this is a big deal.

As Ars Technica reports, Universal's music business is up 3 percent, halting a long-term slide toward oblivion:

Digital, of course, is the big driver of better economic performance. At Warner, for instance, it made up 20 percent of total revenues in the second quarter and generated 39 percent more … Read more

Who runs Ubuntu? The list keeps growing

Despite 96 percent of surveyed CIOs claiming not to run Ubuntu internally, there is a long and growing list of companies that do, with or without the CIO's knowledge. Works for U is compiling a list of Ubuntu-loving companies. Make your Ubuntu adoption heard. Add to the list now.

Join the club:

This is just a small sample of the list. Head over to Works for U for the complete list, and to complete the list with your company's information.

Apple's US laptop share hits 10.6 in the second quarter

Despite IT spending hitting the skids, according to Forrester, Apple's US laptop market share hit double digits for the first time, leaping from 6.6 percent market share in Q2 2007 to 10.6 percent market share in Q2 2008, as The Register details.

Yes, it's only the laptop market, but as more and more of the market shifts to portables...this is good news for Apple, indeed.

Globally, Apple's overall share is not as rich, at a reported 3.3 percent, in part because its European market share still sags at 5.5 percent. Net Applications, … Read more

Survey: 96 percent of enterprises not deploying Ubuntu server

Goldman Sachs September 2008 IT spending survey delivers a sobering blow to suggestions of the rise of Ubuntu:

The enterprise isn't seeing it yet.

I've seen indications of Ubuntu adoption within customer surveys that Alfresco and others have done, but this survey of 100 IT executives from a range of Fortune 1000 companies suggests that perhaps the Ubuntu revolution still has a ways to go to make it in the stodgy old enterprise.

Granted, with CIOs representing 48 percent of survey respondents, and vice presidents of IT representing another 33 percent, we're unlikely to get a very good view of grassroots IT adoption. … Read more

Report: IT spending to drop, but Red Hat and Oracle to clean up

Goldman Sachs has delivered some bad news for IT vendors.

In its "Independent Insight: U.S. Technology Strategy" report released Monday, Goldman Sachs predicts that IT spending growth in 2008 will drop to 4 percent from a former projection of 6 percent and that pricing pressure on vendors is going to get worse.

The good news, however, is that Goldman Sachs doesn't see IT spending levels dropping to their 2001-2002 or 1990-1991 levels due to more rational IT spending from 2003 to 2007. In other words, we have don't have as far to fall. The even better news if you're open-source vendor Red Hat? Shrinking IT budgets are your friend.

Where will IT dollars likely go? According to Goldman Sachs, hardware spending has likely already been cut as much as it's going to be, leading enterprises to look to save money with internal IT staff cuts and lower spending on services. Services, however, are more likely to be cut for onsite services, with 50 percent of Goldman Sachs survey respondents indicating that they will be cutting services budgets: offshore services are expected to remain relatively strong.

Not everyone is losing out in the downward economy, of course. Goldman Sachs sees growing enterprise interest in Apple's iPhone, for example. Software, too, may be a moderately bright spot:

In general, indications of software spending are marginally better than for overall tech spending, while indications for spending with Oracle looked better still. Linux is still making headway in the enterprise, with our responses showing Red Hat's dominance may actually be growing. A first read showed a meaningful proportion [21 percent] of respondents planning to test Google apps, a negative for Microsoft longer term.

Oracle is succeeding, with 35 percent of survey respondents indicating that they plan to increase Oracle spending, because it can aggressively cross-sell its vast product portfolio at a low customer acquisition cost, while Red Hat and Google are winning because they offer superior value propositions. Unfortunately, Novell isn't seeing the same open-source bounce as Red Hat.… Read more

Sun learns from failures, sets out to shake up storage industry

Sun Microsystems has spent years getting bludgeoned by commodity hardware and software. Now it's planning to apply those painful lessons to its competitors in the storage industry, as highlighted by The New York Times reporter Ashlee Vance:

In the early part of this decade, Sun learned all too well just how disruptive ("good enough" technology at a significant discount) can be. Customers moved away from products built on Sun's own custom microprocessors and software to cheaper servers that relied on Intel processors and the open-source Linux operating system. While larger customers still wanted Sun's high-end … Read more

Hulu beating out YouTube in the video monetization?

I never expected Hulu to work out, but according to ReadWriteWeb's review of a recent report from LiveRail, it may actually be doing better than YouTube in terms of online video monetization.

Why? Because Hulu is apparently able to sell ads against 100 percent of its video inventory, while YouTube is struggling to hit 3 percent. User-generated video content, it would appear, is not nearly as lucrative as selling advertising against professionally-generated video content....

Hulu has better content, and higher quality of video, even though it has far less overall content. According to LiveRail, Hulu hosts 88 million videos, … Read more

Microsoft's Office Live snares only 1 million users

For many companies, one million users is a big deal. For Microsoft, however, it's a rounding error.

As reported by The Register, Microsoft announced that it has managed to attract one million users from "schools, businesses and home[s]" to its Office Live Workspace Beta experiment, which allows people to run scaled-down versions of its popular Microsoft Office products online. For those skeptical of Microsoft's excitement at moving people off its lucrative desktop monopoly, well, you're right to be so.

Microsoft has little interest in a world without a strong desktop theme, as Techcrunch suggests. … Read more