Red Hat, Inc. (RHT)

5Yr Gross Margin (5-Year Avg.) 83.4 54.5 47.0-Double that of S+P 500. Great alternative to Microsoft software. Open source softare from Redhat is free, but the company is making big money on it.

5Yr Gross Margin (5-Year Avg.) 83.4 54.5 47.0-Double that of S+P 500. Great alternative to Microsoft software. Open source softare from Redhat is free, but the company is making big money on

Stock will surpass it's 2006 high when investors realize earnings are on the rise

Growth is nice with this company, but they have greatly increased spending, and killed their income. With the addition of Oracle as a support competitor, and the publicity for Novell's SUSE linux, I think this company will see its revenue growth slow down. It already looks overvalued.

The hype about Linux is going away. As Linux is moving away from a niche solution and becomes fully capable operating system the issues traditionally associated with Microsoft Windows begin to creep in. Instability, lack of centralized management and monitoring all begin to play bigger part.

redhat is well recognized in its industry. while the misconception is that redhat sells free stuff, they actually sell support. large corporations are used to pay for support so what they see is that their specialized servers that can run the same software without upfront cost or lower maintenance with responsive supplier just give them slight edge over running on microsoft. i see shift in the datacenters in this direction.

another shift that i've observed - is from unix environment to linux - where software is relatively easy to convert and linux will run on most hardware. having just one flavor of linux/unix in the enterprise makes the noc more efficient and cheaper to run

one area that makes running competing products expensive - is the constant updates. eventhough all major companies now provide scheduled releases to make it cheaper to plan for company-wide upgrade, to my knowledge only linux is currently planning development that would allow full upgrade and internal reboot of the kernel while leaving the applications running - this will elliminate downtime due to upgrades and will make it more attractive in five-nines environment

the adoption is now trickling down to midsize companies as well as some small companies. linux provides cheap file system storage in places where normally a domain controller running on windows would have to be deployed.

there is downward pressure from oracle announcing that they'll undercut redhat but oracle support is less than satisfactory and having to choose, you do get what you pay for and large companies that do have relationship with both redhat and oracle do not see switching to less than desirable support for their redhat linux enterprise servers

The days of packaged software and periodic licensing are gone - well soon gone. LINUX will pervail, as companies and governments change to open software. And it has already started - - - do a survey.

Everyone is, or should be, well aware of the benefits of linux over windows:

1. Most versions of it are free, and companies such as Red Hat make their money through o/s support.

2. It's much less buggy. I'm not sure why (although I know it has something to do with the differences in the source code), but linux has a well deserved reputation as a rock solid operating system.

3. The differences in code structure between windows and linux make windows inherently more susceptible to virus attacks than linux. If a user is not logged into a linux o/s as the root (or administrator), it is almost impossible to implant a virus into linux. Not so for windows. Some 40 viruses have been written for linux, while we all know how many are out there for windows...

Everyone touts Oracle's version of linux as being superior to Red Hat's, but that is not the case, at least in the short term. Red Hat has been certified by SAP and IBM, while Oracle's version has not. That's not to say that Oracle will not follow suit, but it takes a while for the operating system to be developed and certified. Meanwhile, Red Hat is adding customers at the rate of about 15,000 per quarter which, by the time Oracle gets their version certified, will be a very strong customer base indeed.

As for those people who think that the competition will kill Red Hat, consider the increasing popularity if linux as a whole versus Windows. There is an old saying - "A rising tide rises all the boats." I believe that linux is a superior operating system, and will eventually dominate windows, although this will take a long time. However, I believe things are only going to get better for linux from here on out, as linux gains on windows incrementally over the next two decades.

Red Hat has began to solidify its strategy to offer Linux as a solid choice to replace MS Windows. It is clearly ahead of Novell in the race to create a solid performing non-windows based platform.

Buy and Hold. Linux will continue to grow. Red Hat has brand name.

I'm an it techie, and i've been following RHAT and linux for quite a while.

I was a RHAT stock owner some time ago and I'll buy some again now. I don't expect short term gains, but the ORCL support for linux is actually a good thing. It can only mean an increased linux adoption and RHAT will in the end benefit from that since it's the household name in linux. IT people will always prefer rhat support on rhat products.

The HW & SW industry will pick Redhat as the common platform- the Ebay and Cisco of the Enterprise system. Intel, AMD, HP, Dell, & IBM want to spend low $$ certifying a Linux distribution guaranteed to work with their products. Netapp, Hitachi EMC, nVidia, Emulex, Broadcom, other hw component makers will do same. Software vendors like SAP, Oracle, VMWare, IBM, & SAS need to pick at least 1 Linux distro to certify to. RHAT is the dominant (>80%) choice & is in bed with all of these companies. ***********
Other distributions of Linux (Novell, Ubuntu, Debian, now Oracle) are different compiled code that a) will be unsupported or not certified by one of the HW/SW vendors you need to have support from in your processor-system-OS-application stack, and b) have no advantages besides subscription cost over RHAT.
************
IT directors at every company will keep their jobs if they pick RHAT. The cost of a RHAT Linux subscription per server- say $1k/yr, pales in comparison to revenue that is riding on these machines and other SW licenses. Perversely, the fact that if RHAT _really_ screws up, end-user companies can switch to another Linux distribution, makes it _safer_ to choose RHAT because, in the end, you can’t be screwed. Unlike M$.
*************
It is this HW/SW nexus that makes RHAT growth inexorable. I am ex-RHAT product management- left because they keep their costs down and don't give lots of stock options (and I got a better offer). Oracle can't insert itself into this nexus. NOVL has tried and failed. The costs and disruptions to a HW/SW vendor of moving to a poorly supported distribution, and the risks to the end-user IT director are just too great.
******************
This same logic built M$ and Sun/IBM/HP servers into huge revenue. But, RHAT is cheaper & more flexible than M$, and RHAT is the choice of OS that runs on all vendors' commodity AMD/Intel hardware.
***************
Just like 1 Cisco and 1 Ebay are enough to satisfy >75% of their markets, there is room for 1 enterprise Linux distribution.

From the perspective of a software industry insider, I believe this company is at the forefront of a movement toward open source and away from proprietary vendors. Red Hat is well-positioned to benefit, both in the short and long term and appears to have figured out a successful business model for marketing an open source solution. In addition, this economic downturn may actually accelerate profits for Red Hat.

Badly beaten up. I think an over-reaction. As an Ubuntu user, I'm overly-biased toward linux and have been waiting for Redhat to get cheaper. While expect things to get worse before getting better, I think linux is a long-term here-to-stay platform.

RHAT has been beaten down a lot recently as a perceived slowdown in purchases, a high multiple and variable analyst ratings. Working in the Tech industry, I continue to see a pick up in spending, and believe RHAT is well positioned to take advantage of this. The next quarter's results will be a good indication of performance for the coming 12 months.

Undisputed leader in commercial Linux that values its ties to the open source community. As open source gets more popular, Red Hat will get more business.

Treats employees and customers very well. A very high percentage of support calls are solved by the first person to pick up the phone.

Oracle and Novell are taking undue toll on RHT stock right now; the actual impact on Red Hat's business is minimal. Customers want to stay with them because they are good. As long as they have a competitive product and back it up with some of the best support in the business, they will succeed.

Also acquiring businesses that support their primary business. JBoss will help them to continue to be competitive with interoperability versus Novell/Microsoft. These people are building a business to last the ages.

RHEL5 launches in Feb with GFS and Virtualization - poised to take market share from VMware. Will also compete head to head with Windows Vista. JBoss acquisition complete, and businesses have merged - Red Hat Application Stack. Market leader for disruptive Linux technology; WW growth.

Rhat's operating system is highly regarded. I bought this stock last year when it was beaten down to $13 per share. I think it will find bottom around $18 this time and move up from here.

I just think they are undervalued.