Trending: Microsoft closes record year with $110B in revenue, cruising past Wall Street expectations again

(Red Hat Photo)

Red Hat remains one of the longest-running successes in open-source enterprise software, and while it might be facing upstarts from new places, it remains positioned to cash in on a wave of IT modernization among technology laggards.

For the first quarter of its 2019 fiscal year, Red Hat reported a 20 percent jump in revenue to $814 million and a 27-percent jump in non-GAAP earnings per share to $0.72 cents a quarter. Both those measures exceeded Wall Street expectations as measured by Yahoo Finance, but the stock market dinged the company in after-hours trading on the backs of weaker guidance for the upcoming year and a slower-than-expected rise in bookings for the upcoming quarter.

In an interview with GeekWire after the release of the results, Red Hat CEO Jim Whitehurst said the company has been focusing on signing customers to longer-term deals, which means fewer companies were up for renewal this year. That allows companies to save a little money on a per-year basis while giving Red Hat a dependable revenue stream, but makes growth in bookings look smaller, he said.

Just last week, Docker CEO Steve Singh touted his company’s march toward triple-digit millions in bookings, which is an imperfect measure of software revenue but isn’t meaningless, either. He cited Red Hat and Pivotal as his company’s biggest competitors, and while that didn’t surprise Whitehurst, he suggested Docker had a ways to go before it was truly threatening his company’s OpenShift container-management business.

“We just don’t see them quite as much,” he said, referring to competitive bidding situations in which enterprise companies look for a container-management partner. Part of that can be chalked up to the fact that Docker has only been truly serious about this market for a little over a year, while Red Hat has been working with enterprise companies for decades, but that could change as older companies look to containers as a way to modernize their application-development strategies.

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