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Red Hat Software

Submission + - Is Red Hat a software firm or a bank? (

SavioRodrigues writes: "My analysis of Red Hat's financial results indicate that nearly half of Red Hat's profits have little to do with their core software business...well, unless Red Hat recently picked up an investing banking division.

Over the past two years, 48 percent of Red Hat's income before taxes has come from "Other Income," specifically interest income and capital gains on investments. For comparison, "Other Income" drives well under 10 percent of Microsoft's, Oracle's, and IBM's income before taxes. I wondered if Red Hat's revenue base, (in the hundreds of millions vs. these other vendors whose revenue is in the billions), was a reason for the difference. So I selected Tibco Software, whose revenue base is within $100M of Red Hat's and was founded in 1997, two years after Red Hat. Only 12 percent of Tibco's total income before taxes comes from "Other Income." I tried to look at Novell, but they've gone through years of negative Operating Income, so the ratios don't compute."

Comment Re:Good first step... (Score 1) 118

>In fact RedHat makes over a billion dollars a year,

Just fyi but, Red Hat's trailing 12 month revenue is about $400M.

>else they risk dwindling mindshare.... and unltimately marketshare as well.

I've been keeping track of WebSphere's public growth figures. The WebSphere division competes vs. the JBoss product set. I think you'll agree that our growth has been well above the market and growing at such a rate from a base of several hundreds of millions is much more difficult than growing from a much smaller revenue base.

I do work at IBM (in the WebSphere division), so maybe I'm biased, but the financial results are difficult to argue with.

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