Red Hat's number one

Microsoft will get the headlines tomorrow with the release of Windows 7, but on the server side of life, Red Hat is quietly becoming the dominant player. Don't think that Microsoft doesn't know that. I find it fascinating just how many of Windows 7's best business networking features, like DirectAccess and BranchCache, require you to also have Server 2008 R2.

While Microsoft, as always, wants to tie down your desktop, laptop and server to Windows, Red Hat is continuing to show that an open-source, open-standards Linux server company can deliver the IT goods to business customers. Besides owning the lion's share of the Linux server market, Linux's overall share of the server market continues to grow. According to the latest IDC Worldwide Quarterly Server Tracker numbers, despite the fact that everyone in the server biz's revenue is taking a hit, Linux server revenue actually continues to grow. It's now up to 13.8% of all server revenue — which, in practice, means that Red Hat is continuing to gain on Windows' server revenue lead.

You don't have to take my or IDC's word for it. The stock market agrees. On October 19th, 2009, at the end of the NASDAQ day, Red Hat's share price was $28.46 with Microsoft lagging behind it at $26.36. Yes, that's right. Red Hat's shares were worth more than Microsoft.

Anyone still think you can't make money from open-source?

So why do people turn to Red Hat? As it happens, the 2009 "CIO Insight Vendor Value" study, which polls IT executives on the overall value they see from their vendors, just came out, and it answers the question nicely.

More than 650 IT executives agreed that Red Hat's software and services' overall value was outstanding. Red Hat tied with Google for the top spot. This, by the by, was the fifth time that Red Hat had claimed at least a share of the number one spot.

CIOs aren't loving Red Hat because they think Linux is cool or Windows is evil, CIOs are buying Red Hat because they see it as delivering reliability and value. And bottom line time, Red Hat Enterprise Linux and related products meet their expectations for increasing revenues and lowering costs.

As Jim Whitehurst, Red Hat's president and CEO, explained in a statement, "In light of the current economic climate, Red Hat is well-positioned to address our customers' needs with high-quality solutions that deliver performance, reliability and scalability -- all offered at a price that helps the bottom line. As the trusted leading provider of open source solutions we aim to respond to customer demand with our proven value proposition."

And what do CIOs make of Microsoft's offering? They rate the boys from Redmond and their goodies at #6. Microsoft had better hope that their paired offering of Windows 7 and Server 2008 R2 is pretty darn compelling; otherwise, their combined cost is going to make sure that Red Hat stays number one as far as businesses are concerned.

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