Red Hat Crosses $2B in Revenue as OpenStack Cloud Grows
Red Hat announced its fourth quarter and full year fiscal 2016 financial results on March 22, becoming the first pure-play open-source vendor to generate over $2 billion in annual revenue.
The move to cross the $2 billion threshold comes just four years after Red Hat recorded its first $1billion year back in 2012.
For the fourth quarter, Red Hat reported revenue of $544 million, up by 17 percent year-over-year. Full fiscal 2016 revenue was reported at $2.05 billion, for a 15 percent year-over-year gain.
Net income for the fourth quarter came in at $53 million, up from $48 million in the fourth quarter of 2015. For the full year, net income was reported at $199 million, which is up from $180 million in 2015.
Looking forward, Red Hat provided full fiscal 2017 guidance for revenue to be in a range of $2.380 billion to $2.420 billion.
RedHat's Move to the Cloud with OpenStack Paying Off
Among the biggest shifts since 2012, when Red Hat reported its first billion-dollar year, has been the company's move to the cloud with OpenStack. Red Hat in the last four years has also increasingly grown its overall deal size and cross-selling activities as well.
Red Hat CEO Jim Whitehurst said during his companies earnings call that over 90 deals in excess of $1 million were closed in the fourth quarter alone. Cross-selling of multiple products from the Red Hat portfolio is also strong, with 80 percent of the deals including one or more components from Red Hat.
"Our emerging cloud technologies are also gaining traction in our top deals, including a multi-million dollar win for OpenStack that we expect will be one of the largest installs of OpenStack once it’s fully implemented," Whitehurst said.
Whitehurst also commented that in his view, hybrid cloud deployment, where there is both public and private options, will be a positive growth driver for Red Hat's business. In particular he noted that OpenStack is moving from proof of concept to real deployments among Red Hat customers, including Cox Enterprises, Union Bank and FICO.
Supporting Red Hat's OpenStack efforts is a large training push. Whitehurst said that Red Hat trained over 10,000 customers on OpenStack in calendar 2015 alone.
During the earnings call, Whitehurst was also asked about competition in the OpenStack space, and specifically about Mirantis, which has announced some significant wins in the telco market.
"Mirantis is still primarily a services company, and a lot of people will experiment with a little bit of services to play around with the technology," Whitehurst said.
"So I don’t see the market is us versus Mirantis necessarily in Telco now," Whitehurst continued. "I think a lot of people are playing around with professional services, and when they get ready to implement an enterprise product, I think we’re incredibly well-positioned to win those."
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