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Red Hat CEO: Oracle/BEA Deal Is Helping Us

Business continues to be good at open source vendor Red Hat despite the economic slowdown in the U.S. Part of the good times at Red Hat are the result of new product introductions that are helping to grow revenues and part comes from the actions of others, in particular Oracle.

During Red Hat's first quarter fiscal 2009 conference call, Red Hat CEO Jim Whitehurst outlined his company's financial performance and credited the Oracle acquisition of BEA as being a driver for Red Hat's revenue growth.

Red Hat's first quarter fiscal 2009 ended on May 31. Revenues at the Linux vendor for the first quarter of fiscal 2009 hit $156.6 million, which represents an increase of 32 percent over its first quarter fiscal 2008 performance.

On the net income side of the books Red Hat (NYSE: RHT) reported $17.3 million or 8 cents per share which is an improvement of 7 percent over the $16.2 million reported for the first fiscal quarter 2008.

"The Oracle/BEA acquisition has led to some dislocation," Whitehurst said on a conference call. "I'm not saying that there is anything wrong with the way the acquisition happened but as you move to fewer players in the space clearly there are going to be people bumping into each other and people will look around and this is certainly proving to be to our benefit."

Oracle successfully won its bid to acquire middleware vendor BEA in January. Red Hat's JBoss middleware division competes against BEA for enterprise deployments. Oracle also competes against Red Hat on the Linux platform with Oracle selling its own flavor of Red Hat Linux called Oracle Unbreakable Linux.

Whitehurst noted that overall the JBoss business is growing well and new products such as the JBoss SOA platform, which was released earlier this year already part of six figure sales deals.

Red Hat also released the JBoss Operations Network (JON) and using RHEL, though Whitehurst did not materially break out the specific impact that the NYSE deal had on Red Hat's financial performance.

Overall Red Hat's CEO sees his company moving on the right track and isn't afraid of the larger macro-economic issues that are currently affecting the US economy.

"Government and telco verticals are very strong for us," Whitehurst said. "Our customers read the papers like everyone else so folks are nervous but that said the pipeline is strong, especially for JBoss."