Red Hat

Red Hat is a provider of GNU/distributions, Linux as well as solutions virtualizations software and middleware for corporate customers.

Red Hat has a stack of technologies and products for creating cloud infrastructures for various purposes (private, public, hybrid, for corporate customers and for IT service providers, for government and commercial structures). At the same time, the company does not focus only on its own solutions, collaborating with all key IT suppliers (VMware, Microsoft, SAP, etc.), participating in the development and practical application of leading open projects (in the cloud direction, this is OpenStack).

Activities in Russia

Main article: Red Hat Russia and CIS

Acquisitions of companies

Main article: Red Hat takeovers

History

2023: Lay off 4% of employees worldwide

On April 24, 2023, Red Hat announced a restructuring, during which the number of employees will decrease by about 4%. This is a necessary measure due to the current macroeconomic situation and the crisis in the IT market.

The reorganization was announced by Red Hat CEO Matt Hicks. According to him, the reduction in the number of personnel is necessary to ensure competitiveness in the new environment and maintain the efficiency of business processes. As of the beginning of 2023, the company had about 20 thousand employees on a global scale. Thus, as part of the restructuring of employment, approximately 800 people will lose. Layoffs will primarily affect general and administrative positions, while employees in sales and development departments will not be affected.

Red Hat fires 4% of employees worldwide

Like any company, Red Hat has limited resources and our investments, including in the workforce, must be in line with our strategy. At the heart of the decision to reduce the number of employees is the need to balance our investment to ensure the future of Red Hat. It will be difficult for all of us, but there is no other way to solve the problem, "Hicks wrote.

The dismissed employees will be provided with comprehensive support. They will receive severance pay above the market, health insurance for a period of three to six months, depending on the length of service, as well as various bonuses. In addition, Red Hat will offer a specialized assistance program that will simplify employment in a new place. Outside the United States, layoffs will be made in strict accordance with local law. The staff reduction program, as specified in the official notification, will be implemented within a few months.^[1]

2022: Mat Hicks' appointment as president and CEO

Red Hat has announced the appointment of a President and CEO. Matt Hicks, who previously served as Red Hat's vice president of products and technology, has been appointed head of the company. This became known on July 13, 2022. Read more here.

2021: Partnership with ISG Neuro

The Russian company ISG Neuro, the developer of the open source analytical platform OT Platforma, announced on August 3, 2021 that it had partnered with open source solutions provider Red Hat. Thanks to the agreements reached, ISG Neuro products and solutions will now be delivered based on the most current Linux distributions supported by Red Hat. Read more here.

2020: Paul Cormier is Red Hat's new CEO

On April 6, 2020, Red Hat announced the appointment of a new CEO and president of the company. It was Paul Cormier, who succeeded Jim Whitehurst. Read more here.

2019

The company oversees the OpenJDK 8 and OpenJDK 11 projects

On April 19, 2019, it was revealed that Red Hat, a global open source solution provider, would be curating the OpenJDK 8 and OpenJDK 11 projects after Oracle took over the leadership role in those projects. Read more here.

Revenue growth by 15% to $3.36 billion

In fiscal 2019, Red Hat's revenue reached $3.36 billion, an increase of 15% compared to 2018. If we do not take into account fluctuations in exchange rates, then the company's sales jumped by 16%. The company's fiscal year ends on February 28.

software American The vendor earned $2.95 billion on the sale of subscriptions to its vendor following the results of the 12-month reporting period closed on February 28, 2019 of the calendar year. Compared to the previous year, this business added 15% and brought Red Hat about 88% of turnover.

Red Hat financials

As part of the subscription business model, most of the revenues come from infrastructure software, whose annual sales increased by 9% to $2.1 billion. The implementation of subscriptions to software used to develop applications and other "developing technologies" increased by 31% to $816 million.

According to the head of Red Hat Jim Whitehurst, the total number of customers who have active subscriptions to the company's products in the amount of more than $5 million by the end of February 2019 increased 33% compared to the same period in 2018. This rise was due to the solutions of Ansible and OpenShift, which have 1300 and 1000 customer companies, respectively.

Red Hat Executive Vice President and CFO Eric Shander drew attention to a 17 percent increase in the number of transactions in the amount of $1 million, despite a decrease in the customer base concluding large contracts to continue working with the company's products.

In 2019, Red Hat recorded total orders of $4.1 billion, which is 22% more than a year earlier. The volume of orders has increased by more than one fifth three years in a row, which "reflects the dynamics of the company's business," said Shander.

Red Hat's net profit in fiscal 2019 reached $434 million, up 65% from a year earlier.^[2]

Warren Buffett buys $733.4 million in Red Hat stock

In February 2019, Berkshire HathawayWarren Buffett announced ownership of 4.18 million Red Hat shares worth $733.4 million. After the disclosure of this information, Red Hat securities rose 0.3%. Read more here.

2018

Record number of contracts for $1 million

In fiscal 2018, which ended on February 28, 2018, Red Hat's revenue amounted to $2.9 billion, an increase of 21% compared to the previous year. If you do not take into account fluctuations in exchange rates, then sales increased by 20%. The company has entered into a record number of contracts worth from $1 million.

The company's net profit increased slightly - from $253.7 to $258.8 million - largely due to a one-time payment of $123 million due to tax reform in the United States.

Red Hat year totals: Record number of contracts worth from $1 million

In Red Hat's annual revenue structure, revenues from software subscription sales reached $2.57 billion versus $2.14 billion a year earlier. Various kinds of services and services, including technical support and training, brought the company revenue in the amount of $346.3 million. During the reporting 12-month period, the volume of orders from Red Hat increased by 24% and exceeded $3.4 billion.

Subscription sales brought the vendor about 88% of revenue, and most of these revenues come from infrastructure software, whose sales increased by 15% to $2 billion. The implementation of subscriptions to software used to develop applications and other "developing technologies" jumped 42%, reaching $624 million.

Commenting on the financial statements, Red Hat CEO Jim Whitehurst said that the company ended the year on a major note, bringing its revenue to an annual level of $3 billion. Also, the top manager noted a 50 percent increase in the number of contracts worth more than $1 million, which was facilitated by "strong cross-sales and a large number of contract extensions in the best transactions." In 2018, the number of transactions in the amount of $1 million reached a record 373 units, of which 54 orders had a volume of more than $5 million.

On the day Red Hat reported its 2018 financial and operating results, the company's shares rose more than 5% in extended trading after the exchange closed.^[3]

IBM bought Red Hat for $33.4 billion

On October 28, 2018, IBM announced the acquisition of Red Hat for $33.4 billion. This deal for the buyer will be the largest in history and should help him become the world's largest cloud solution provider - at least IBM itself is counting on it.

Under the terms of the agreement, IBM will pay $190 for each Red Hat share from its own funds (without transferring its shares, but with debt financing), which is 63% more than the exchange closing rate on October 26, 2018. By that time, the market capitalization of Red Hat amounted to $20.5 billion, and IBM - $113 billion. In the previous five years, IBM had lost nearly a third of its market value, while Red Hat, by contrast, gained 170% over the same period.

IBM will redeem all issued ordinary shares of Red Hat at $190 apiece, the total amount of the transaction will exceed $34 billion

The deal is scheduled to close within 12 months of its announcement. As soon as this happens, Red Hat will become a separate division within the IBM Hybrid Cloud structure. The company sold will continue to develop open source services and adhere to its own strategy, IBM promised. Jim Whitehurst will retain the post of CEO of Red Hat, he will report directly to IBM head Ginny Rometty. Red Hat's headquarters, brands, practices and development centers will remain.

IBM is going to suspend the share buyback program in 2020-2021 to help pay for the purchase. Before the merger, the companies collaborated for about 20 years, according to a press release.

The acquisition of Red Hat is a game-changer. It changes the whole situation in the cloud market, "says Ginny Rometty. - Obviously, we make this purchase to increase synergy. It's not about cost synergies at all.

According to the head of IBM, the deal will turn her company into a "world leader in hybrid cloud" technologies compared to most competitors, forced to "rent 80% of computer capacity to reduce costs."

Bloomberg Intelligence analyst Anurag Rana believes the takeover of Red Hat makes IBM "an authoritative player in the cloud services market - both private and public." In addition, the corporation will receive "an asset that looks not backwards, but forward," the expert added.

Knowing firsthand how important open hybrid cloud technologies are to help companies unlock the value of their business, we see great opportunities in combining these two companies, "said Jamie Dimon, CEO of JPMorgan, which advised IBM in this deal and provided funding.

The Barclays merger of IBM and Red Hat was the "culmination of the companies' existing partnership" and allows IBM to acquire a "strategically important asset to advance its hybrid cloud initiatives," analysts said. To maximize the effectiveness of the IBM deal, it is important to maintain Red Hat's neutrality towards operating systems, as well as maintain its position as a multi-circuitous and open () Open Source company, Barclays is confident.

As the Reuters news agency notes, the sale of Red Hat to the corporation IBM shows how old technology companies go to the conclusion of deals in order to increase the volume of their business and resist competition, which is especially acute in the cloud market. IBM hopes through this purchase to catch up with Amazon, Google and Microsoft in the fast-growing cloud market.^[4]

Citigroup Research analyst Jim Suva sees the acquisition of Red Hat as a signal to investors that IBM 's position in the cloud market is currently not as strong as the company claimed.

2017: Record contract and revenue growth over 15 years

In late March 2017, Red Hat released its annual report. In it, the company reported continuous revenue growth over 15 years and the largest contract in its history.

In the 2017 fiscal year (closed on February 28, 2017 calendar year), Red Hat's revenue amounted to $2.4 billion, which is 18% more than a year earlier. Sales of the company increase 60 quarters in a row, the report notes.

Revenue Breakdown by Red Hat Product, Fiscal Year 2017 Data

Net profit rose to $253.7 million from $199.4 million in fiscal 2016. The total amount of cash, as well as its equivalents and investments as of February 28, 2017 was measured at $2.1 billion.

Annual revenue from subscriptions to infrastructure products amounted to $1.7 billion, which is 15% higher than a year earlier. Revenue from product subscriptions related to application development and new technologies amounted to $439 million, which is 36% more than a year ago. The business is Red Hat's fastest growing.

For the first time, Red Hat's annual turnover from subscription sales software exceeded $2 billion, amounting to $2.1 billion, which corresponds to 89% of the total turnover.

Eric Shander, Acting Chief Financial Officer of Red Hat, noted that in fiscal 2017, the number of contracts worth $1 million or more from the company increased by 30%. A record number of transactions of more than $20 million was also recorded, among which was an agreement for the largest amount in the vendor's history - about $100 million. Who exactly made such a deal with Red Hat is not specified.

In digital transformation, customers choose Red Hat as a strategic partner and solution provider to realize the full benefits of these new initiatives. Enterprise customers and service providers are increasingly using hybrid cloud infrastructures and open source software to grow Red Hat in both the current and long term, said Red Hat CEO Jim Whitehurst.

2016

Revenue of $2 billion

On March 22, 2016, Red Hat reported record revenue in fiscal 2016, helped by strong demand for open source software and cloud solutions.

According to data released by Red Hat, for the 12-month period ended February 29, 2016, Red Hat's revenue amounted to $2.05 billion, which is 15% more than a year ago. Net profit during this time increased by 11% to $199.4 million.

Red Hat year results: revenue exceeded $2 billion for the first time

The growing use of hybrid cloud infrastructures and open technologies in the enterprise sector has allowed us to achieve excellent results. The company's revenue has been growing for 56 consecutive quarters and last fiscal year for the first time exceeded $2 billion, "comments Red Hat CEO Jim Whitehurst. - Customers need new technologies to develop, deploy, and manage application lifecycle in hybrid cloud environments. At the same time, many of them choose Red Hat infrastructure solutions and development platforms to ensure reliable and consistent operation of enterprise applications in virtual, physical, as well as private and public cloud environments.

In fiscal 2016, Red Hat sold $1.8 billion worth of software subscriptions, up 18% from a year earlier. The share of subscription revenues in revenue was 88%.

During the reporting period, Red Hat earned about $1.48 billion on the sale of infrastructure products, which is 12% more than in the previous year. Revenue from product subscriptions related to application development and other new technologies jumped 37% to $323 million.

At the end of fiscal 2017, Red Hat predicts adjusted profit (excluding irregular expenses and income) in the range from $2.22 to $2.26 per share on revenue of $2.38-2.42 billion. Wall Street expects financials at $2.19 per share and $2.36 billion, respectively.^[5]

Despite earnings and a forecast above analysts' expectations, Red Hat shares were down 2.6% on the day the financial data was released. From March 1 to March 22, 2016, the company's quotes increased by 16%.

Promotion of open solutions in telecom together with Ericsson

November 1, 2016 it became known about the creation of an alliance with Ericsson. The cooperation of companies involves the promotion of open source solutions in the telecommunications industry. Read more here.

2015

Revenue growth of 17%

On March 25, 2015, Red Hat published a financial statement in which the company reflected its performance in the 2015 financial year. Both profits and revenue for ON the American open-source maker rose despite the high rate. dollar^[6]

In the 12-month reporting period ended February 28, 2015, Red Hat's net profit was $180.2 million against $178.3 million a year earlier. Revenue for this period rose to $1.79 billion from $1.5 billion, where most ($1.56 billion; + 17% on an annualized basis) came from sales of software subscriptions. Various kinds of services and services, including technical support and training, brought the company revenue of $228.3 million.

Red Hat revenue up for 52nd straight time in fiscal fourth quarter

In the fourth fiscal quarter, Red Hat's revenue jumped 16% compared to a year ago, reaching $463.9 million. This quarterly rise in sales was the 52nd in a row, said Charlie Peters, executive vice president and chief financial officer of Red Hat.

He also drew attention to the record order book (backlog) of $1.86 billion recorded by Red Hat in fiscal year 2015 and grew by 19% compared to the previous reporting year. According to Peters, the company achieved successful results in the fourth quarter and at the end of the year despite unfavorable fluctuations in exchange rates. The American Red Hat receives about half of its income from international activities.

Red Hat ended fiscal year 2015 with an operating cash flow of $623 million, an increase of 15% on an annualized basis. By February 28, 2015, Red Hat had about $1.81 billion in accounts in the form of cash and cash equivalents, as well as short-term investments.

Along with the publication of the financial report, Red Hat announced its intention to redeem its own shares in the amount of $500 million. The previous $180 million bayback program will expire on March 31, 2015. As of February 28, 2015, 183.5 million shares of the company were outstanding.

Cloud Subscription Sales Growth

In April-June 2015, Red Hat increased subscription sales by 14% compared to the same period a year ago - to $425 million.

The company has become Microsoft's main Linux partner in the cloud market

On November 4, 2015, Microsoft announced a collaboration with Red Hat in the cloud market, thereby continuing to support the Linux operating system.

As part of the agreement, Red Hat Enterprise Linux will be available to Azure users. This is not the first Linux distribution compatible with Microsoft's cloud platform, however Enterprise Linux will be a priority for Azure enterprise clients. They will be able to run virtual machines running Red Hat Enterprise Linux and applications like JBoss Web Server and OpenShift in the Microsoft cloud. The details are here.

2013

Increase in the number of employees to 5.7 thousand

Red Hat revenue for fiscal year 2013 amounted to $1.33 billion.

The number of Red Hat employees is also growing exponentially: in 2012, about 1 thousand specialists were hired, so a total of 5.7 thousand of them. The hiring plan for 2013 is 600-800 people. In addition, the company is active in the M&A plan: it acquired a number of developers in 2012, including a deal to buy Manage IQ for $104 million.

Revenue growth plan to $3 billion in 2016

In April 2013, Red Hat CEO Jim Whitehurst announced that his company plans to triple its revenue to $3 billion by 2016.

When asked whether an increase in revenue to $3 billion is possible, the head of the company replied: "I am still positive about this."

Having earned $3 billion per year, Red Hat will compare in revenue with such companies as, for example, Salesforce.com, which just in 2012 showed comparable revenue to the first of the cloud vendors. A rather significant chance remains that by the end of fiscal year 2014, Red Hat's revenue will reach $2 billion.

Recall that Red Hat is the only open source software vendor in the world who managed to achieve revenue of $1 billion, however, the ambitious Whitehurst promised $3 billion in revenue just in 2011, when Red Hat earned its first billion dollars.

2012: Revenue of $1 billion

Red Hat became the first open-source software vendor to generate $1 billion in revenue per year. According to the company's financial statements for the fiscal year 2012, which ended February 29, annual revenue amounted to $1.13 billion, which is 25% more than a year earlier. The company's net profit is $146.6 million, in 2011 it amounted to $107.3 million.

Reaching the billion-dollar milestone is a weighty argument for the viability of the open-source industry. "Few companies have been able to achieve such results," said Jim Whitehurst, CEO of the company. "This indicates what we were able to achieve by adhering to a completely different business model from other vendors," he added.

Thus, Red Hat joined the league of medium-sized enterprise software manufacturers, including, for example, players such as OpenText ($1 billion in 2011) and Nuance Communications ($1.3 billion).

Mark Shuttleworth, founder of one of the Linux distributions, Canonical, noted that "the success of Red Hat is a reflection of the company's contribution to the popularization of Linux and the continued transition of enterprises to open source software."

2011: Revenue growth of 21%

At the end of fiscal year 2011, Red Hat's revenues amounted to $909.3 million and increased by 21.5%, and net profit - $107.3 million, which is 23% more than in fiscal year 2010.

According to Red Hat CFO Charlie Peters, 57% of sales were in America, 27% in Europe and the Middle East and 16% in the Asia-Pacific region. This ratio was roughly the same throughout the year.

Among the company's solutions Red Hat Enterprise Linux (distributed by annual subscription) and (Fedora distributed freely), as well as other open source software products and services, including Linux the GNU/( POSIX) application compilation and execution environment for the OS - Microsoft Windows Cygwin, as well as:

• Red Hat Enterprise Server and Red Hat Enterprise Desktop distributions,
• Integrated virtualizations Red Hat Enterprise Virtualization,
• Red Hat Directory Server,
• Red Hat Cluster Suite,
• JBoss Enterprise Application Platform,
• open information system JBoss Enterprise Business Rules Management System to support the business rules of the company,
• open software solution JBoss Enterprise SOA Platform, which allows you to build service-oriented enterprise architectures,
• open portal solution JBoss Enterprise Portal Platform, which can be used as a web interface for an employee's access to corporate data and applications, as well as a platform for creating web applications with a convenient user interface.

Red Hat and JBoss products are used in large corporate and government IT infrastructures around the world, including to support vital business processes.

2008:31% revenue growth

Red Hat's revenue for fiscal year 2008 reached $523 million, 31% higher than revenue for fiscal year 2007. The company's net profit for the year was $76.7 million. The company's capitalization in 2008 amounted to $2.87 billion.

Among the services provided by the company are 24x7 continuous technical support, training of system administrators and developers, taking practical laboratory exams RHCT (Red Hat Certified Technician), RHCE (Red Hat Certified Engineer), RHCDS (Red Hat Certified Datacenter Specialist), RHCSS (Red Hat Certified Specialist) and RHCA (Red Certified Specialist). Red Hat products are certified by leading hardware and software vendors (IBM, HP, Dell, Oracle, SAP, and many others).

The main direction of the company's business development in 2008 was the development of the middleware platform JBoss for building SOA. According to plans announced by CEO of the company Jim Whitehurst, by 2015 JBoss will be able to meet 50% of the market's needs in ^[7].

2007: Net income - $59.9 million

• Turnover - $400.6 million
• Net income - $59.9 million

1999: Public Offering

When Red Hat launched its IPO in 1999, the idea of making money on open-source software had yet to be tested by time. Although even then open source software was actively used by academia and the technical industry, enterprises were cautious about using such programs, expressing doubts about their safety and quality of support.

The basis of the Red Hat business model is free programs, the customers of which are further offered paid support for industrial-level systems. Later, many other companies began to adhere to this model, from Eucalyptus, Alfresco to Jaspersoft. Large vendors like Oracle, IBM and Dell also provide some of their software on an open basis.

1995: Founding of the Company

The company was founded in 1995 by Bob Young and Marc Ewing. The main business is the supply of open source solutions with their technical support, as well as training and consulting services to clients around the world.

Notes