Leading provider of open source solutions, Red Hat Inc. (RHT) recently unveiled a new developer subscription program called JBoss Developer Studio.
Per the new program, Red Hat JBoss middleware products will be available for download to members of the JBoss Developer community. They can develop their own applications using the same and that too without a fee. However, non-developmental usage will require the payment of subscription charges.
Meanwhile, in order to extend support to its developer initiative, Red Hat recently unveiled a refresh of the JBoss community website, which in turn is expected to be a one-stop solution for enterprise solutions. Currently, the website has more than 289,000 users.
We believe that the addition of thses facilities by the company will surely help developers to arrive at solutions more efficiently and in less time. This will drive top line growth going forward.
Red Hat continues to gain market share and its Linux servers are well positioned to compete with Microsoft’s (MSFT) Windows servers in the enterprise market. We believe that the company has significant growth potential in the public cloud segment over the long term.
Additionally, Red Hat’s strong product pipeline, continuing investments to expand product portfolio and partnerships with the likes of International Business Machines (IBM), Dell and Intel (INTC) will drive overall growth.
However, sluggish IT spending and intensifying competition are the major headwinds in the near term. Also, Red Hat’s strategy of sacrificing service revenues to increase subscription revenues in the long run is expected to hurt top-line growth over the next couple of quarters. This coupled with negative margin impacts from the acquisitions will be an overhang in the near term.
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