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Red Hat looks at New Zealand for further open source growth

Red Hat has become the first open source company to exceed $US1 billion in annual revenue

Red Hat has become the first open source company to exceed US$1 billion in annual revenue.

The 17-year-old software vendor posted revenue of US$1.13 billion for its fiscal 2012 year, up 25 percent over the previous corresponding year. Non GAAP adjusted net income for the year was US$216.4 million.

"The bulk of the $1.13 billion was done on the subscription model, which proves the level of adoption of open source," says Craig Neilson, Red Hat New Zealand general manager.

Red Hat opened an office in New Zealand a year ago.

Neilson won't comment specifically on the local financial results but says 82 percent of the top 130 organisations in New Zealand are Red Hat customers.

"This high penetration shows that New Zealand organisations are early adopters of open source generally," he says.

"We're seeing a very strong demand in the financial, telco and government sectors, particularly for our middleware portfolio (JBoss).

"Most IT budgets are under huge pressure to reduce costs. Proprietary middleware is still some of the most expensive parts of budgets.

"We're talking about making really large cost savings, both in capex and opex."

Neilson says Red Hat continues to invest in New Zealand and is growing its headcount. He won't give exact numbers but says all major functions are covered.

The company has four Advanced Business Partners in New Zealand: Datacom, Gen-i, Solnet and OSF. "We plan to double that number within the next nine months.

"Then we have our global ecosystem, which includes IBM, Hewlett-Packard, Dell and Cisco."

Red Hat also has more than 40 smaller companies signed up to its Ready Partner Programme. "We're working very strongly to help those parties accelerate their ability to deliver solutions."

Open source is now an assumed part of the enterprise, he says. "We have very few discussions with customers about managing these types of platforms."

Neilson, who has been with the company for six years, was previously Asia Pacific and Japan director for Red Hat's OEM business.