I can't knock the bear who insists on raising this point. Management needs to sort this part out. Margins can't continue to contract and then expect concerns about valuation to go away. Investors will want to know what they're paying for.
But given Red Hat's solid beat on the top and bottom lines, I'm now willing to look slightly the other way.
It was certainly encouraging that Red Hat's CEO, Jim Whitehurst, didn't appear too concerned about the companies competitive situation. In an interview with TheStreet's Chris Ciaccia, Whitehurst cited (among other things) Red Hat's plans to enter new categories including Open Shift and Open Stack. He also noted:
"The power of Open Stack is that it has massive participation. It has everyone from Microsoft to VMware (VMW), to Hewlett-Packard (HPQ) to us participating in it. An industry is coalescing around an open source standard. There's a lot of momentum and a lot of interest in Open Stack, but it's still early days."Follow @saintssense This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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