NEW YORK (TheStreet) – Enterprise software giant Red Hat (RHT) will report fiscal third-quarter results Thursday. And investors who still regard Red Hat as just a Linux software company aren't paying attention.
The company's results will be released Thursday after the markets close. And shortly thereafter, I will interview CEO Jim Whitehurst to discuss the results and learn how he plans to maintain Red Hat's status as the global leader in OpenStack -- the new frontier in cloud services.
In 2014, the Raleigh, N.C.-based company built up its capabilities in three areas: cloud computing, otherwise known as hosted or remote data processing, storage and management; software-defined storage, which allows customers to quickly create, delete and manage data stored within the cloud; and middleware, the software that lies between an operating system or database and software applications.
Last year, the middleware market grew 5.6% to $21.5 billion and was dominated by IBM (IBM) , which captured close to one-third of global spending, according to research firm Gartner. Oracle (ORCL) and Microsoft (MSFT) followed in second and third place, respectively.
Red Hat, meanwhile, continues to differentiate its products from Oracle and Microsoft. So far, things are moving according to plan. Unlike the two industry titans, Red Hat is able to allow project teams working within a company or remotely to simultaneously collaborate on client applications, as well as cloud applications and services. Neither Oracle or Microsoft offer customers those capabilities.
In the most recent quarter, Red Hat's middleware segment also accounted for 16% of its fiscal 2014's subscription growth. This is important.
"Growth accelerators will ultimately more than offset the inhibitors in the BPM [business process management] and middleware market, creating faster growth over the next five years than the growth experienced by the market over the past two years," Maureen Fleming, vice president of middleware research programs at IDC, recently stated in a middleware market study that covered 2009 to 2018.
She noted, however, that the potential for major disruption in the middleware market is significant, particularly in the later years of the nine-year forecast. Red Hat is expected to be part of that disruption, which makes the company such a compelling story.
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