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Red Hat


CEO Jim Whitehurst said the company has been so successful in open source software because of its vast army of engineers and because it places support behind its releases.

"We have a team of engineers that are behind supporting open source, and we are able to monetize the support and customer service," Whitehurst said in an interview Tuesday.

Red Hat CEO Jim Whitehurst

"Red Hat has been successful in open source where others have not because when we release a new system every two years, we pledge to support it for 10 years," Whitehurst noted.

The Raleigh, N.Cc-based company reported


earnings Monday that beat Wall Street estimates; it also raised fourth-quarter and full-year guidance.

On the conference call following the release of the earnings, Red Hat said it expected fourth-quarter revenue in the range of $289 million to $292 million. It expects earnings of 26 cents to 27 cents a share. Wall Street's current consensus view is for a profit of 26 cents a share in the quarter on revenue of $292.5 million.

For its full fiscal year, Red Hat now sees earnings of $1.07 to $1.08 a share. The average analysts' view is for profit of $1.05 a share.

Whitehurst said Red Hat was "scratching their heads" when looking at the market reaction -- the stock fell 8% in after-hours trading Monday night, and the selloff continued Tuesday, down 9.3% to $41.74.

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"We're pretty happy with the result, the performance was extremely strong," he said.

Shares are down 7.7% year to date.

Whitehurst was very positive on Red Hat's $136 million acquisition of cloud storage company


. "We think it

Gluster is really the only good solution for cloud storage," he said.

Gluster is different from other data solutions in that it does so in a low cost, open source manner. He noted that operating margins will be hit in 2012 as the company invests in Gluster, but he thinks the acquisition will be accretive in the long run.

When asked about Europe, Whitehurst said "the pipeline looks strong," and that he had not seen a lot of headwinds out of the region. He did note that southern Europe is a bit more challenged than northern or central Europe.


Written by Chris Ciaccia in New York

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