Red Hat will forever be known primarily as a Linux company, but increasingly “cloud computing” is becoming a bigger business driver for its open source solutions.

That point was made even more clearly Thursday when Red Hat (NYSE: RHT) disclosed it would pay $104 million in cash for privately held ManageIQ, which focuses on the cloud.

The Hatters announced the deal just moments after disclosing another good quarterly earnings report.

However, a new analyst report from Goldman Sachs chilled some of the increasing cloud hype.

“We continue to see Red Hat as offering a solid product portfolio as the company waits for its emerging secular growth opportunities to start to drive material deal signings,” Goldman Sachs analyst Heather Bellini said, according to StreetInsider.com.

“As such, we believe the key to Red Hat’s organic billings growth potential in the next 12-24 months is more tied to the company’s core products, with optionality as these newer areas start to gain traction. While we expect the stock can continue to move higher near-term, we believe a re-rating of the multiple will be dependent on the ability of the company to get back towards 20% billings growth.”

Goldman Sachs maintains Red Hat as a “neutral” recommendation.

In a conference call Thursday evening with analysts, Red Hat Chief Executive Officer Jim Whitehurst and Chief Financial Officer Charlie Peters talked about the “cloud” as a business driver and the significance of the ManageIQ deal.

“Today’s big news for Red Hat is the cloud — in the cloud management space is the acquisition of ManageIQ, a developer of cloud management software that enables the operational management of cloud and virtual infrastructures across public, private and hybrid clouds,” Whitehurst explained.

“ManageIQ brings an adaptive and integrated approach to important cloud management capabilities such as server and storage provisioning, workload optimization, policy-based compliance, charge-back, virtual machine life cycle management, discovery and control and analytics.”

While all the talk about hybrid clouds, virtualization and such may drive non-geeks nutty, businesses worldwide are rushing to the cloud to save money and improve performance. Red Hat sees ManageIQ helping it continue to drive its bid to build clouds that rely on open source solutions.

“ManageIQ’s offerings can manage heterogeneous environments including Amazon EC2, VMware, Microsoft and Red Hat,” Whitehurst said. “It has proven itself in large-scale production deployments. ManageIQ’s technology combines well with the direction that we are headed in developing cloud management for open hybrid clouds.”

Peters also, very succinctly, described later on business trends moving Red Hat’s way, including an interesting reference to Windows. 

Kash Rangan with Bank of America posed the questions. The transcript was provided at SeekingAlpha.

“Charlie, I hate to disappoint you, so I have to ask you the same question that I keep asking you. Of all the levers you’ve had in this RHEL 6 product cycle, the components being RHEV, the ASP uplift you get from pricing, the free to fee, the JBoss, what surprised you the most this quarter relative to how these levers played out in the last quarter?

“And also, if I could, if you don’t have the time, that’s okay, we can pass. But Jim, if you could comment on the video management capabilities that you have acquired with ManageIQ. Part of me says this is — has the potential to be a really big deal.

“You have companies like VMware that are launching big cloud suite with significantly higher ASPs [application service providers]. The management component of virtualization, just more broadly speaking, managing your operating system instances, is a option that you guys have not really talked about, and this is a huge, $15-plus million [billion?] industry.

“Could this really be the beginning of RHEL 7?” [Note Red Hat Enterprise Linux is Red Hat’s big seller, and version 6 is the latest, still relatively new, release. And IBM just gave RHEL 6 a potentially big boost with a supercomputer/high-powered server endorsement.]

Peters:

“Thanks, Kash. Let me take the first in terms of levers driving the business. I think, Kash, still the same levers. UNIX to Linux migration continues unabated.

“As I said this quarter, the top 30 deals, 3 of the top 30 deals were public cloud providers. So cloud is driving it.

“Linux is growing faster than Windows, and we’re seeing some Windows to Linux move. Free to pay is still moving along.

“The large deal traction was very strong.

“On the pricing side, the gradual move over time of people from RHEL 4 and RHEL 5 to RHEL 6 and its slight change in pricing has a very moderate change quarter-to-quarter.

“All those things are still having a positive impact on our business. I’ll ask Jim to answer your question about the ManageIQ acquisition and his comments.”

Whitehurst:

“Yes. ManageIQ, again, I’d certainly hope you’re right.

“We actually do see a sizable opportunity there as people look to move to these hybrid cloud models, and the ability to do management discovery charge-backs, all those components, is a sizable opportunity.

“Obviously, we’re in very, very, very early days of that. So we’re very excited about the technology. It is a fantastic group of people we’re bringing onboard. So we are excited about it.

“I think it’s too soon to call it something like the next RHEL.

“But again, we do think it’s a big opportunity, not just directly in that space but also to bring along our other set of products.”

Whitehurst’s 5th Anniversary

Earlier in the call, Whitehurst noted that this month marks the fifth anniversary of becoming Red Hat’s CEO, and he took time to praise his employees.

“On a personal note, this month marks my fifth year here at Red Hat as CEO. As I look back, I’m impressed by the tireless contributions from Red Hat associates around the globe. The business has more than doubled in that time, while our opportunity in the data center has continued to increase immensely. I’ve never been more excited about Red Hat’s position and the opportunities in front of it. I want to thank each of our Red Hat associates for making it happen.”

[RED HAT ARCHIVE: Check out 10 years of Red Hat stories as reported in WRAL Tech Wire.]