Red Hat’s first quarter revenue results announced Wednesday illustrate the success of the company’s 2012 growth strategy – taking business-focused positioning of core technologist strengths in application development and management into net-new markets for Red Hat, most recently hybrid cloud.

As customers seek to manage, consolidate, and orchestrate heterogeneous environments, Red Hat (NYSE: RHT) has the ability to meet targeted business needs in multiple segments.

We maintain that Red Hat’s executive focus on “land and expand” as a sales strategy for the current year will maximize the effectiveness and efficiency of Red Hat’s sales and marketing investments to date – establishing product-led footprints within a customer environment and extending Red Hat’s reach into that customer’s data center and cloud across coming quarter\.

TBR estimates that Red Hat will drive in excess of 15 percent year-to-year growth across CY2013 by expanding current cross-selling of cloud, virtualization and big data to its core Linux and middleware install bases.

We maintain that Red Hat will continue to invest in its extensive open source developer community to drive development around its OpenShift Enterprise, Storage, and Enterprise Virtualization solutions.

Furthermore, TBR believes the company will make targeted acquisitions in CY2013 to bridge its core portfolio products to its new addressable markets that will help the vendor drive enterprise penetration, such as its middleware integration software for mobile and cloud technologies built out of Red Hat’s 3Q12 acquisition of FuseSource.

Increasing its focus on the data center – as shown by Red Hat’s increasing partnership with Intel – will drive growth for Red Hat through stickier “landings”

Red Hat is positioned for revenue gains in CY13, courtesy of a perfect storm of portfolio growth and proven technology expertise.

Red Hat’s expanding partnership with Intel creates further momentum for data center management and access – which, dovetailed with Red Hat’s rising focus on subscription sales, promises net-new access for Red Hat to enterprise customers that see Intel as a key ally in data center consolidation.

Red Hat’s portfolio – marrying software infrastructure, system agnosticism, and heterogeneous management products – is positioned to appeal to customers seeking low-impact ways to consolidate and orchestrate environments that have on- and off-premise needs and complexities.

Editor’s note: Elizabeth Hedstrom Henlin is enterprise software analyst with Technology Business Research in Hampton, N.H.


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