Red Hat (RHT) Analyst Day's 5 Key Takeaways - William Blair

William Blair analyst, Jason Ader, attended the Red Hat Summit and analyst day in San Francisco last week and offered five key takeaways:

1) Red Hat is positioning itself as the go-to vendor for enterprises looking to deploy software containers—the key product here is OpenShift, a one-stop-shop platform for container-based application development and deployment, which could eventually become a $1 billion product for Red Hat;

2) Red Hat’s evolution from a single product company selling Linux support to a company offering a portfolio of open source software (OSS) has elevated Red Hat’s strategic importance with customers, raising deal sizes and positioning the company to reach $5 billion in revenue in five years;

3) OSS continues to gain broad momentum in the enterprise due to its ability to drive innovation and lower costs; Red Hat remains uniquely positioned to commercialize OSS technology based on its organizational experience and expertise, and its Linux dominance (the platform on top of which most other OSS products are built);

4) public cloud migration creates long term uncertainty for Red Hat’s business and customers in the near to medium term will look at their IT environments with a hybrid cloud lens (mix of workloads in public and private clouds), favoring consistency and portability in their operating systems (and thus continued RHEL adoption);

5) management remains focused on balancing top-line growth with investments in emerging technologies, with the goal of gradually improving operating margins over time (though no specifics were given)

Outperform Red Hat (NYSE: RHT)

For an analyst ratings summary and ratings history on Red Hat click here. For more ratings news on Red Hat click here.

Shares of Red Hat closed at $71.99 yesterday.

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