For those wondering whether Oracle or Red Hat is weathering the recession best, this week may have settled the question. On Tuesday the market cheered Oracle for only seeing a 5.2 percent drop in revenue, with a 7.2 percent drop in profit (absent the strong dollar, Oracle would have seen a 4 percent increase in revenue and a 5 percent increase in profit).
Red Hat? Well, on Wednesday Red Hat announced fiscal first-quarter revenue of $174 million, up 11 percent from the prior year. Subscription revenue was up 14 percent year over year to $148.8 million. The company’s total deferred revenue balance is now $567.3 million, an increase of 15 percent on a year-over-year basis. Net income for the quarter was $18.5 million.
Both Oracle and Red Hat are doing well, and Oracle is obviously dealing with much bigger wads of money, but it seems clear that Red Hat’s open-source model is the big winner in the recession.
In fact, on Red Hat’s earnings call, Chief Executive Jim Whitehurst indicated: “Budgets remain tight and we don’t see an end in sight for this. In relative terms, this is pretty good for us.”