The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. I guess on their last call, IBM said they felt like they'd seen a bottom in the server shipments and stuff like that. Do you agree? Do you have any (inaudible) on that?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: And then, on kind of the drivers for subscription, one of the questions has been virtualization as a driver for adoption of maybe the advanced platform and kind of higher price subscriptions. Have you guys seen that? Has your -- have you seen a trend in higher price deals?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. Were there any questions from the floor, or I'll keep going. So,youmentionedthereleasecomingupwithKVM.Couldyoutalkalittlebitabouthowyouviewvirtualizationasanopportunity? Is it incremental revenue driver? Is it part of the OS? What's Red Hat's stance on that?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay, great. Anybody who has a question, just raise your hand whenever. Unidentified Participant How does that offering really compare with (inaudible) four and (inaudible), and how do you compete, because of their installed base and the whole nine yards?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Is your view -- and we've seen, kind of depending on whether they have an OS or not -- do you view the Hypervisor as a feature of the OS?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: And then, on JBoss, so it seemed like a couple years ago, and really over the last couple years, you've essentially re-launched, that you've kind of changed the development methodology and you've updated the channel strategy. How far along are you in terms of the rollout to the channels? And then, you've talked about growing roughly twice the Linux business in the past. Is that something you expect to continue for an extended period for JBoss?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. Twice the growth rate of Linux, or not (inaudible)?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Do you see, though, the key points for JBoss either kind of more joint selling with the RHEL platform, or is it channel development and [SIs] and that type of thing?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Do you see much joint cross-selling, or has that been an [added] thing?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: And then, a last one on JBoss. The OEM channel, that's traditionally been a big app server channel. I don't think you guys have talked about it as much, or -- is that an opportunity, going forward?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: But, what about third-party ISVs as a--?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. Unidentified Participant Charlie, can I ask you a question on VMware's acquisition of SpringSource? You guys are a [UCS] partner (inaudible). Doesn't it seem like it's (inaudible) now between IBM, HP, Juniper against Cisco on the other side? You guys are kind of in the middle between VMware and Red Hat. How do you navigate that when things like SpringSource come up?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Looking at the market footprint, you guys have the app server, and that's continued to grow in terms of functionality. Do you see other middleware, broadly speaking, whether it's BI, data integration -- I think you launched a project there -- as significant growth drivers over the next couple years, or is that a longer-term area you might focus on?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. Following up on [Ted's] competitive question, there has been a lot of movement, both with Cisco and then, obviously, with Oracle buying Sun. Does that impact you guys in terms of go-to-market? Does it create an opportunity for customers, kind of like when BEA was bought by Oracle, of people moving off of Sun?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. We have time for one more, so if nobody -- okay, so I'm contractually obligated to ask about [Cloud] these days. So, when you look at Cloud Computing, I know everybody says it's a great opportunity. I guess my question, though, is, is it an incremental opportunity, and is there some risk that, as you go to a Cloud model, that the consumers of software IT consolidate down and, therefore, become -- get greater purchasing power?
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
Question: Nabil Elsheshai - Pacific Crest Securities - Analyst: Okay. Well, thank you very much for joining us today, been very informative, and thank everybody for attending.
Answer By: Charlie Peters - Red Hat, Inc. - CFO and EVP
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