RHT - Red Hat, Inc. - Q2 2014 Earnings Call Transcript

    Company Name:Red Hat, Inc.
    Event Title:Q2 2014 Earnings Call Transcript
    Event Date:23-Sep-2013
    Event Time:05:00 PM ET



    Good afternoon. My name is Rachel and I will be your conference operator today. At this time, I would like to welcome everyone to the Red Hat Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions]. Thank you.

    I would now like to turn the call over to Tom McCallum Investor Relations Vice President. Sir you may begin your conference.

    Tom McCallum

    Investor Relations
    Thank you Rachel. Hello everyone and welcome to Red Hat's earnings call for the second quarter of fiscal 2014. Speakers' of today's call will be Jim Whitehurst, President and CEO and Charlie Peters, Executive Vice President and CFO. Our earnings press release was issued after the market closed today and maybe downloaded from redhat.com on the Investor Relations page.

    Also on this page, you will be able to find a historic reconciliation schedule of GAAP to non- GAAP financial metrics as well as scheduled currency rates. Various remarks that we may make about the company's future expectations, plans and prospects, including the statements containing the words believe, anticipate, plan, project, estimate, expect, intend or will constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Security Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in the company's most recent quarterly report on Form 10-Q filed with the SEC as well as the Safe Harbor statement in today's press release.

    In addition, any forward-looking statements represent our estimates or views only as of today September 23, 2013 and these estimates or views may change. While the company may elect to update forward-looking statements at some point in the future. We specifically disclaim any obligation to do so even if our estimates or views do change and therefore you should not rely on these forward-looking statements as representing our estimates or views as of any dates subsequent to today. With that, I would like to turn the call over to Jim.

    Jim Whitehurst

    President and Chief Executive Officer
    Alright. Thank you Tom and let me add my welcome to all of you on today's call. Our global organization executed at high level in the second quarter. This execution contributed to exceeding solid growth, innovation and financial results that exceeded the high-end of our guidance. The growth which was elevating Q2 comes despite an uneven global economic condition and currency volatility. We continue to be the leader in a OpenSource software, delivering new enterprise-ready technologies that we believe will drive transformation of the datacenter towards an open hybrid cloud infrastructure.

    Let me describe some of the highlights we achieved this quarter around these transformational technologies. First, Red Hat enterprise Linux OpenStack Platform and Red Hat cloud infrastructure that came generally available in Q2. These technologies offer customers a clear path to the open hybrid cloud. Both of these new offerings are built on the foundation of Red Hat's Enterprise class open source solutions, an large certified ecosystem and Red Hat's world-class support. Specifically, Red Hat Enterprise Linux OpenStack platform REL OSP is based on the grizzly version of OpenStack where Red Hat was the number one corporate contributor.

    As with the Linux Kernel project, we believe it to be successful in open source and organization needs to starts with the development community to demonstrate through its actions the value that it adds. We plan on continuing this strategy with OpenStack including the upcoming Havana release. In addition to hardening OpenStack technology for enterprise use and building a broad ecosystem to enable interoperability. We're rolling out training programs for OpenStack certifications. As we did with Linux we want this training certification program to be the gold standard for engineers and architects.

    We've seen strong interest in our real OpenStack platform early adopter program for POCs from financial services to federal sector and service providers. Common used cases range from self-service development environments, private cloud and high performance computing environment and the build out of public clouds for service providers. We believe that the cloud OS of the future is KVM, RHEV, RHEL and OpenStack. Second we recently launched Red Hat storage server 2.1 which combines the reliability and enterprise grade features of RHEL with the latest community releases including comprehensive OpenStack support.

    Red Hat storage server 2.1 is designed and tested to meet the performance and scale demand for enterprise storage workloads and leys the foundation for cloud and big data applications. Also in Q2, IDC published a report on the economic of software-based storage. In the report, IDC states that Red Hat opened software-defined storage servers can generate up to 52% in storage system savings and an additional 20% in operational savings. With Red Hat storage customers can capitalize on our enterprise technology to reduce overall storage cost at scale while breaking free from proprietary storage vendor lock-in.

    Third, building up the momentum of Red Hat Summit. We now have over 50 certified public cloud providers in the Red Hat certified cloud provider program. In addition to several regional cloud providers and industry-specific clouds, we also welcome CSC cloud compute to the program. Four, we are positioned by Gartner in the leader quadrant of the Magic quadrant for on premise application platforms for our solutions including Red Hat JBoss Middleware and OpenShift enterprise our platform-as-a-service offering. We're pleased with this recognition of our Middleware portfolio that support a wide range of application requirement ranging from silo style business applications to private pass as organizations transition to the cloud.

    Pass has only just started and tomorrow September 24th we will be making a major announcement on the direction of our PaaS technology. Paul Cormier, our President of Product and Technology will host a webcast that will lay out our strategic roadmap to deliver the industry's first set of next generation PaaS offerings. What is lacking today is a single comprehensive PaaS vendor that provides all of the PaaS services to help build true enterprise level applications. These applications need not only containers but also need integration, mediation, messaging, transformation, orchestration and process modeling.

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