Red Hat Gives Hope to Software Industry

Software companies have been sweating it out throughout the recession, experiencing sweeping drops in earnings at almost every level. Red Hat, which is the world’s largest Linux software provider, has finally shown that a software company can be profitable right now, posting a 7 percent increase in profit this last quarter.

Experts outside and within the company credit Red Hat CEO James Whitehurst for maintaining the company’s profitability. The former Delta Air Lines executive rigorously cut costs across the board, a skill he says he acquired in his days working in the airline industry. His strategic slashing of expenses has allowed Red Hat to stay in the clear for now.

Compared to larger companies like Microsoft and Oracle, Red Hat is doing especially well. Software industry leader Microsoft has witnessed a 32 percent drop in net income over the past year, and Oracle recently released that its profit has fallen 7 percent. Red Hat, on the other hand, has maintained all of its major clients with the exception of Oracle, which ended its dealings with Red Hat when it began selling a rival product.

Red Hat (Image: Flickr)