Monday December 10, 8:08 am ET
Jefferies & Co. Analyst Downgrades Red Hat on Challenges From Competing Technology
NEW YORK (AP) — A Jefferies & Co. analyst downgraded Red Hat Inc., saying competing technologies are nabbing market share and could hurt profit growth, as the software maker deals with rivalry by making acquisitions.
Katherine Egbert in a client note cut her rating on Red Hat to “Hold” from “Buy” and reduced her target price to $19 from $23.
Red Hat will have to work to diversify its business away from its Red Hat Enterprise Linux products, which are based on open-source software, Egbert said. That’s because newer virtualization technologies, which allow businesses to use different computer operating systems on a single server, are replacing Linux servers as companies work to cut costs, Egbert wrote.
Often new servers are shipped with a key competing product from VMware Inc., which is cutting into Linux market share, she added.
But Red Hat is diversifying through acquisitions and could step up this process, Egbert said, which could eat into earnings potential.
This is total bullshit for lack of a better term. What in the hell does VMware have to do with Red Hat? They are new and coming into the Virtualization space! VMware actually allows OS vendors to sell more licenses!
Let’s see here “virtualization technologies, which allow businesses to use different computer operating systems on a single server, are replacing Linux servers as companies work to cut costs” … what the fuck!? So you’re running different operating systems … what operating systems might they be? Windows (costs money), more Linux? Probably! They’ll be running other operating systems … just less computers!
Anyone else with any input on this?[ad#ad-1]