Latin America becomes the fastest growing region for Red Hat in fiscal 2Q09

Thursday, October 2, 2008

Latin America was the fastest growing region for US Linux operating systems integrator Red Hat (NYSE: RHT) during the second quarter of fiscal year 2009, ending August 31, Red Hat's Latin American marketing manager Martín D'Elia told BNamericas.

According to the executive, one of the reasons why Latin America recorded the fastest growth was the good level of IT adoption and the faster decision cycles, compared to more mature regions and the fact that open source has a higher penetration than in other regions.

"The cost factor is also an issue [in boosting the adoption of open source technologies] in Latin America, particularly in countries that are mostly affected by the fluctuation of the dollar... We have also seen many migrations at the data center level to Linux, complemented with virtualization," he added.

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D'Elia was not able to provide hard revenue of growth figures for the region. Globally, however, Red Hat posted total revenues of US$164mn for 2Q09, a 29% year-over-year increase.

Regarding growth in Latin America, D'Elia made special mention of Brazil, particularly because of sales of middleware solutions, as well as Chile and its retail segment. In the private sector, the telecoms and banking industries were key areas of growth.

Furthermore, the government will be one of the main sectors of focus for Red Hat during the rest of this fiscal year, as according to D'Elia, "our business model, plus the quality of the software and the possibility to participate in the open source community, is very important for them. There we expect very aggressive growth rates."

In terms of technologies, Red Hat will concentrate efforts in virtualization for the operating system - an area that the company recently bolstered with the acquisition of Israeli IT firm Qumranet, which provides virtualization technologies for the desktops.

"While data centers are evolving to virtualized environments, they need to increase their virtualization offering to the desktop," D'Elia added. "This is a good business model for smaller companies, which can't afford an IT department, and is also good for large firms and the government, for instance, since there are big savings in hardware, energy and administration."