Red Hat's next Linux due before March
Stephen Shankland, for News.com
Red Hat plans to ship the next version of its premium Linux product on
February 28, debuting major virtualization technology but missing an
earlier deadline by about two months.
Red Hat Enterprise Linux 5 had been scheduled to ship by the end of 2006.
However, the company began giving itself scheduling wiggle room in
September, when Red Hat released the first RHEL 5 beta. A second beta
arrived in November.

Now Red Hat is being more definitive. "I'm sure we will ship a gold
(version) on February 28," Chief Executive Matthew Szulik, referring to
the final version, said in an interview after the company reported its
quarterly financial results.

The delay isn't a major problem for Red Hat, said Pund-IT analyst Charles
King.

"Making certain that RHEL 5 is thoroughly locked, loaded and debugged
before sending it out the door (is) more important in the end than meeting
a deadline," he said. And because Red Hat sells software subscriptions,
all existing customers get free upgrades, so the company doesn't consider
the new version a "revenue event," he added.

One major feature arriving in RHEL 5 is Xen, virtualization software that
lets a single computer run multiple operating systems simultaneously. The
technology's initial advantage is to let administrators load up a server
more efficiently, but virtualization in the longer run also holds promise
for reliability and flexibility because virtual machines can be moved from
one computer to another while running.

Virtualization has been a feature on higher-end servers for years and has
arrived on mainstream x86 machines chiefly through software from EMC's
VMware subsidiary. Xen lacks VMware's market power, but the open-source
software is being incorporated as a standard feature of corporate versions
of Linux and the x86 version of Sun Microsystems' Solaris.

Microsoft is working on another virtualization competitor, code-named
Viridian. It's due to ship within 180 days of "Longhorn Server," the
server cousin to Windows Vista.

Reworking an operating system's foundation, as "hypervisors" such as Xen
require, is necessarily complicated, however, and Red Hat Chief Technology
Officer Brian Stevens said maturing and incorporating Xen is the major
factor on which RHEL 5 depends.

RHEL 5 is based on version 2.6.18 of the Linux kernel--the core of the
operating system--compared to 2.6.9 for the current RHEL 4. The software
includes new security features to protect against some attacks, plus a
"technology preview" of Red Hat's Stateless Linux software to let desktop
machines pull data and settings from central servers.

Red Hat's chief competitor, Novell, began shipping Xen in its Suse Linux
Enterprise Server months ago, but so far, the company hasn't threatened
Red Hat's commercial Linux dominance. A newer threat--Oracle, which
announced in October that it will release a free RHEL clone and sell its
own support for the software--so far hasn't been a problem.

"Clearly, the doomsday scenario that some investors feared regarding the
entrance of Oracle into the enterprise Linux arena and the ramifications
of the Novell-Microsoft partnership did not materialize in the quarter,"
W.R. Hambrecht analyst Robert Stimson said in a note last week.

Red Hat's billings increased 50 percent, compared with the year-earlier
quarter, to $133 million, well above analysts' average expectations of
$120 million to $125 million, Stimson said.

One challenge Red Hat faces is integration of JBoss, open-source software
from a company of the same name that Red Hat acquired in June. Red Hat
reiterated earlier guidance that JBoss would produce $22 million to $27
million in revenue by the end of February, prompting Merrill Lynch analyst
Kash Rangan to say in a note that JBoss is "tracking well."

Among Red Hat sales worth at least $1 million in the quarter, two-thirds
involved JBoss software, Szulik said. "When we acquired (JBoss, it) was an
unprofitable venture. It is still unprofitable, but it's improving," he
said. Red Hat expanded JBoss sales into Asia, Latin America and the Middle
East, and the acquisition presents an opportunity to boost revenue from
subscription renewals, he said.


-- 
Lan Barnes

SCM Analyst              Linux Guy
Tcl/Tk Enthusiast        Biodiesel Brewer
-- 
[email protected]
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