Open source cuts deeper into MS territory! Red Hat earnings up.

It’s not news to most of our readers. Open Source is the new business model for software. Red Hat derives its income largely from support and services. It’s also no secret to most that Red Hat’s biggest competitor is not other Linux distributions, it’s Microsoft.

New CEO James Whitehurst believes Red Hat is now ready to continue rapid growth through an economic downturn as the Raleigh-based company pitches its free software to organizations looking to cut their tech budgets.

“It’s my hypothesis for why we continue to see robust demand while others seem to be having issues,” Whitehurst said in an interview. “We’re known for value, and when you’re looking to cut budgets, we’re a logical name that comes to mind.”

Unlike Microsoft Corp., Red Hat makes money from its Linux operating system and other software by selling subscriptions for service. (Yahoo News)