Red Hat
The latest? The CIO of the state of California, Teri Takai, last week said in a policy letter that using open-source software has been sanctioned as "acceptable practice." Shocking, right? Open-source is typically cheaper than licensed software, and the Golden State faces a multibillion-dollar fiscal crisis. I'll be surprised if more states don't follow California's lead.
Red Hat wouldn't be the only company to benefit from wider use of open-source. Novell's
And let's not forget Google
Even if technology spending recovers this year, rising 3.2% as the analysts at IDC predict, and even if open-source grabs a good chunk of the new dollars, Red Hat will have plenty of competitors grabbing for a slice of this growing pie.
The bare-knuckles nature of the open-source market, and Red Hat's sky-high 70 P/E ratio, have some Fools in our 145,000-plus Motley Fool CAPS database worried that the stock has run too far, too fast:
Metric |
|
---|---|
CAPS stars (out of 5) |
** |
Total ratings |
637 |
Percent bulls |
81.6% |
Percent bears |
18.4% |
Bullish pitches |
105 out of 134 |
Data current as of Jan.14.
"I'm bullish on Red Hat for the long term, but its stock price seems a bit pricey right now," wrote CAPS investor JackCaps on Christmas Eve, shortly after the company issued a terrific fiscal third-quarter earnings report. Subscription revenue rose 21% over the year-ago quarter, in part due to better pricing.
That's a great statistic. Mix in wider acceptance of open-source Linux as an alternative to Microsoft's
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