"This was the first time in years that Red Hat's second-quarter
billings exceeded its first quarter billings. Not bad for a company
that gives away free software.
"Importantly, Red Hat appears to be doing longer-term deals, as
its total deferred revenue balance was $496.9 million, growing 32
percent year-over-year and 1 percent sequentially. This would
suggest that Red Hat customers are increasingly comfortable making
a long-term bet on Red Hat's future. Indeed, on the analyst call,
Red Hat Chief Financial Officer Charlie Peters indicated that the
average booking for Red Hat is 24 months and that 36 percent of its
subscriptions are for a term greater than one year.
"In selling longer-term deals, Red Hat is successfully blocking
competitive pressure from Novell, Microsoft, and other companies
that might want to cut into its accounts."
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