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I wanted to take a quick moment to provide a brief "State of the Union" for Red Hat. I’ve been on the job at Red Hat since December 2007, and have had the opportunity to meet hundreds of Red Hat customers, partners, associates and industry leaders. In keeping with the U.S. presidential State of the Union address, I’d like to touch on plans for the upcoming year while also reflecting back to share a few observations from the past 13+ months.

Red Hat’s accomplishments help us better serve our customers and reflect the tremendous work of our associates. In addition, significant events in the external environment helped shape our business environment and influence our work and lives. Here are some highlights:

1. The value Red Hat delivers during both good and tough economic times. Red Hat has always focused on delivering quality solutions at the lowest price. With the current economic downturn, IT budgets are shrinking while expectations for performance, quality and innovation continue to grow. Enterprises are turning to open source now more than ever and Red Hat continues to help customers carve out IT costs with everything from virtualization, subscription costs, application costs and management costs to heating and cooling costs and much more.

2. Welcome Qumranet and Amentra. Red Hat made a few key acquisitions in 2008 including Qumranet and Amentra. Amentra, a provider of systems integration services for SOA, business process management, systems development and enterprise data solutions, provides a solution-oriented depth to the JBoss middleware business. In September, Red Hat welcomed Qumranet in an acquisition that positions us to deliver comprehensive, reliable and open virtualization to Linux and Windows servers and desktops. Both of these acquisitions build on Red Hat’s commitment to open source in our technologies and services.

3. Consume and contribute. I’ve met with customers and partners all over the world during the past 13 months and have heard great stories about companies who are not only consumers of Red Hat and open source, but who have also contributed back. While this is great news, I’d like to develop even deeper relationships with our customers and work together more closely to develop solutions that serve real needs and solve real problems. This continues to be a top priority as we move into 2009 as truly collaborative partnerships are instrumental to delivering value to Red Hat customers.

4. Hail to the community! Have you downloaded Fedora 10 yet? Tried out JBoss Application Server 5.0.0 GA? The Fedora Project and communities continue to thrive and innovate, providing the technology foundation for Red Hat’s enterprise products. As a loyal Fedora user, I’m always counting down the days as a new release approaches and I look forward to trying out all of the new features. The past year brought many successes on the community front and I can’t wait to see what Fedora and have in store for 2009.

5. Holding firm ground on software patents. Red Hat held firm last year on a couple of key software patent issues. First, we settled patent litigation in June involving Firestar and DataTern. With this settlement Red Hat provided for extensive protections for our customers and the larger open source community that Red Hat relies upon. We also took a stand on software patents in the Bilski case concerning the subject matter limits of patent law. Red Hat filed a brief in Bilski to educate the Federal Circuit Court of Appeals about FOSS and how software patents impede innovation in the software industry and conflict with open source development and distribution.

6. Weathering the economic storm. Red Hat has continued to execute well in what is a pretty competitive economic climate. In fiscal year 2008, Red Hat became the first open source vendor to cross the $500 million mark in revenues and we’ve also maintained 27 consecutive quarters of sequential growth in total revenue. We have a consistent track record for providing low cost, high value software and services to our enterprise customers and we will continue to build Red Hat with an eye toward growth. I also have to say that Red Hat employees are the most committed and passionate I’ve seen.

7. Keep on fighting the good fight. There is a Mohandas Gandhi quote that covers the full length of the lobby at Red Hat’s Raleigh headquarters: "First they ignore you. Then they laugh at you. Then they fight you. Then you win." As I walk through the doors each day, this is a constant reminder of the open source ideals that are the foundation of everything we do at Red Hat. While Red Hat may be small in comparison to the proprietary giants we challenge, our open source culture promotes the free exchange of ideas and enables us to deliver better software, faster. With an endless abundance of creative thinking and collaboration, I’m proud to say that Red Hat is well equipped to continue to fight the good fight.

In closing, thanks to everyone who has welcomed me to the company over the past several months. I continue to see great opportunities for Red Hat in the coming years and can’t wait for what the remainder of 2009 has in store for Red Hat and the open source community.

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