"Open source is much cheaper, much more flexible and agile, so a lot of large enterprise accounts are focused on what we're doing," Red Hat CFO Frank Calderoni said in an interview with CNBC.com earlier this week. "We're starting to get more on the radar as it relates to enterprise CIOs."
Calderoni joined Red Hat in June and was previously finance chief at Cisco.
Giant businesses like Barclays and DreamWorks are using Red Hat's Linux technology for application development while others including Volvo and Target are counting on its infrastructure tools as they move to the cloud.
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Investors haven't always been so bullish. Turning free products into paid offerings is inherently challenging, and there were questions about Red Hat's growth prospects. The stock was flat from mid-2012 to mid-2014.
Pacific Crest Securities analyst Ben McFadden is still cautious and says the rally may have gotten ahead of itself. Even with the move to the cloud, much of Red Hat's business remains in the traditional on-premise world, and investing in newer businesses is costly. He has a neutral rating on the stock.
"Shares have appreciated significantly and investments in the emerging portfolio of the business are likely to limit operating-margin expansion," McFadden wrote in a report last month. "The company is transitioning to a more diversified revenue stream, but it will take time."