Red Hat Inc. (NYSE:RHT) continues to gain market share against Microsoft, Corp. (NASDAQ:MSFT), SUSE Linux and Oracle Solaris in the cloud computing space, according to a Wall Street analyst.

Red Hat Linux OS seems to be the foundation operating system for many enterprises private cloud projects. For every 8 new project starts, still 5 are occurring on Red Hat Linux Platform and 3 are occurring on Microsoft platform, Global Equities Research analyst Trip Chowdhry wrote in a note to clients.

Red Hat continued to enjoy increased win rates in new projects related to Map-Reduce, BigData and BigData Analytics, Chowdhry said.

The analyst said hardware original equipment manufacturers (OEM's) such as Hewlett-Packard Co. (NYSE:HPQ), International Business Machines Corp. (NYSE:IBM) and Fujitsu continued to pre-install RHEL 6.0 in all their new servers and customers were starting new data mining and virtualization projects on top of RHEL 6.0.

SUSE Linux customers continue to migrate to Red Hat RHEL6.0. Seems to us that the customer values SVirt Security implementation on Red Hat's RHEL6.0 to be significant feature, which is contributing to SUSE Customers to switch to Red Hat Linux 6.0, said Chowdhry.

The analyst, who has an overweight rating on Red Hat stock, expects Red Hat's third quarter earnings to be 26 cents a share on revenue of $288 million, reflecting a year-over-year growth of 32.3 percent and 22.3 percent, respectively. Wall Street is expecting the company to earn 26 cents a share on revenue of $289.47 million, according to analysts polled by Thomson Reuters.

For fiscal 2012, Chowdhry expects earnings of $1.05 a share on revenue of $1.127 billion, reflecting a growth of 26 percent and 24 percent, respectively, from last year. Analysts expect earnings of $1.05 a share on revenue of $1.13 billion for fiscal 2012.

We are maintaining overweight rating as our research suggests that Red Hat may enjoy both revenue acceleration and margin expansion probably 8 to 12 months from now. Long-tem investors should continue to overweight Red Hat, said Chowdhry.

Shares of Red Hat closed Friday's regular trading session at $50.22 on the New York Stock Exchange. Chowdhry has a price target of $50 on Red Hat stock.

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