“At this point I want to be guarded because we’re in early days, but it could be a very, very large business, on par with our enterprise business over the next five years,” he told Cramer.
If realized, that trajectory could mean multi-year, double-digit revenue growth for Red Hat, which reported a strong earnings beat on Tuesday.
“It’s still early days, but the market opportunity’s there. And our business model, with a stable, long-life support, fits really, really well with telco infrastructure which, once it goes in place, it’s going to stay there for a decade,” Whitehurst told Cramer. “It’s a perfect market for our business model. Now we have to execute into it.”
And as the company continues to execute on a number of functions, particularly helping its clients shift their operations to the cloud, Whitehurst said that Red Hat’s deals with government agencies are also burgeoning.
“We had a really nice last couple of quarters with the government. We’ve always had a large business in defense and intelligence because of the security and performance of our products, and that’s now spilling over in a very significant way to the civilian agencies,” the CEO said.
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