When the New York Stock Exchange needed a computer operating system to handle its vast amount of daily transactions, it did not look to the perennial tech-bellwethers like Apple or Google.

Instead, the exchange had a much better company in mind, one whose technology is stronger and more efficient. And one whose technology is “crash-proof”.

You see, the NYSE simply can’t run on a program like Microsoft Windows. Why? According to this company’s President and CEO Jim Whitehurst, “It crashes too often.”

That’s why the New York Stock Exchange selected Red Hat, Inc. (NYSE: RHT). Headquartered in Raleigh, North Carolina, Red Hat is the largest provider of Linux software and is the most recognized open brand source in the world.

The company serves global enterprises with technology and services made possible by the open source model. Why open source? Because it is inevitable.

You see, all software is written with source code. With open source software, the code is protected by a special license that ensures everyone has access to that code. That means no one company can fully own it. Microsoft programs are not created using open source, meaning that only the company has access to the codes in products like Word and Powerpoint.

Open source returns control to the customer. You can see the code, change it, learn from it. Bugs are more quickly found and fixed. And when customers don’t like how one vendor is serving them, they can choose another without overhauling their infrastructure. No more technology lock-in. No more monopolies.

Red Hat’s serves customers in every major business arena, and even local, state, and federal governments. Its customers include the New York Stock Exchange, McKesson, Charles Schwab, Merril Lynch, Credit Suisse, and Dreamworks.

And Red Hat’s results show how profitable their open source methodology can be. In its latest quarter, the company reported a 20% jump in earnings, handily beating Wall Street’s expectations. And we expect the same result when the company releases its fourth-quarter earnings on March 25.

Red Hat has a dominant market position as the high-quality, low-cost provider of IT infrastructure solutions. Its balance sheet is growing even stronger with significantly higher operating cash flow than last quarter.

And management is taking advantage of these market conditions by repurchasing two million shares of common stock. RHT has the momentum heading into this earnings release to top the street again.

Source: Red Hat, Inc. (NYSE: RHT): Stock of the Day