Piper's survey work indicates Red Hat "is in pole position" to become the dominant provider of OpenStack cloud infrastructure solutions, ahead of Rackspace (RAX - just reported 37% Y/Y Q3 public cloud revenue growth) and IBM. Also, Murphy expects Red Hat's services growth (only 9% Y/Y in the Aug. quarter) to return to the 20% range next year thanks to OpenStack demand, and think billings growth (fell to 8% last growth) "could pick up toward the low teens in the next two quarters."
Lastly, Murphy observes Red Hat trades at just 13x cash flow after badly underperforming the S&P lately. Shares have been pressured this year by slowing Linux billings growth amid weak enterprise server demand, and a preference among some Internet companies (e.g. Google, Facebook) to opt for free Linux distributions.