Red Hat, Inc. executives should be buoyant as its annual Red Hat Summit opens in Boston next week. Lifted by yesterday’s strong earnings report and the exploding popularity of open source software, the biggest challenges the open-source company faces now are how to sustain momentum.

With revenues expected to top $2 billion this year, and a market cap of $14 billion, Red Hat is proving that open source can be a highly profitable business. Its subscription business has 94% gross margins and “throws off $600 million in free cash a year,” said Wikibon Chief Analyst and co-founder David Vellante, in a preview video (below). That’s not to say the road to success has been easy. As CEO Jim Whitehurst once said, “Selling free is tough.”

But it can be done. Red Hat has defied the skeptics who said that a subscription-and support-driven business model couldn’t work in software. The company’s success isn’t based on its help desk, but rather on trust. “Red Hat supplies adult supervision so that the enterprise knows it can trust what it gives them,” said Wikibon Senior Analyst Stuart Miniman. “Red Hat wants to be the poster child of open-source.”

Miniman and Vellante will make the round trip from their base in Boston to San Francisco and then back to Boston next to lead theCUBE’s coverage of Red Hat Summit and DockerCon.

Red Hat is branching out of its Linux base into other growing open source categories. One of those is OpenShift, its platform-as-a-service (PaaS) that runs on top of its OpenStack cloud both inside the data center and in the public cloud. OpenShift competes directly with Cloud Foundry and other PaaS providers, Miniman said, but its also an important endorsement of OpenStack.

Red Hat angered some people in the open-source community last year by saying it would only support instances of OpenStack that run on its own Red Hat Enterprise Linux platform. However, Red Hat knew that trying to support platforms it doesn’t know very well would risk violating the trust that it has cultivated so carefully, Miniman said. The company has since moved to grow its OpenStack footprint with the acquisitions of storage developers Gluster, Inc. and Inktank Storage, Inc., essentially ensuring that the developers of those open source technologies will continue to contribute their work to the community.

Red Hat is also angling to be one of the lead supporters of Docker, the new container technology that rapidly provisions resources within a virtualized environment. “We are really starting to see the developer community rallying around Docker,” Miniman said. “For so long infrastructure has been a boat anchor that stopped them from moving forward on their applications. Containers are a vision for freeing new applications from infrastructure.”

Among those making appearances on theCUBE From Red Hat Summit will be Craig Muzilla, SVP of Red Hat’s Application Platform Products Business, Apcera CEO Derek Collison, Red Hat CEO Jim Whitehurst, and IBM Power Systems VP and General Manager Doug Balog.

DockerCon has grown from an intimate meeting of 400 cognizanti a year ago to a 2,000 person conference this year. And, says Miniman, the waiting list to get in has topped 500.  The conference covers more than Docker, and major vendors including IBM, Intel, Red Hat, EMC and Google will have strong presence there. “It really is a container conference,” says Miniman, with Google Compute Engine’s Kubernetes, for instance, also a topic of discussion. And it goes beyond Linux to include discussion of the progress Microsoft and Docker have made to bring containers to Windows and Microsoft Azure.

Interviewees will include Microsoft Architect John Grossman, Docker CEO Ben Golub, EMC VP Ken Durazzo, and Orbitz Principal Engineers Rick Fast and Steve Hoffman.

Coverage of Dockercon will kick off Monday at 11:00 PT (2:00 P.M. ET) and run through Tuesday. Red Hat Summit coverage will begin Wednesday at 10:00 ET (7:00 PT) and run through Thursday.

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