It just keeps happening -- and, because of Washington, almost no one is paying attention. I am talking about the explosion in orders for tech companies we are seeing right now. Last night Red Hat (RHT) , which makes all sorts of software for companies that want to migrate to public and hybrid clouds, put up a number that analysts were rapt about -- one of them even saying the quarter's orders were 'breathtaking."
Red Hat has all sorts of customers from internet service providers to the Navy and companies that need to use Amazon Web Services (AMZN) or Microsoft's Azure (MSFT) . The cheapest way to connect is with Red Hat's products. Now it is an excellent company with fantastic management -- Jim Whitehurst has done a remarkable job -- but you do not have the highest growth rate in nine years, when the company was much, much smaller, if there isn't a considerable amount of information technology spending going on.
The environment is vastly improved around the globe.
This company was able to close 30 deals of more than $3.5 million, including 16 deals that were in excess of $5 million and four larger than $20 million -- as well as a whopping $100 million deal with a global service provider.
These are monster numbers. In all of the years I have followed this company, I always thought it could have a breakout quarter, but this one was ridiculously positive.
Or, to put it another way, the spend in tech -- whether it be because of the coming 5G revolution, or the need to be in the cloud NOW, or because you just have to catch up because you have delayed spend (67% of orders were from the Americas, where I think there's lots of delayed spend) -- is just off the charts.
I felt the same way when I listened to the Micron (MU) call, where demand for both flash and DRAMs is much stronger than anyone thought possible because of demand for devices that connect to the web or that power the Internet of Things, not just personal computers any more, and it doesn't seem to be able to let up. You need too many of Micron's products if you are selling devices that will let people Snap or Instagram or play Pokeman Go.
Augmented reality takes a ton of Micron chips to work.
I felt that way when Oracle (ORCL) spoke -- and just saw such a huge acceleration of companies moving to the Oracle cloud that I was willing to check off on the notion that Oracle has, indeed, become a cloud company with some legacy business. I felt that way when Adobe (ADBE) reported an incredible number that indicated that commerce and creativity in the cloud is accelerating rapidly.
Now, of course, there is a secular trend to leave the on-premises commodity hardware and to store everything imaginable into the cloud. It's cheaper and more efficient.
But to see this burst of spending tells me that people are optimistic beyond where you might think if you read the papers or watch the news.
This is what I struggle with every day. I read the papers like you. I read about how the government has become dysfunctional again, and how Washington is just a total failure at getting things done.
But then I am on one of these conference calls and the orders and the revenue numbers just don't lie. They are powerful and palpable.
I would love to say to these customers, 'Don't you get it? The narrative is that health-care reform failed and Trump's presidency is DOA -- and you will look like idiots for all that you are spending on tech of every sort, software, hardware, middleware, optical, communications, processing.'
But you know what that would make me into?