"We're seeing a very strong demand in the financial, telco and government sectors, particularly for our middleware portfolio (JBoss).

"Most IT budgets are under huge pressure to reduce costs. Proprietary middleware is still some of the most expensive parts of budgets.

"We're talking about making really large cost savings, both in capex and opex."

Neilson says Red Hat continues to invest in New Zealand and is growing its headcount. He won't give exact numbers but says all major functions are covered.

The company has four Advanced Business Partners in New Zealand: Datacom, Gen-i, Solnet and OSF. "We plan to double that number within the next nine months.