Business & Tech

Red Hat sets up shop in Fort Point, near future GE base

Jim Whitehurst, chief executive officer of Red Hat Inc.
Nelson Ching/Bloomberg
Jim Whitehurst, chief executive officer of Red Hat Inc.

When the banner displaying a crimson fedora briefly appeared outside 300 A St. in April, the rumors spread faster than free software: Red Hat was coming to Fort Point.

The flag, it turns out, was an effort to recruit the company, not necessarily a sign of anything definitive. But the recruitment effort paid off. North Carolina-based Red Hat has just signed a lease that will bring 100 to 150 workers to the South Boston building.

Paul Cormier, president of products and technologies, said the business software company will occupy 40,000 square feet, with an opening planned in mid-spring 2017.

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The 9,300-person company already has a substantial campus in Westford, a 175,000-square-foot complex where about 550 people work. Cormier, who will be based in Westford and Boston, said only a handful will move to the Boston office, while the rest will be new employees.

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Red Hat has built a big business around free software that corporate clients can easily alter or update for their own specific needs. It expects to generate $2.4 billion in revenue this year, primarily from subscriptions that companies pay for support in using its open-source programs.

The Fort Point location, in a building owned by the real estate investment firm Bentall Kennedy, will serve several functions. Red Hat will use it as a research and development center for its software, Cormier said. The location will also become Red Hat’s global executive briefing center, where the company hosts bigwigs who represent potential and existing clients from around the world.

City and state officials said Red Hat won’t be getting tax breaks for the Boston office. Cormier said the primary reason to open in the city was to chase talented engineers and other potential workers who prefer to live and work in Boston.

“We need to go where the talent is,” Cormier said. “That’s one of the few places in the country that has that kind of talent readily available.”

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Red Hat joins a number of high-tech companies choosing Boston over the suburbs for relocation or expansion. There’s been a parade of them marching into the city in recent years: Autodesk, Acquia, and LogMeIn, to name a few.

The most well-known is General Electric, which moved its headquarters to temporary space in Fort Point last month from suburban Connecticut. Red Hat’s new office will be a block from where GE plans to open a new headquarters complex in 2018.

“We see a number of companies that have moved into town,” said Tom Hopcroft, chief executive of the Mass Technology Leadership Council. “Largely it’s been for talent. . . . There’s a real value to that innovation ecosystem.”

Red Hat’s decision to open in what Boston officials call the Innovation District comes as the company remains in an aggressive expansion mode. In March, CEO Jim Whitehurst told investors that he wanted to expand his workforce by 16 percent in this fiscal year, the equivalent of adding 1,400 employees. That rate would be modestly slower than Red Hat’s growth a year ago, but still the envy of most major companies.

“It’s not just about who they are and their prominence in what they do,” said John Barros, Boston’s economic development chief. “It’s also the fact that they’re going to be a pretty good-sized operation in Boston. . . . This is really big for all of Boston.”

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Cormier said he was surprised by the attention the big “red hat” banner and smaller temporary signs on the building generated in April, and concedes they “maybe psychologically made a difference” in the decision to expand there. “I never realized so many people were watching,” he said.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.