IBM completes its acquisition of Red Hat in ‘Chapter 2 of the cloud’

In October of last year, IBM announced it intended to buy open-source software platform RedHat for $38 billion. Late last week, the tech giant said it had completed the acquisition, after successfully negotiating regulatory and other hurdles.

When it first announced the acquisition, IBM said the purchase would help it become the top hybrid cloud service, as the only provider with a multi-cloud platform based on open source. It cited research that shows “80 percent of business workloads have yet to move to the cloud, held back by the proprietary nature of today’s cloud market.”

Linux, Kubernetes

Because of that factor, CEO Ginny Rometty said on CNBC, “this is really Chapter two of the cloud.” She emphasized the importance of the hybrid public-private cloud, and the ability of the IBM/Red Hat platform to run on competing clouds, such as Amazon’s or Microsoft’s. IBM’s large tech services employ a wide variety of cloud types and configurations.

With RedHat, which generated $3.4 billion in fiscal 2019 revenue, IBM said it will be able to create cloud-native applications quicker than before, utilizing such open-source technologies as the Linux operating system and the container-orchestration system Kubernetes.

Red Hat will become a distinct unit inside IBM’s Hybrid Cloud team, and it will continue to be led by its current management. IBM said it remains committed to maintaining Red Hat’s open governance, participation in the open source community and method of maintaining open source contributions. Additionally, Red Hat partnerships will be maintained with IBM cloud competitors, including Amazon Web Services, Microsoft Azure, Google Cloud and Alibaba.

‘A big player in the cloud space’

Daniel Herdean, CEO of data analytics firm Cognetik, told ClickZ via email that, while the two companies could previously leverage each other’s technology through their long-standing partnership, it wasn’t “in the most cohesive manner.”

Now, he said, the integrated companies will be able to increase efficiencies and provide “a higher level of customer experience” by utilizing common data more easily across public, private and on-premises platforms.

He added that, with Red Hat’s Hybrid Cloud capabilities and software provisioning tool Ansible, IBM “is now a big player in the cloud space.” Previously, he said, IBM had been falling behind competitors, but it will now be able to provide more of a seamless experience across cloud platforms.