IBM’s upcoming acquisition of Red Hat will make them the #1 hybrid cloud provider


IBM has announced their upcoming acquisition of Red Hat. The $34 billion deal accelerates IBM’s high-value business model and will make IBM the #1 hybrid cloud provider.

IBM has pledged to maintain Red Hat’s open source innovation legacy. Together with Red Hat, they plan to provide an open approach to the cloud that will feature unprecedented security and portability across multiple clouds.

The Chairman, President, and Chief Executive Officer of IBM, Ginni Rometty, stated that, “The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. IBM will become the world’s #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

Jim Whitehurst, President and CEO of Red Hat also had something to say about the acquisition. “Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation.”

This acquisition should strongly position IBM and Red Hat to address and accelerate hybrid multi-cloud adoption. In their joint statement they have stated commitment to help “clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management.”

IBM and Red Hat’s partnership is not a recent development; in fact they have been in partnership for 20 years. It will be interesting to see what positive developments emerge from this latest change.

IBM has stated that they will remain committed to Red Hat’s open governance, open source contributions, and participation in the open source community and development model. IBM has also pledged to foster Red Hat’s widespread developer ecosystem.

Once the acquisition is complete, Red Hat will join IBM’s Hybrid Cloud team as its own distinct unit. That will serve to preserve the independence and neutrality of Red Hat’s open source development heritage and commitment, current product portfolio and go-to-market strategy, and unique development culture. Red Hat’s current management team will also be remaining the same and will continue to be led by Jim Whitehurst. Jim Whitehurst will also become a member of IBM’s senior management team and he will report to Ginni Rometty. Red Hat’s headquarters, facilities, brands, and practices will all be maintained as they currently are.

Paul Cormier, President, Products and Technologies for Red Hat put it best with his statement, “IBM’s commitment to keeping the things that have made Red Hat successful – always thinking about the customer and the open source community first – make this a tremendous opportunity for not only Red Hat but also open source more broadly. Since the day we decided to bring open source to the enterprise, our mission has remained unchanged. And now, one of the biggest enterprise technology companies on the planet has agreed to partner with us to scale and accelerate our efforts, bringing open source innovation to an even greater swath of the enterprise.”

The acquisition has already been approved by the board of directors of both IBM and Red Hat. It will also need Red Hat shareholder approval and is subject to regulatory approvals and other customary closing conditions. The acquisition is expected to close in the latter half of 2019.

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