IBM acquires Red Hat
On the 28th, IBM announced the acquisition of Linux giant Red Hat. According to the announcement, the two companies have reached a definitive agreement under which IBM will acquire all of Red Hat’s issued shares at a price of $190 per share for a total value of approximately $34 billion.
Today’s companies are already using different clouds. However, research shows that 80% of business workloads have not yet turned to the cloud due to market-specific stagnation. The acquisition will bring a first-class hybrid cloud provider that delivers unprecedented security and portability in today’s cloudy environment, allowing companies to more business.
The deal accelerates IBM’s high-value business model, making IBM the number one hybrid cloud provider in the emerging $1 trillion growth market.
IBM said Red Hat would operate independently as an IBM Hybrid Cloud team. Through this acquisition, IBM will continue to focus on Red Hat’s open governance, open source contributions, participation in open source communities and development models, and the promotion of its broad developer ecosystem. Also, IBM and Red Hat will continue to work on continuous open source freedom through patent commitments, GPL partnership commitments, OIN, and LOT networks.
In addition to the IBM Cloud, IBM and Red Hat will continue to build and enhance Red Hat partnerships, including major cloud providers such as AWS, Microsoft Azure, Google Cloud, and Alibaba. At the same time, Red Hat will benefit from IBM’s hybrid cloud and enterprise IT scale, helping them extend the open source technology portfolio to global operations.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, chairman, president, and CEO of IBM. “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.”
“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs,” she said. “The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales.”
Red Hat President and CEO Jim Whitehurst said: “Open source is the default choice for modern IT solutions, and I’m incredibly proud of the role Red Hat has played in making that a reality in the enterprise,” said Jim Whitehurst, President, and CEO, Red Hat. “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.”
If all goes well, the transaction is expected to be completed in the second half of next year.
