IBM and Red Hat seal the deal

The $34 billion acquisition of opensource enterprise software vendor Red Hat by venerable tech giant IBM has finally been completed.

The mega M&A was first announced last October and, given the size of it, seems to have gone through relatively quickly. Now begins the significant undertaking of integrating two such massive organisations that may well have quite distinct cultures.

IBM was founded in 1911 and has undergone several transformations to become the enterprise software and services company it is today. Red Hat only came into existence in 1993 and has always focused on the decidedly un-corporate open-source software community. IBM will be hoping some of its youthful vigour and flexibility will rub off, but that remains to be seen.

The official line is that the acquisition makes IBM one of the leading hybrid cloud providers as well as augmenting its software offering. There’s much talk Red Hat’s independence being preserved but, of course, it will now be taking orders from IBM.

“Businesses are starting the next chapter of their digital reinventions, modernizing infrastructure and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors,” said Ginni Rometty, IBM chairman, president and CEO. “They need open, flexible technology to manage these hybrid multicloud environments. And they need partners they can trust to manage and secure these systems.”

“When we talk to customers, their challenges are clear: They need to move faster and differentiate through technology,” said Jim Whitehurst, president and CEO of Red Hat (what’s the difference?). “They want to build more collaborative cultures, and they need solutions that give them the flexibility to build and deploy any app or workload, anywhere.

“We think open source has become the de facto standard in technology because it enables these solutions. Joining forces with IBM gives Red Hat the opportunity to bring more open source innovation to an even broader range of organizations and will enable us to scale to meet the need for hybrid cloud solutions that deliver true choice and agility.”

That’s it really. There’s lots aspirational talk and general banging on in the press release, but you get the gist of it. Whitehurst will join the senior management team and report into Rometty, who seems to possess every senior management position worth having. IBM has been steadily increasing cloud as a proportion of total revenues and the pressure is now on to take that growth to the next level.