IBM Acquires Red Hat To Stay Relevant in the Cloud Market

July 9, 2019 Posted by News 0 thoughts on “IBM Acquires Red Hat To Stay Relevant in the Cloud Market”

A few days ago, I posted an article about how giant tech companies can save themselves from antitrust lawsuits by committing to open source. Now, Red Hat has recently announced that they’ve been acquired by IBM for a whopping $34 billion. The steep price tag is a reflection of the immense value one can accrue by being a pioneer of cloud technology. Microsoft and Amazon have exhibited their profitability in this sector long enough to prove the concept. Not only that, they’ve been able to shroud themselves in popularity. Once upon a time, Microsoft was an infamous company within the dev community. In moving towards the cloud, Microsoft had to shed its notorious anti-open source streak. A large reason for Microsoft’s about-face is the fact that cloud technology incentivizes collaboration; if you want to increase market share, it would behoove you not to alienate Linux users. This attitude has created such a fine line between open source and cloud technologies that an article stated, “…open source licenses are becoming almost a de facto standard for how new cloud technologies are being developed.”

We all know that IBM has read the proverbial tea leaves, thus taking the plunge on a popular cloud technology like Red Hat. Though we may question the motives of this aging tech giant, this news is one of many signs that companies will use their open source involvement as a bulwark against lawsuits. The not so altruistic motivation still has benefits for the open source community; open source projects will continue to be funded.  Jim Whitehurst, CEO of Red Hat, mentioned in a press statement that “[j]oining 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.” In this swath of PR sugar, we can probably assume that affiliates like CentOs may be sidelined for new “hybrid solutions.” Some of these solution include OpenShift, which will allow IBM to compete with other severless computing platforms like AWS lambda.

To further that point, Red Hat announced that they will be leveraging the acquisition to offer a “next-generation hybrid multicloud platform.” This technology would presumably put IBM at the forefront of cloud competing thanks to the reputation that Red Hat has garnered over the years. Red Hat’s press statement practically devotes an entire section to explain why IBM is now at the cutting edge, a position that IBM has long been absent from.

But being cutting edge is no longer good enough. That’s why Red Hat’s press statement ends with a sort of pledge of allegiance to open source. When a merger of this magnitude occurs, what giant tech companies like IBM must show is how the acquisition will benefit the community at large.


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