IBM completes landmark $34 billion acquisition of Red Hat

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Customers want hybrid cloud applications because they "look at their IT and they say, "Look I can't just throw it all out and rebuild it" and instead want a mix of public and private cloud applications "with one platform across it". And they need partners they can trust to manage and secure these systems.

Analysts predict that the Red Hat acquisition should provide more opportunities for IBM for its cloud business to grow.

"We think open source has become the de facto standard in technology because it enables these solutions", said Whitehurst.

The 108-year-old International Business Machines Corp., once synonymous with mainframe computing, has been struggling to adopt cloud-related technologies. Whitehurst will join IBM's senior management team and report to Rometty. Previously, the company has made it clear that Red Hat will operate as a distinct unit within IBM's Hybrid Cloud team. Both companies issued a statement on Tuesday announcing the closed deal.

IBM mostly missed the public-cloud revolution under Rometty's predecessor, Sam Palmisano, who dismissed Amazon's strategy of spending heavily on massive data centers to handle other companies' computing tasks.

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Having already tagged along the public cloud, IBM is now wanting to bet its stakes on the hybrid cloud - which actually enables companies to run programs on big public cloud providers as well as their own internal servers. In the 12 months through the first quarter of 2019, cloud revenue exceeded $19 billion. Services revenue jumped 17 percent. The company lags behind Amazon and Microsoft in the cloud infrastructure business. IBM's offerings have evolved to reflect new customer needs and drive greater growth.

And that's the where the - astronomical - acquisition figure for Red Hat comes from. It will maintain its independence and neutrality, insists IBM. Red Hat was the first big software vendor to license the TCK. "We've been working with both IBM and Red Hat for years to deliver on that goal, and as they together build the next generation IT company, they will be an essential part of our digital transformation". "We believe that hybrid cloud unlocks tremendous value and is the only way forward for our clients". The company had even acquired a number of proprietary software through various acquisitions. Red Hat only came into existence in 1993 and has always focused on the decidedly un-corporate open-source software community.

The head of the project, Matthew Miller, today took the time to reassure all Fedora uses that the massive acquisition will in no way affect their favorite distribution.

On May 3, the U.S. Department of Justice concluded its review of IBM's Red Hat acquisition, and by posing no objections basically approved IBM's acquisition of Red Hat.

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