IBM closes $34B Red Hat deal, vaults into multi-cloud

By | August 23, 2019

IBM has finalized its $34 billion buy of Red Hat and says it will use the Linux powerhouse’s open-source know-how to enable larger scale client jobs and to create a web of partnerships to simplify carrying out them.

“A lot of our mutual customers are considering doing more,” says Arvind Krishna, Senior Vice President, IBM Cloud & Cognitive Software at a blog article . “Many see this as an opportunity for individuals to create large industry ecosystems along with different providers that are optimized on this frequent infrastructure. . . .If Red Hat were to do this on their own, there are a limitation to just how much they can scale. Together, we can set a lot more resources into optimizing different partners.”

The combined companies will also be able to smooth out the challenges of multi-cloud environments where every cloud provider’s implementation differs from the others, says Paul Cormier, Red Hat Executive Vice President and President, Products and Technologies, at the same blog post.

“[All] the clouds, even though they have the exact same underlying technology, they’re all different,” says Cormier. “And therefore, as clients wish to length clouds, they’re realizing that they have to have four or even five distinct islands of technology stacks that developers need to develop for, which operations people must operate. That’s really unsustainable from a management standpoint.”

By combing both businesses, their development teams will also be able to focus on making their products easier to delploy, Krishna says. “Capabilities like retrieval, monitoring, safety, and auditing are rarely built in. And they often can’t be deployed in a single click. Typically, each one these configurations have to be done manually,” he says. “Therefore, a massive problem our customers need us to resolve is to make the entire process much simpler.”

More widely, IBM expects to create one Linux operating environment that will span any kind of business IT infrastructure from bare metal to virtual machines into clouds, Cormier says. “This is the problem that we’re planning to solve–providing a single, common operating environment across the hybrid and multicloud world. As we help lay down that one common operating environment, we will not only help operators but also help developers have one surgeries policy, 1 deployment policy and one security policy,” he says. “They will have one environment where they can build once and deploy in any one of the footprints that is appropriate.”

IBM will continue Red Hat’s historical commitment to open source, ” says Chris Wright, CTO of Red Hat. “As we start this new chapter together with IBM, Red Hat will continue to become and do what it always has,” Wright says in a separate blog. “We will continue to direct and participate in communities. We’ll carry on with our work in many open source projects. And the technology we develop and provide to our customers will continue to be open.”

When it announced plans to purchase Red Hat this past year, IBM said it expects expansion in the use of cloud solutions to blossom, together with enterprises poised to expand from using cloud for inexpensive compute power to placing more software in the cloud.

“To accomplish this, companies need an open, hybrid approach to creating, running and deploying software in a multi-cloud environment,” IBM said in a written statement.

IBM and Red Hat have partnered for at least a year to integrate their cloud offerings: Red Hat’s Open Stack personal cloud system and its Ceph Storage and IBM’s public cloud. The goal was to lure Red Hat clients by allowing use of Red Hat’s management for workloads put in the IBM cloud.

In addition to hybrid support, the impending merger will offer corporate developers with container and Kubernetes technology essential to their work composing cloud-native software, he says.

IBM is calling its buy of Red Had its largest acquisition that will allow it to expand its portfolio to increase and the magnitude of its $19 billion cloud company and tap into what it sees as a $1 trillion economy.

Red Hat has become a free-standing unit of IBM which will continue to keep its leadership, culture and facilities, IBM states.

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