"The acquisition of Red Hat is a game-changer". Red Hat's stock is down 28 per cent over the past six months through Friday, according to data compiled by Bloomberg. As we've reported in the past, we expected to see a significant increase in mergers and acquisition activity in the wake of President Trump's corporation tax repatriation holiday and indeed IBM was one of the beneficiaries of that plan given it had a sizeable overseas cash pile. Investing in the cloud is now a given for business, but IBM says many companies are hesitant to deploy more services and applications because "the proprietary nature of the cloud market makes it very hard", especially when multi-cloud environments are being maintained. IBM says it now expects to become the world's leading hybrid cloud provider-a combination of local and external cloud services.
IBM announced Sunday that it has struck a deal to acquire the cloud-software company Red Hat for $34 billion. Red Hat will maintain its current leadership team and remain in its current headquarters and facilities.
Red Hat, founded in 1993, is a developer of Linux, a popular open-source operating system. The...
'The largest software transaction in history and it's an open source company. Red Hat gives IBM software heft and an OpenStack playbook that can rival VMware, which incidentally has become quite cozy with AWS. "The next 80% is about unlocking real business value and driving growth".More news: Fine finish keeps Finau in front as Rose wilts at HSBC Champions
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Venero's message for IBM CEO Rometty: "The simple message for Ginni Rometty is, 'Don't forget the channel partners who helped bring Red Hat to the level that it is today in enterprise accounts'".
This acquisition brings together the top hybrid cloud providers and will enable companies to securely move all business applications to the cloud. This is the next chapter of the cloud. "This includes our joint hybrid cloud collaboration announcement in May, a key precursor in our journey to this day". "It requires shifting business applications to hybrid cloud, extracting more data and optimising every part of the business, from supply chains to sales".
Cloud computing refers to the delivery of computing services, including storage and software, over the internet to achieve economies of scale. The deal has been put up for approval by the board and shareholders of Red Hat.
"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", added Jim Whitehurst, president and CEO of Red Hat. The statement goes on to predict that the deal will accelerate IBM's revenue growth, margin and free cash flow within one year of closing. It is targeted to close in the latter half of 2019, but there is a good chance that others may wish to make a counterbid.