IBM Is Taking A Major Move To Hybrid Cloud By Acquiring Red Hat For $34B
Author - Nov 02, 2018
IBM is about to acquire Red Hat which is famous for being the distributor of Linux for $34 billion.
- IBM And Fujifilm Team Up To Create Magnetic Tape With World-Record 580TB Storage
- Knock Down Linux OS System And Get $100,000 From Microsoft!
- IBM Is Developing An AI Suitcase Robot To Guide The Visually Impaired
IBM shows it ambition in Hybrid Cloud by acquiring a cloud business and open-source Red Hat, the biggest distributor of Linux (a very famous open source software operating system along with Windows), at the price of $34 billion.
The acquisition, which was announced on this Sunday, is the latest move among many big companies in software seeking for market share in the fast-growing and high-demand cloud computing market.
In June, Microsoft made the move as they acquired GitHub, a very popular site among developers as one of the biggest platform for sharing code, at the price of $7.5 billion.
Microsoft acquired GitHub - very popular code-sharing platform for $7.5 billion
By acquiring Red Hat, the company is attempting to position themselves as a trusted corporation that is attempting to get a foot on the cloud, but in the form of a dependant on a big cloud supplier.
In the cloud model, developers will write apps that can run on a remote data center. With cloud computing, you can not only lower the cost for your business but also develop your new software business at a faster rate.
IBM is ahead of any other business in a hybrid approach to cloud computing. It means some very important applications and data will run on a cloud technology inside data centers of a company, while other tasks will run on the tech companies’ clouds.
The current major cloud platforms are Google, Amazon, and Microsoft. There are many complaints from businesses claiming that those three suppliers include the proprietary technology that prevents them from switching from one supplier to another.
Cloud service is basically the competition between three tech giants: Amazon, Google and Microsoft.
The strategy of IBM is supplying both software and also hardware for companies that want to build private clouds for their own, and IBM also offers public cloud service.
Many analysts believe that IBM may struggle in competing with large-scale cloud corporations like Microsoft, Google and also Amazon which have already been investing billions of dollars to keep building more data centers.
However, both Red Hat and IBM are having a solid belief that they are in a good position to get on the top of cloud market and they claim to offer businesses an easy transition to cloud without being stuck with a single cloud supplier like Microsoft, Google and Amazon are rumored to do.
Both companies reveal that they are planning to offer their technology to link in-house cloud of a company and many third-party clouds.
“Enterprises are moving to the cloud but 80 percent of them are not there yet,” stated by Arvind Krishna - a senior vice president of IBM that in charge of the company’s hybrid cloud offerings. “We can provide a much easier path to manage and make secure both private clouds and links to multiple public clouds.”
Founded in 1993, Red Hat has managed to build a very profitable business. Last year, their revenue figure for open-source software is $2.4 billion, mostly from Linux.
Linux - a popular open-source software operating system is the most profitable business of Red Hat
As you may know, open source software is distributed to everyone and programmers can modify it under some particular rules.
The company has also expanded their business by offering quality control, technical support, a forum and also software tools for collaboration and they obviously charge a subscription fee.
Linux is currently a favorite operating system to use in cloud computing. Paul Cormier, the president for technologies and products of Red Hat stated that “for most corporations, hybrid cloud is the only practical way to the cloud.”
By linking with IBM, he believed that it will probably accelerate the progress of Red Hat in corporate cloud migrations market.
Red Hat is going to be a part of IBM but in the form of a distinct unit within the IBM’s Cloud team as IBM wants Red Hat to preserve its neutrality and independence in developing open-source.
The acquisition offer is $190 per share in cash which is 60 percent higher than the Friday’s closing price of Red Hat, only $116.68 per share.
A person who was close the acquisition deal explained that the over price is due to the strong cash flow and high growth of Red Hat.
Both companies’ boards of directors already approved IBM’s deal and it will probably be closed in mid-2019. Lazard, Goldman Sachs, and JPMorgan Chase were the firms that advised IBM on this deal while Morgan Stanley and Guggenheim were the ones responsible for advising Red Hat.
Featured Stories

ICT News - Mar 02, 2021
New ‘Deep Nostalgia’ AI Allow Users To Bring Old Photos To Life

ICT News - Mar 02, 2021
Bill Gates Prefers Android To iOS And Here Is His Reason

ICT News - Mar 01, 2021
UK Gambling Commission Orders Revision Of Slot Game Design

ICT News - Feb 26, 2021
Apple M1 MacBook Is Self-Destructive And May Not Last A Year, Users Report

ICT News - Feb 25, 2021
Australia Passed New Law That Requires Facebook And Google To Pay For News Content

ICT News - Feb 25, 2021
Build Your Own App And Earn Money With The Complete Android 11 Developer Bundle

ICT News - Feb 24, 2021
Apple Buys 3 To 4 Companies Per Week, Tim Cook Says

ICT News - Feb 24, 2021
You Can Now Watch Netflix Even Without An Internet Connection

ICT News - Feb 23, 2021
Jeff Bezos Stopped Mukesh Abmani's $3.4 Billion Deal To Protect His Dominance

ICT News - Feb 23, 2021
Huawei Moved Into Pigs Farming As Smartphone Sales Dip
Read more

Mobile- Mar 02, 2021
Google Pixel 4a Review: One-Hand Friendly, Affordable, And Powerful
Google Pixel 4a is the best Google can offer in a one-hand-friendly and affordable package

ICT News- Mar 01, 2021
UK Gambling Commission Orders Revision Of Slot Game Design
Let’s take a look at how the news unfolded and what exactly the terms of the revision are.

Features- Mar 01, 2021
This Indian Lake Is Filled With Hundreds Of Human Skeletons And Experts Don't Know How They Got There
Hidden in a remote snowy valley of the Indian Himalaya is lake strewn with human skeletons

Features- Mar 01, 2021
India Will Use Satellites To Protect Its Land And Sea
India successfully launched the Sindhu Netra satellite that will help the Navy and security agencies monitor suspicious ships operating in this region.

How To- Mar 01, 2021
Is Your Internet Plan Actually Right For Your? Here's How To Know
This post will help you choose the right internet package for yourself by figuring out how much internet speed you actually need.

Mobile- Mar 01, 2021
Xiaomi Mi 9T Pro: An All-Rounder, All-Screen Phone
If you want something decent but cheaper than Huawei P30 Pro and Samsung Galaxy Note 10 Plus, Xiaomi Mi 9T Pro is right up your alley
Comments
Sort by Newest | Popular