Red Hat + IBM: Creating the leading hybrid cloud provider

[nir]

Editor’s note: A few moments ago, Red Hat president and CEO Jim Whitehurst shared this email with Red Hat associates.

 

A few minutes ago, we announced that Red Hat has signed an agreement to combine forces with IBM in the largest software company acquisition to date. Red Hat will remain a distinct unit in IBM.

 

Tomorrow (Oct. 29, 2018), we will have a company all-hands meeting where you will hear from me, Paul, and IBM chair, president, and CEO Ginni Rometty. I hope you can make it. Details on logistics follow this note.

 

In the meantime, I want to explain why I am excited and believe today’s news presents a tremendous opportunity for Red Hat and open source.

 

The first time I stepped foot on Red Hat’s former headquarters at North Carolina State University was a Sunday. I was there to meet with Matthew Szulik, Red Hat’s then CEO. The lights inside the building were off and the doors were locked. I didn’t know what to think. Matthew eventually showed up and we had a refreshingly different interview at a coffee shop, talking for a long time about Red Hat and open source. Everything Matthew told me about Red Hat made me more and more excited about the company and its opportunity. After our conversation, I knew that Red Hat was special and I wanted to be a part of it. As it turns out, that was the best cup of coffee I ever had. This is the best job I’ve ever had.

 

Like many of you, I joined Red Hat because it shares my values. I need a mission to fuel my work and Red Hat’s - “To be the catalyst in communities of partners and customers and contributors building better technology the open-source way.” - still drives me.

 

When I joined in January 2008, Red Hat was about 2,200 associates and the first open source software company to earn more than $500 million in revenues. Our portfolio was “just” Red Hat Enterprise Linux, Red Hat JBoss Middleware, and technologies to manage both. Today, there are approximately 12,600 Red Hatters and we have a portfolio that now spans hybrid cloud infrastructure, cloud-native app platforms, and management and automation.

 

We have barely scratched the surface of the opportunity that is ahead of us. Open source is the future of enterprise IT. We believe our total addressable market to be $73 billion by 2021. If software is eating the world - and with digital transformation occurring across industries, it truly is - open source is the key ingredient.

 

Powered by IBM, we can dramatically scale and accelerate what we are doing today. Imagine Red Hat with greater resources to grow into the opportunity ahead of us. Imagine Red Hat with the ability to invest even more and faster to accelerate open source innovation in emerging areas. Imagine Red Hat reaching all corners of the world, with even deeper customer and partner relationships than we have today. Imagine us helping even more customers benefit from the choice and flexibility afforded by hybrid and multi-cloud. Joining forces with IBM offers all of that, years ahead of when we could have achieved it alone. Together we can become *the* leading hybrid cloud solutions provider.

 

Importantly, Red Hat is still Red Hat. When the transaction closes, as I noted above, we will be a distinct unit within IBM and I will report directly to Ginni. Our unwavering commitment to open source innovation remains unchanged. The independence IBM has committed to will allow Red Hat to continue building the broad ecosystem that enables customer choice and has been integral to open source’s success in the enterprise. IBM is acquiring Red Hat for our amazing people and our incredibly special culture and approach to making better software. They understand and value how and why we are different and they are committed to allowing us to remain Red Hat while scaling and accelerating all that makes us great with their resources.

 

I appreciate that everyone will experience a range of emotions as a result of this news. Excited, anxious, surprised, fear of the unknown, including new challenges and working relationships - these are all ways I would describe my emotions. What I know is that we will continue to focus on growing our culture as part of a new organization. We will continue to focus on the success of our customers. We will continue to nurture our relationships with partners. Collaboration, transparency, participation, and meritocracy - these values make us Red Hat and they are not changing. In fact, I hope we will help bring this culture across all of IBM. Together we can.

 

I’d be remiss if I ended this email without saying thank you. Thank you to the original pioneers of open source and of Red Hat, to the Red Hatters who have contributed to this amazing company’s success throughout the last 25+ years, to our loyal customers and partners, and to the open source communities that are delivering innovation that is advancing technology at once unimaginable paces.

 

Open source, open formats, and open standards have not only changed technology; they have also changed our society for the good. Red Hat’s role in all of that cannot be understated. With IBM, we have the opportunity to accelerate this work at a greater scale and show everyone that open really does unlock the world’s potential.

 

Regards,

 

Jim

 

Source

 

Also: IBM to acquire Red Hat open-source software provider for $33B

 

[steven36]

IBM is betting the farm on Red Hat — and it better not mess up

 

 

Who expects a $34 billion deal involving two enterprise powerhouses to drop on a Sunday afternoon, but IBM and Red Hat surprised us yesterday when they pulled the trigger on a historically large deal.

 

 

Quote

 

IBM has been a poster child for a company moving through a painful transformation. As Box CEO (and IBM business partner) Aaron Levie put it on Twitter, sometimes a company has to make a bold move to push that kind of initiative forward:

Brilliant move by IBM. Transformation requires big bets, and this is a good one.

— Aaron Levie (@levie) October 28, 2018

 

 

They believe they can take their complex mix of infrastructure/software/platform services and emerging technologies like artificial intelligence, blockchain and analytics, and blend all of that with Red Hat’s profitable fusion of enterprise open source tools, cloud native, hybrid cloud and a keen understanding of the enterprise.

 

As Jon Shieber pointed out yesterday, it was a tacit acknowledgement that company was not going to get the results it was hoping for with emerging technologies like Watson artificial intelligence. It needed something that translated more directly into sales.

 

Red Hat can be that enterprise sales engine. It already is a company on a $3 billion revenue run rate, and it has a goal of hitting $5 billion. While that’s somewhat small potatoes for a company like IBM that generates $19 billion a quarter, it represents a crucial addition.

 

The company has the pieces in place now and a decent amount of marketshare, but Red Hat gives it a much more solid hybrid cloud story to tell. They can potentially bridge that hosted private cloud business with their own public cloud (and presumably even those of their competitors) and use Red Hat as a cloud native and open source springboard, giving their sales teams a solid story to tell.

 

IBM already has a lot of enterprise credibility on its own, of course. It sells on top of many of the same open source tools as Red Hat, but it hasn’t been getting the sales and revenue momentum that Red Hat has enjoyed. If you combine the enormous IBM sales engine and their services business with that of Red Hat, you have the potential to crank this into a huge business.

 

That’s because in spite of its iffy earnings reports over the last five years, Synergy Research reported that IBM had 7 percent of the cloud infrastructure market in its most recent report, which it defines as Infrastructure as a Service, Platform as a Service and hosted private cloud. It is the latter that IBM is particularly good at.

 

It’s worth noting that the deal needs to pass shareholder muster and clear global regulatory hurdles before they can combine the two organizations. IBM has predicted that it will take at least until the second half of next year to close this deal and it could take even longer.

 

IBM has to use that time wisely and well to make sure when they pull the trigger, these two companies blend as smoothly as possible across technology and culture. It’s never easy to make these mega deals work with so much money and pressure involved, but it is imperative that Big Blue not screw this up. This could very well represent its last best chance to right the ship once and for all.

 

Source

[steven36]

IBM is buying  Red Hat to try to fix and fix there already broke company  ,  IBM has not been nothing in years  they charge too much and if they  charge to much for Redhat it will die too . IBM is oneof  the places  were companies go to die . It would of been different if a successful company buy them . IBM are has beens  they used that old money and money they got from the Governments and Nazi gold. They old as dirt and played both sides both sides during World War 2  they got rich from both sides . And this is IBM's last chance to try to succeed against  the best AWS .