IBM to acquire software company Red Hat

IBM is acquiring Red Hat, the world’s leading provider of open source technology. The transaction is by far IBM’s biggest acquisition, this is a game-changer for IBM and will change the cloud market, they are two best-in-class hybrid cloud providers, and they will help companies move beyond the efficiency economics of their initial cloud deployments, to the next chapter of the cloud, which is all about shifting business applications to the cloud.

Red Hat is the world’s leading provider of enterprise open source solutions, using a community-powered approach to deliver high-performing Linux, cloud, container, and Kubernetes technologies.

Red Hat and IBM are best-in-class hybrid cloud providers, and together, they will help clients address this issue, providing a path for all business applications to the cloud, and enabling our clients to unlock the full value of the cloud. 

Over the last couple of years, Linux has emerged as the number one operating system for business applications both on premise and on the cloud. In addition, containers and Kubernetes technologies have become the common fabric for both modernizing existing applications and writing cloud-native applications. 

Together, IBM and Red Hat will bring this value to our clients, building on the progress IBM has already made with our $19 billion hybrid cloud business.

We are committed to retaining Red Hat’s culture, leadership and practices. It’s important to remember that IBM has long been a champion of the open source community, starting with our $1 billion investment in Linux 20 years ago. With every crank of the technology cycle over the last two decades, the open source community has played a crucial development role, and that has never been more apparent than today, as companies work to shift their business applications to the cloud. Within that open source community, IBM and Red Hat have had a long and successful relationship. Between us, IBM and Red Hat have contributed more to the open source community than any other organization. And we share many common beliefs – starting with the fact that the IT world is, and will continue to be, hybrid.

IBM said Red Hat would continue to be led by Red Hat CEO Jim Whitehurst and Red Hat’s current management team. It intends to maintain Red Hat’s headquarters, facilities, brands and practices. “Knowing first-hand how important open, hybrid cloud technologies are to helping businesses unlock value, we see the power of bringing these two companies together, and are honored to advise IBM and commit financing for this transaction,” JPMorgan CEO Jamie Dimon said in a statement.

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