My thoughts on IBM buying Red Hat for $34 billion

29 October 2018 by General

IBM buying Red Hat should be great for Open Source, good for IBM and healthy for the cloud wars.

It was just announced that IBM bought Red Hat for $34 billion in cash. Wow!

I remember taking the bus to the local bookstore to buy the Red Hat Linux 5.2 CD-ROMs. It must have been 1998. Ten years later, Red Hat acted as an inspiration for starting my own Open Source business.

While it's a bit sad to see the largest, independent Open Source company get acquired, it's also great news for Open Source. IBM has been a strong proponent and contributor to Open Source, and its acquisition of Red Hat should help accelerate Open Source even more. IBM has the ability to introduce Open Source to more organizations in a way that Red Hat never could.

Just a few weeks ago, I wrote that 2018 is a breakout year for Open Source businesses. The acquisition of Red Hat truly cements that, as this is one of the largest acquisitions in the history of technology. It's very exciting to see that the largest technology companies in the world are getting comfortable with Open Source as part of their mainstream business.

Thirty-four billion is a lot of money, but IBM had to do something big to get back into the game. Public cloud gets all the attention (Amazon Web Services, Google Cloud, Microsoft Azure), but hybrid cloud is just now setting up for growth. It was only last year that both Amazon Web Services and Google partnered with VMware on hybrid cloud offerings, so IBM isn't necessarily late to the hybrid cloud game. Both IBM and Red Hat are big believers in hybrid cloud, so this acquisition makes sense and helps IBM compete with Amazon, Google and Microsoft in terms of hybrid cloud.

In short, this should be great for Open Source, it should be good for IBM, and it should be healthy for the cloud wars.

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