IBM and Red Hat: How’s that going?

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Michel Isnard, Red Hat EMEA
Michel Isnard, Red Hat EMEA

It has now been four months since Red Hat was officially acquired by IBM, and the open source vendor is keen to reassure its partners and customers that everything is just the same.

The acquisition of Red Hat by IBM closed in July this year, after being announced in October 2018. IBM paid $34 billion for Red Hat – or $190 a share – which is a 63% premium. 

With the purchase, IBM is now able to entrench itself more deeply in the open source market, specifically Linux, which is continuing to grow as other operating systems stagnate and shrink. It also plays into the mass move into cloud, specifically multi and hybrid cloud, and it’s here that Red Hat’s Kubernetes container platform OpenShift, it’s thought, will be particularly useful for customers.

Speaking to ITWeb at Red hats' annual forum at the Gallagher Convention Centre in Midrand last week – amid a sea of the company’s trademark red fedoras – Michel Isnard, EMEA sales vice president, said the only change he’s noticed is the creation of a ‘synergy office’ to foster cooperation between the companies.

“Considering the size of the acquisition, we have been asked to do a good job, and continue doing what we’re doing.We have to do our job as we were doing so before, and that’s the best way to confirm that it was very good idea for IBM to acquire Red Hat.”

Battle of the apps

Isnard said there’s not a single CIO with whom he’s spoken to recently ’who doesn’t have a move-to-cloud strategy’. Hybrid cloud is now seen as a ‘safe harbour’ by CIOs, and one in which they can continue to realise the value from their existing infrastructure, while starting to experiment with cloud.

He said companies are now realising that their competitive advantage is to be found in applications, and ‘this is where the battle is happening’.

Commercially, Red Hat deals with IBM as a partner, just like other vendors such as Microsoft, he added.

“What IBM bought when they acquired Red Hat is a very strong technology, and a way of making this technology compatible with enterprise class research. They have bought a business model which has been able to monetise open source solutions up to revenue of $3 billion-plus. And in this business model is our ecosystem. They are completely part of what we do every day, and how we do it. We need them, they need us. We cannot damage that ecosystem by giving priority to one partner. And they also bought us because of our culture. We bring something which is very much in sync with the world.”

Looking ahead, is it possible that IBM will work towards ensuring Red Hat is the preferred stack to run on its Power systems?

Dion Harvey, general manager of the local business, said it is ‘logical’ that it will see more of this, and points to the fact that Red Hat Enterprise Linux is being used successfully on many banking and telco mainframes in the EMEA region,

“We wait to see it evolve,” he said.

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