IBM makes $34bn offer for cloud computing firm Red Hat

[Master Disaster]

It looks as though IBM will acquire cloud computing company Red Hat, the deal is all but done and is waiting for approval from shareholders and regulators (a process expected to take around a year).

Quote

In a massive deal that could reshape cloud computing, IBM is acquiring open software company Red Hat for $34 billion.

The companies called the deal, which still needs approval from shareholders and regulators, the "most significant tech acquisition of 2018." The deal is expected to close in the second half of 2019.

As I'm sure you all know, Cloud Computing refers to any software or service than runs online. IBM are saying this acquisition will change the way existing cloud services interact with each other and will allow for data to be moved around various and competing services much easier.

Quote

The cloud, simply, refers to software and services that run on the internet instead of your computer. Dropbox, Netflix, Flickr, Google Drive, Microsoft Office 365, Yahoo Mail are all cloud services.

These various platforms often don't allow data to easily move between them.

Red Hat says its software solves that issue by allowing data to be more easily moved around.

Together, IBM and Red Hat say they will be "strongly positioned to address this issue."

IBM have vowed to continue partnerships set up by Red Hat including with Microsoft, Amazon & Google.

Quote

IBM buying Red Hat means that it will start providing technology to its biggest competitors, including Amazon, Microsoft and Google. Red Hat partners with all of them, and IBM said it will continue the partnerships after the acquisition and work to expand on them.

CFO Jim Kavanaugh told investors during a conference call earlier this month that its cloud unit brought in $19 billion, up more than 20% from the same time last year.

https://edition.cnn.com/2018/10/28/tech/ibm-red-hat/index.html

 

Sounds like IBM have some big plans for the future of cloud computing. I've got to be honest, there have been multiple times I've wished it was possible to send files between Google Drive and One Drive. I hope they achieve this, it's something that really would help.

[williamcll]

What is the reason people choose red hat over other kinds of linux? I mean plenty of them offer cloud services too.

[Granular]

Inb4 Red Hat becomes Big Blue Hat.

I don't necessarily see a reason to be worried, IBM has earned some trust from me by making their POWER architecture entirely open.

[mr moose]

Now they are going to have to re-educate watson regarding red hats and clouds.

[ichihaifu]

I'm not happy at all about this acquisition. Having worked with and at IBM, this can be very bad for RHEL based products, like very widely adopted CentOS and Fedora. (IBM is extremely pro-profit enterprise, which leaves no room for private non-commercial products.)

 

Not to mention Ansible. Ansible has been a very promising and actually quite a bit used system automation and configuration tool in Linux enterprises. It would be a shame if it gets the blue hat treatment, i.e. slap a bill to every little version of it that is not AWX.

 

There is also negative impact for existing RHAT customers, thanks to new and renewed contracts, support and licensing models that IBM brings with it.

 

On 10/29/2018 at 8:55 AM, williamcll said:

What is the reason people choose red hat over other kinds of linux? I mean plenty of them offer cloud services too.

Commercial support.

Also RHCSA and other certifications provided by Red Hat. Basically they have official education channels to their product.

 

Edited October 30, 2018 by ichihaifu
Corrected IBM description and removed EDIT tag.

[230276_1454181718]

2 hours ago, ichihaifu said:

I'm not happy at all about this acquisition. Having worked with and at IBM, this can be very bad for RHEL based products, like very widely adopted CentOS and Fedora. (IBM is extremely pro-enterprise, and operates based on profit only, which leaves no room for private non-commercial products.)

 

EDIT: Not to mention Ansible. Ansible has been a very promising and actually quite a bit used system automation and configuration tool in Linux enterprises. It would be a shame if it gets the blue hat treatment, i.e. slap a bill to every little version of it that is not AWX.

 

There is also negative impact for existing RHAT customers, thanks to new and renewed contracts, support and licensing models that IBM brings with it.

 

Commercial support.

Also RHCSA and other certifications provided by Red Hat. Basically they have official education channels to their product.

 

Had a giggle after reading your comment and seeing your profile pic >.>

[AlexGoesHigh]

I'm not very aware of how IBM deals with acquisitions, but reading comments in lots of places, people are highly concerned about the future of Fedora and Centos.

 

I'm not too much into Linux but people love Fedora and Centos.

[Syntaxvgm]

Almost everything I use is CentOS. I'm not really in tune enough to know how much I should actually be concerned, but I am concerned anyway. I think, if I'm guesstimating right, this is about a quarter of IBMs total net worth. That's concerning mainly because IMO that would mean they cannot afford to not milk this. 
My main worry is that you will have to actually register CentoOS by manually signing up for license keys that work per instance.  

For redhat itself, I really don't care personally since I'm not a linux pro and I do not keep up with this stuff, but a guarantee IBM will slowly shove DB2 and WAS in there, raw and unlubricated. All I know about IBM is they will tell both the RH employees and the customers that nothing is changing, which will be true for a bout a year until everything has died down. 

[exetras]

7 hours ago, williamcll said:

What is the reason people choose red hat over other kinds of linux? I mean plenty of them offer cloud services too.

Red Hat (CentOS) is considered one of the more stable OS out there, They tend to priorities stability over big changes. So when you do a point update (7.0 to 7.6) everything will keep on working like it did before. The support you get from Red Hat is also known to be very good.

 

One of the scary part of the acquisition is all the other tools maintained by Red Hat, like Ansible and Open Stack.

 

Edit: Here is a list of popular affected Sofwoare/OS:

RHEL

CentOS

Fedora

CoreOS

Ansible

Openstack

Openshift

Ceph

etcd

Prometheus

 

[bcredeur97]

so what will we get now? AIX redhat? lol

[Sniperfox47]

5 hours ago, exetras said:

Red Hat (CentOS) is considered one of the more stable OS out there, They tend to priorities stability over big changes. So when you do a point update (7.0 to 7.6) everything will keep on working like it did before. The support you get from Red Hat is also known to be very good.

 

One of the scary part of the acquisition is all the other tools maintained by Red Hat, like Ansible and Open Stack.

 

Edit: Here is a list of popular affected Sofwoare/OS:

RHEL

CentOS

Fedora

CoreOS

Ansible

Openstack

Openshift

Ceph

etcd

Prometheus

 

I find it amazing that the company behind the most stable Linux distro (Cent) is the same company bankrolling the most unstable (Fedora)

[ZacoAttaco]

Thanks for the informative post, I always appreciate the more business side of the tech industry as this kind of news is more relevant to those working in the enterprise sector, so it's good to know what's going on and to be able to discuss it with colleagues.

[Canada EH]

16 hours ago, Master Disaster said:

Cloud Computing

Who knows what mining they done of the data in the cloud to sell for profit. Storage prices are always going down, until the next fad. The average person does not need much storage data.

 

I can not trust news sources like CNN, they are just not trustworthy.

I prefer unbiased news reporting.

[ichihaifu]

20 hours ago, exetras said:

Red Hat (CentOS) is considered one of the more stable OS out there, They tend to priorities stability over big changes. So when you do a point update (7.0 to 7.6) everything will keep on working like it did before. The support you get from Red Hat is also known to be very good.

Stability is only a small part of it.

In fact, there is no real reason you could not just blindly pick up any other linux distribution and roll with it, if you only looked at stability. By far the biggest contributors are support channels and deployment/configuration tools that come with package, plus the availability of certification programs and free platform to demo and develop on.

 

RHEL(Red Hat Enterprise Linux) is so simple to roll out and manage on large, combined with very good training programs they offer - that hiring capable workforce to develop and support the platform is relatively cheap, as opposed to hiring very experienced linux developers to work on other platforms.

 

In the shadow of above, stability is secondary and will usually get considered afterward.

 

Smaller shops can roll with CentOS until they grow large enough to need RHAT support, at which point they can easily upgrade to RHEL licensing models and become entitled for it.

 

 

21 hours ago, Syntaxvgm said:

Almost everything I use is CentOS. I'm not really in tune enough to know how much I should actually be concerned, but I am concerned anyway. I think, if I'm guesstimating right, this is about a quarter of IBMs total net worth. That's concerning mainly because IMO that would mean they cannot afford to not milk this. 
My main worry is that you will have to actually register CentoOS by manually signing up for license keys that work per instance.  

For redhat itself, I really don't care personally since I'm not a linux pro and I do not keep up with this stuff, but a guarantee IBM will slowly shove DB2 and WAS in there, raw and unlubricated. All I know about IBM is they will tell both the RH employees and the customers that nothing is changing, which will be true for a bout a year until everything has died down. 

Main concern with IBM comes from their lack of innovation and toxic pro-profit business culture. If there is no profit to be had, it will get shaved.

This makes freely distributed tools exetras mentioned prime targets for such cuts, if the business cannot find way to make profit out of them - which they absolutely will try, because this transaction is massive enough to go down in history books.

 

There will not be any immediate impact, but this is at least as concerning as Article 13 in Europe, in the long term, and should be monitored with care.

(Maybe not entirely on that scale, because general consumer will never see the impact, but on enterprise space it is very considerable news)

 

Here is a news article that will hopefully make it a bit easier to understand the circumstances: https://gizmodo.com/what-will-become-of-linux-giant-red-hat-now-that-it-sol-1830074632/amp