IBM to Acquire Linux Distributor Red Hat for $33.4 Billion


"IBM and Red Hat - the world's leading provider of open source cloud software - announced today that the companies have reached a definitive agreement under which IBM will acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion", the statement reads. Microsoft this year acquired open source software platform GitHub for $7.5 billion; chip maker Broadcom Inc agreed to acquire software maker CA Inc for almost $19 billion; and Adobe Inc agreed to acquire marketing software maker Marketo for $5 billion. Red Hat will become part of IBM's hybrid cloud unit, but will retain its own branding, facilities and practices, with Whitehurst and other senior management remaining in place.

IBM's and Red Hat's partnership has spanned 20 years, with IBM serving as an early supporter of Linux, collaborating with Red Hat to help develop and grow enterprise-grade Linux and more recently to bring enterprise Kubernetes and hybrid cloud solutions to customers. It's worth noting that, on the other hand, IBM has been relying on heavily on its Watson AI and its marketing gimmicks in the recent times. With that said, IBM has always been an open source proponent, so maybe it will work out well.

Computing giant IBM has leapfrogged rivals Amazon and Microsoft to become the largest hybrid cloud provider with a $34bn deal to buy software company Red Hat.

The deal, once it goes through, will make IBM top Hybrid Cloud provider in an emerging $1 trillion growth market.

The Red Hat purchase will give IBM an immediate cloud revenue boost growth as well as a suite of proven software products to sell through its global sales force. The two companies will remain committed to "the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network" open-source licenses and initiatives, according to the companies' joint statement. Hell, Red hat is a billion dollar company - yes, billion with a "B". The two are "committed" to open source, including contributions to the community.

IBM was founded in 1911 and is known in the technology industry as Big Blue, a reference to its once ubiquitous blue computers. You see, International Business Machines has acquired the open source darling, Red Hat.

"We will scale what Red Hat has deeply into many more enterprises than they're able to get to".

Headquartered in Raleigh, North Carolina, Red Hat charges fees to its corporate customers for custom features, maintenance and technical support, offering IBM a lucrative source of subscription revenue. Yet IBM and VMware are partners, with vSphere-powered clouds being one of IBM's bigger cloud successes.

"Importantly, Red Hat is still Red Hat". It took its name after a merger with another company, Red Hat Linux.