IBM acquires Red Hat

Body

Tony Pearson IBM Master Inventor, Senior IT Architect, and Event Content Manager

Well, it's Tuesday again, and you know what that means? IBM Announcements!

It's official -- IBM has acquired Red Hat! The deal was announced in October 2018 [IBM to Acquire Red Hat], and completed today [IBM Closes Landmark Acquisition of Red Hat].

(Note: We'll go back to storage tomorrow, but for today, I will talk only about the IBM Red Hat acquisition)

Back in 2007, my blog post [Double Happy Wedding] compared IBM's acquisition for a company that produced data migration software to the practice in Japan of waiting until the bride is five to seven months pregnant to have a wedding.

In business, the best acquisitions are the ones where both parties have been working together already. IBM and Red Hat have been working together for the past 20 years!

From 1999-2002, I was part of the team that help port Linux to the mainframe, based on Red Hat components. I was the first person to install Linux on a mainframe in Arizona, on a z800 machine, if you can remember that far back. My involvement with Linux was three-fold:

• Back then, I was the chief architect of DFSMS on the MVS operating system (now called z/OS). We needed a way to backup Linux data on the mainframe, so I helped develop the "Compatible Disk Layout" (CDL) which made the disk volume compatible between MVS, z/OS and Linux operating systems. Linux would read and write data on the volume, and then the Linux volume could be backed up or dumped to tape using existing DFSMS utilities.
• I led a team to test and debug all of the disk and tape storage drivers for Linux on the mainframe. One of my colleagues, who worked with Tom West, gave me a copy of Tracy Kidder's book [The Soul of a New Machine] as it seemed similar to our efforts. I highly recommend this book!
• I ran a series of roadshows, traveling to promote Linux. At each event we had two speakers. I was the key speaker, and one of my teammates would be working the keyboard to run all of the live demos. I played the role of a reporter, hot on the story of Linux, and my teammate would play the role of my newspaper editor/boss who would ask me questions from a script. I would then answer the question by showing off a Linux demo, while my teammate hit the appropriate keys to make it happen.

At the time, many in IBM did not understand the concept of "open source", or the idea of an operating system written by people on the Internet. I saw that Linux and Open Source was the future, but not everybody I worked with at that time shared that vision. Today, open source is the default choice for business.

(Note: If you are unfamiliar with [open source], I highly recommend Eric Raymond's book [The Cathedral and the Bazaar].)

On the surface, the deal appears fairly straightforward. IBM paid $34 Billion, and in return gets 13,000 new employees and $3.4 Billion in new annual revenues. But this deal is more than that. This acquisition redefines the cloud market for business. Here are some excerpts from the press release:

"Red Hat's open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM's innovation and industry expertise, and sales leadership in more than 175 countries. Together, IBM and Red Hat will accelerate innovation by offering a next-generation hybrid multicloud platform. Based on open source technologies, such as Linux and Kubernetes, the platform will allow businesses to securely deploy, run and manage data and applications on-premises and on private and multiple public clouds.

Red Hat will continue to be led by Jim Whitehurst and its current management team. Whitehurst is joining IBM's senior management team, reporting to Ginni Rometty. IBM will maintain Red Hat's headquarters in Raleigh, North Carolina, its facilities, brands and practices. Red Hat will operate as a distinct unit within IBM and will be reported as part of IBM's Cloud and Cognitive Software segment.

Most enterprises today are approximately 20 percent into their transition to the cloud. In this first chapter of their cloud journey, businesses made great strides in reducing costs, boosting productivity and revitalizing their customer-facing innovation programs.

The collective ability of IBM and Red Hat to unlock the true value of hybrid cloud for businesses is already resonating among customers moving to the next chapter of digital reinvention.

With Red Hat, IBM has acquired one of the most important software companies in the IT industry. Red Hat's pioneering business model helped bring open source – including technologies like Linux, Kubernetes, Ansible, Java, Ceph and many more – into the mainstream for enterprises. Today, Linux is the most used platform for development. Red Hat Enterprise Linux alone is expected to contribute to more than $10 trillion worth of global business revenues in 2019. By 2023, an additional 640,000 people are expected to work in Red Hat-related jobs.

IBM has committed to scaling and accelerating open source and hybrid cloud for businesses across industries, as well as preserving the independence and neutrality of Red Hat's open source heritage. This includes its open source community leadership, contributions and development model; product portfolio, services, and go-to-market strategy; robust developer and partner ecosystems, and unique culture."

This independence and neutrality works both ways: Red Hat will continue to work with other hardware manufacturers and IBM Power, Z and LinuxONE servers will continue to support all of the same distributions of Linux it did before, including Canonical Ubuntu Linux, and SUSE Linux Enterprise Server (SLES).

To this day, I still run Red Hat Enterprise Linux (RHEL) on my work laptop. This blog post was written using "gedit", a text-based editor that is part of the GNOME platform.