Why IBM's acquisition of Red Hat is a game-changer for the cloud industry

Q&A with Arvind Krishna, Senior Vice President, IBM Hybrid Cloud

Q. What are we announcing today?

A. IBM is acquiring Red Hat, the world’s leading provider of open source technology. This is a game-changer for IBM and will change the cloud market. We are two best-in-class hybrid cloud providers, and we will help companies move beyond the efficiency economics of their initial cloud deployments, to the next chapter of the cloud, which is all about shifting business applications to the cloud.

Q. Why Red Hat and why now?

A. It’s important to understand where our clients are in their cloud journey. All of them are running clouds. In fact, most of them are running multiple clouds. But they are only 20% or so into their cloud journey. They are eager to move their business applications to the cloud, the next chapter of the cloud, the next 80%. But to get this full business value from their cloud investments, and to move real business applications to the cloud, they need to be able to move and deploy applications and services between their multiple cloud environments. Today they are hesitant to do that because the proprietary nature of the cloud market makes it very difficult, because of security concerns in a multi-cloud environment, and because of inconsistent cloud management. Red Hat and IBM are best-in-class hybrid cloud providers, and together, we will help clients address this issue, providing a path for all business applications to the cloud, and enabling our clients to unlock the full value of the cloud. 

Q. What technologies do IBM and Red Hat bring to the table that solves this client need?

A. Over the last couple of years, Linux has emerged as the number one operating system for business applications both on premise and on the cloud. In addition, containers and Kubernetes technologies have become the common fabric for both modernizing existing applications and writing cloud-native applications. 

Together, IBM and Red Hat will bring this value to our clients, building on the progress IBM has already made with our $19 billion hybrid cloud business.

Q. Why is this important to IBM?

A. IBM has been investing to lead in the emerging, high value segments of the IT industry. Red Hat represents the latest and largest move as part of that high value strategy. They bring to IBM the world’s largest portfolio of open source technology, their innovative hybrid cloud platform, and a vast open source developer community. Together, we become the world’s leading hybrid multi-cloud provider. This is a game-changer for the cloud industry.

Q. How will IBM incorporate Red Hat’s open source ethos into the company?

A. We are committed to retaining Red Hat’s culture, leadership and practices. It’s important to remember that IBM has long been a champion of the open source community, starting with our $1 billion investment in Linux 20 years ago. With every crank of the technology cycle over the last two decades, the open source community has played a crucial development role, and that has never been more apparent than today, as companies work to shift their business applications to the cloud. Within that open source community, IBM and Red Hat have had a long and successful relationship. Between us, IBM and Red Hat have contributed more to the open source community than any other organization. And we share many common beliefs – starting with the fact that the IT world is, and will continue to be, hybrid.