Buying Red Hat: Will It Help The Blue Giant Fight For Hybrid Cloud Leadership
In the fall of 2018, IBM decided to buy Red Hat for $ 34 billion. At the beginning of the month, the deal was officially closed . It became the largest in the field of software, and representatives of the “blue giant” got the right to call their company the largest player in the hybrid cloud services market. And there are many proponents of this view in the IT industry.
However, there are those who believe that they will not succeed.
Photos - Dustin Tramel - Unsplash
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The deal with Red Hat really allowed IBM to get closer to the Amazon and Microsoft cloud market leaders. However, the summit still has to be fought. Gartner noted that in its entire cloudy history, the “blue giant” is regularly confronted with technical and technological problems. Literally this year, the company dropped out of the race for a 10 billion Pentagon cloud contract , as its infrastructure did not meet the stated requirements.
Cloud sales in the corporate sector at IBM are also not going well. The company has included mainframe sales in its cloud transaction reports several times to improve quarterly performance. Therefore, to become a leader in the field of hybrid cloud, the corporation will need to make much more effort than it seems at first glance.
The process of innovation can be slowed down by the fact that IBM is gradually turning from an IT corporation into a holding company. She buys third-party technologies, integrates them, and then resells them under her brand. One of the former top managers of the corporation (who wished to remain anonymous) said that IBM did not want to finance their own projects, because the result often does not live up to expectations.
Experts fear not only IBM, but also their new partner - Red Hat. The company has long been independent. It is believed that the IBM corporate culture can affect the working environment at Red Hat, which could lead to an outflow of employees. This, in turn, has every chance to influence the development of cloud technologies of both companies.
The Blue Giant has long been a leader in the number of patents in the IT industry. Last year alone, the corporation received 9 thousand patents, a significant part of which relates to cloud computing. For example, the corporation developed a monitor for lightweight virtual machines based on the unikernel architecture. The company was also involved in container security and data migration technologies between the cloud and on-premise. Therefore, she has every chance in the near future to introduce more technology for a hybrid cloud.
Photos - SWEETHEART - Unsplash
New patents brought IBM and the deal with Red Hat. The corporation also received software and the OpenStack platform, which competes with the leader in the virtualization market - VMware. All this will allow the “blue giant” to offer hybrid clouds with its own OS and enterprise applications.
Red Hat will also contribute to the development of hybrid infrastructure. Red Hat Enterprise Linux (RHEL) ranks first (32.7%) in terms of the number of users among server operating systems. It is second only to Windows with its 49.6%. Moreover, according to IDC estimates , by the end of 2019, the total revenue of enterprises using RHEL will exceed ten trillion dollars.
It is also expected that by the end of 2019, 900 thousand jobs will be created in the Red Hat Enterprise Linux ecosystem. Until 2023, approximately 236 thousand “Fresh Blood” will be added to this number, and IBM support will help the company further develop its cloud-based operating system.
Both sides give reasonably convincing arguments in support of their points of view. Which of them will be right, only time will show. But judging by the value of Red Hat's shares and the growth of IBM's revenues after the merger, the picture is rather optimistic.
Related materials from our corporate blog:
However, there are those who believe that they will not succeed.
Photos - Dustin Tramel - Unsplash
')
Why it won't work
The deal with Red Hat really allowed IBM to get closer to the Amazon and Microsoft cloud market leaders. However, the summit still has to be fought. Gartner noted that in its entire cloudy history, the “blue giant” is regularly confronted with technical and technological problems. Literally this year, the company dropped out of the race for a 10 billion Pentagon cloud contract , as its infrastructure did not meet the stated requirements.
Cloud sales in the corporate sector at IBM are also not going well. The company has included mainframe sales in its cloud transaction reports several times to improve quarterly performance. Therefore, to become a leader in the field of hybrid cloud, the corporation will need to make much more effort than it seems at first glance.
The process of innovation can be slowed down by the fact that IBM is gradually turning from an IT corporation into a holding company. She buys third-party technologies, integrates them, and then resells them under her brand. One of the former top managers of the corporation (who wished to remain anonymous) said that IBM did not want to finance their own projects, because the result often does not live up to expectations.
Experts fear not only IBM, but also their new partner - Red Hat. The company has long been independent. It is believed that the IBM corporate culture can affect the working environment at Red Hat, which could lead to an outflow of employees. This, in turn, has every chance to influence the development of cloud technologies of both companies.
Who thinks differently
The Blue Giant has long been a leader in the number of patents in the IT industry. Last year alone, the corporation received 9 thousand patents, a significant part of which relates to cloud computing. For example, the corporation developed a monitor for lightweight virtual machines based on the unikernel architecture. The company was also involved in container security and data migration technologies between the cloud and on-premise. Therefore, she has every chance in the near future to introduce more technology for a hybrid cloud.
Photos - SWEETHEART - Unsplash
New patents brought IBM and the deal with Red Hat. The corporation also received software and the OpenStack platform, which competes with the leader in the virtualization market - VMware. All this will allow the “blue giant” to offer hybrid clouds with its own OS and enterprise applications.
Red Hat will also contribute to the development of hybrid infrastructure. Red Hat Enterprise Linux (RHEL) ranks first (32.7%) in terms of the number of users among server operating systems. It is second only to Windows with its 49.6%. Moreover, according to IDC estimates , by the end of 2019, the total revenue of enterprises using RHEL will exceed ten trillion dollars.
It is also expected that by the end of 2019, 900 thousand jobs will be created in the Red Hat Enterprise Linux ecosystem. Until 2023, approximately 236 thousand “Fresh Blood” will be added to this number, and IBM support will help the company further develop its cloud-based operating system.
Both sides give reasonably convincing arguments in support of their points of view. Which of them will be right, only time will show. But judging by the value of Red Hat's shares and the growth of IBM's revenues after the merger, the picture is rather optimistic.
Related materials from our corporate blog:
Source: https://habr.com/ru/post/461657/
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