What we know about IBM’s acquisition of Red Hat

 In IT News/Events, News

After 20 years of partnership, on October 28, 2018 IBM and Red Hat announced their intentions to take that partnership to the next level by revealing IBM will acquire Red Hat for $34 billion.

In the words of Ginni Rometty, IBM Chairman, President, and Chief Executive Officer, the merger is a “game-changer” that on a broad level better positions the companies to accelerate hybrid multi-cloud adoption.

The practical implications for IBM and Red Hat customers, however, have yet to be realized. Here’s what we know right now.

Big picture: What IBM’s acquisition of Red Hat means

The move will enable IBM to become the No. 1 hybrid cloud provider in the world. The company will be able to offer the only open cloud solution, thereby enabling customers to take full advantage of the cloud.

For Red Hat, the merger will allow the company to reach a wider audience, and thanks to the increased resources and scalability offered by IBM, it will be able to accelerate the impact open source will have on digital transformation.

Furthermore, together, IBM and Red Hat “will help clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management.”

Will Red Hat continue to operate independently?

Yes. Red Hat will join IBM’s Hybrid Cloud team. However, it will be its own individual unit and maintain its headquarters, facilities, brands, and practices.

This move affirms IBM’s support in “preserving the independence and neutrality of Red Hat’s open source development heritage and commitment, current product portfolio and go-to-market strategy, and unique development culture.”

There is no word yet on whether Red Hat will be available through IBM’s volume licensing program.

Maintain business as usual 

The announcement made back in October was just that – an announcement.

While the merger has been approved by the boards of directors of both IBM and Red Hat, it still remains subject to approval from Red Hat shareholders. The acquisition also requires regulatory approvals and other customary closing conditions. As a result, the deal is not expected to close until mid-2019.

Until then, business is status quo and no new actions are required. Open Red Hat quotes or pending orders will not be affected.

We’ll keep you informed as the merger progresses and more practical details or changes are revealed. For now, if you have questions or want to learn about how you can take advantage of both Red Hat and IBM technologies, contact your SHI Account Executive.

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