One of the largest product based company IBM has announced that it will soon be going to acquire open source software company Red Hat for $34 Billion. This deal is going to be the largest deal of acquisition which IBM is going to have. The deal will also help the IBM to expand its reach as an enterprise could service provider.
Red Hat describes itself as one of the leading provider of an open source software and services for the enterprise clients which is more focusing on a cloud computing and Linux servers. In the year 2012, it became as one of the first company which provides the open source software to surpass the $1 Billion in revenue. It will now be going to become a part of IBM’s hybrid cloud domain.
In a report, IBM reveals that its services will allow the more business to shift their operation on the web and that is the first proprietary nature of existing cloud system which means that is much more harder to move and secure the data from a system to system.
IBM also revealed that this acquisition would allow the company to expand its cloud computing services.
Chairman, President, and CEO Ginni Rometty says that “most companies today are only 20 percent along their cloud journey, renting [computer] power to cut costs. The next 80 percent is about unlocking real business value and driving growth.” For its part, Red Hat President and CEO Jim Whitehurst noted that IBM will allow his company reaches a far wider audience and that IBM will preserving the company’s “unwavering commitment to open source innovation.”
“This acquisition we are doing for growth synergies. This is not about cost synergies at all,” Rometty said in the interview. “This deal represents the culmination of IBM’s existing partnership with Red Hat, and, in our view, allows IBM to gain a highly strategic asset to advance its hybrid cloud initiatives,” Barclays analysts wrote in a research note.
“Joining forces with IBM will provide us with a greater level of scale, resources, and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience,” said Red Hat's President and CEO Jim Whitehurst.
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