IBM has tried and tested several ways attempting to stay relevant in the modern technological era. Out of all those, the acquisition of Red Hat would be a high stake bet that will help them put up a fight against tech giants like Amazon and Microsoft. And while we knew this bet was coming, it is now finally done and dusted.
IBM, the 108-year-old company, announced on Tuesday that it has successfully completed its recent purchase, Red Hat. This is said to be the largest acquisition ever of a business software company.
So what’s in store for IBM?
The cloud computing market is over the skies in the present-day, but is dominated by juggernauts like Amazon and Microsoft. It can never happen that one talks about cloud service and not mention Amazon or Microsoft. Nonetheless, IBM does not want to be left out, and is hence making this $34 Billion move.
The acquisition of Red Hat, world’s leading service provider of open software solutions will let IBM have the big chuck of domination in the cloud industry. Seems like it is more of a win-win situation for both the firms. Red Hat will still function independently post-acquisition, however now exposing its technology to a wide range of clients. CEO Jim Whitehurst will still head Red Hat with Whitehurst joining IBM’s senior management
The current leaders of the cloud industry have the required skills and cash to establish data centres that run the cloud. IBM might be a little late to the business but not too late. Despite having the money and data centres, IBM has not yet struck a string in the industry. The Red Hat deal will certainly be the deviation IBM needs as per Ms Rometty.
At a total equity value of about $34 billion, IBM has acquired Red Hats’ common shares for $190 per share in cash.
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