The future of Red Hat: How will IBM’s acquisition affect the company?

Only 11 days have passed since the announcement about IBM’s acquisition of Red Hat. Yet industry analysts are busily projecting the effects that this notable acquisition will have on the future of Red Hat.

Having had a chance to compare notes with Richard Slater, principal consultant and DevOps/SRE Leader at Amido (an independent, vendor-agnostic technical consultancy focused on cloud native technology and located in London), I feel compelled to toss some reflections and a few hopes into the mix.

Given that the price tag for RedHat represents the third largest acquisition since Dell’s acquisition of EMC Data Storage and Avago’s acquisition of Broadcom, a change in how we all think of IBM may be in order. Slater likes the idea of giving the joined company a new name, suggesting that “Big Purple” or “Blue Hat” would properly reflect the significance of the $34 billion deal. I have some fondness for “IBlinux.”

Though IBM is unlikely to even consider changing its name, many of us will likely be thinking of IBM differently until the distinction between these two companies begins to blur. That blurring is likely to take a lot of years.

Gazing through the financial microscope, IBM seems to be making a wager on a small portion of Red Hat — OpenShift (RedHat’s comprehensive and self-contained Kubernetes solution) — to help catch up in the cloud market. And this could be one of those marriages made in heaven. OpenShift hasn’t been marketed as well as Kubernetes itself. At the same time, its use by some of the big names — Barclays to UPS and Hilton to Lufthansa — has demonstrated its effectiveness, agility, and resilience. IBM may be able to employ its global outreach to encourage mainframe and legacy clients to adopt OpenShift as their cloud platform and help Red Hat reach markets that it has struggled with in the past.

This deal also means IBM will be doing business with some of its cloud competitors — Amazon Web Services, Google Cloud Platform, and Microsoft Azure come to mind. This represents an interesting twist even though IBM insists that Red Hat will be maintained as a separate business unit.

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