My Initial Thoughts on IBM’s Acquisition of Red Hat: Open Source, ICS, and Culture
Bill Malchisky October 29 2018 10:05:00 PM
As you most likely heard, on Sunday, 28 October, IBM and Red Hat (RH) announced their longstanding collaboration efforts will become permanent: IBM is acquiring Red Hat. In watching the Twitter threads rooted on the announcements, many die-hard independent pro-Linux geeks became irate simply because they felt Red Hat was the firm to keep enterprise corporations in-check, not join them. In the words of Red Hat's Paul Cormier, "Today is a banner day for open source."--See Red Hat Link 4 below.
In speaking/chatting with several people in the IBM Community Sunday evening to learn their concerns and perspectives, along with Mr. Cormier, I too offer a more optimistic take.
First, as presented in my initial Lotus on Linux Report in 2009, IBM was prior and remains today a stalwart proponent of open source work on many levels. Much of what they do behind-the-scenes to support developers is never known to the public, but it has a huge impact. Additionally, I will add that IBM is a massive supporter of FOSS--See IBM link 4 below for a great reveal.
When I discuss these facets, almost everyone in the room has no idea how strongly IBM supports open source. Most know of one or two recent efforts. It is nice to surprise people, and even be alerted to something new. On Sunday, 10/28/2018, Hale Motlevski alerted me via Twitter that IBM released their IBM Plex typeface under OFL.
Second, since I started following their activities in 1999, IBM and Red Hat typically make an announcement about every two years or so regarding another project where they collaborated. Thus, have they have a long time-line of successful ventures. This track record bodes well from my perspective.
What Does This Mean for the ICS Community?
At less than a day old, the overall fallout remains fluid. From my years of blogging and presenting in the IBM Community, here is perspective in four quick points:
1. The initial announcement indicates that IBM wanted to increase their hybrid cloud market share and sought a trusted partner who is successful in this space. Beyond that, IBM gets an OS of which they made contributions for 20 years or so;
2. The recent announcement of supporting CentOS on IBM Domino V10 becomes a stronger story with the RH acquisition;
3. Continued support for Linux across all platforms would seem to remain unchanged; with perhaps an even stronger coupling in some cases;
4. While SLES is preferred for Linux on IBM Z by a few mainframe Linux techs I know, though RH supports IBM Z;
I will keep in-touch with my fellow Champions on the mainframe side to learn if there will be a shift in favorability or increased support for IBM Z.
A Reason for Concern
RH's culture is quite different than IBM's. In fact, corporate culture mismatch is a leading cause of failed M&A proceedings. For now, IBM indicated that RH will remain a separate business unit. Many will quickly refer to the Lotus acquisition and how IBM handled that. Initially they were their own entity, then they were brought into the fold and all the yellow icons were made blue with re-branding--for starters. What is different here is that IBM did not have a track record with Lotus like they do with RH. I think this is a significant distinction in that IBM sees the value and benefits of RH's success over an extended period of time. Additionally, through IBM & RH's near bi-annual announcements, IBM understands RH's value and what they bring to the table better than say other acquisitions. Nitix Foundations comes to mind here.
But to IBM's credit, they came out early and indicated that they are committed to "...retaining Red Hat’s culture, leadership and practices." --IBM link 1. below.
Summary
What I like about this position are the benefits for the ICS products which I value. Hybrid cloud is huge for many companies, and most of my customers (past and present) have some sort of a cloud strategy. IBM strengthening is hybrid cloud position creates new revenue opportunities for both companies. Open Source stands to do well with an increased advocate in their corner. There will be plenty of people who can discuss the finer points on the cloud side of things better than I, but from the ICS on-premises perspective I like the prospects. If IBM can maintain its creed on culture retention and given their longstanding work with RH, I am optimistic with the success of the venture. Like all M&A ventures, time will speak volumes on the opportunity's wisdom.
If you have a downside, please comment below.
Press Releases and Related Articles
IBM
1. Why IBM's acquisition of Red Hat is a game-changer for the cloud industry
2. IBM To Acquire Red Hat, Completely Changing The Cloud Landscape And Becoming World's #1 Hybrid Cloud Provider
This includes the IBM investor call details for Monday, 29 October, 8:30 AM EDT
3. IBM Cloud is the cloud for smarter business
4. FOSS - IBM's approach to open technology
5. FOSS - IBM Announces Major Commitment to Advance Apache®Spark™, Calling it Potentially the Most Significant Open Source Project of the Next Decade
Red Hat
1. IBM TO ACQUIRE RED HAT, COMPLETELY CHANGING THE CLOUD LANDSCAPE AND BECOMING WORLD’S #1 HYBRID CLOUD PROVIDER
2. Red Hat + IBM: Creating the leading hybrid cloud provider
3. Important Additional Information and Where to Find It
4. A monumental day for open source and Red Hat
Others
CNBC: IBM to acquire Red Hat in deal valued at $34 billion
Bloomberg: IBM Chases Amazon Into Cloud With $33 Billion Red Hat Purchase
Business Insider: IT'S OFFICIAL: IBM is acquiring software company Red Hat for $34 billion
Attribution: The two images with gray backgrounds above are from the IBM.com website's front page banner on 10/28/2018. The image below with the black background is via Red Hat's Twitter feed.
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