IBM completes $34bn purchase of Red Hat

It has been coming for some time, but now IBM is about to join the big players when it comes to cloud computing, as it signs off on its $34 billion acquisition of Red Hat.

Red Hat specialises in providing open-source enterprise software through cloud technology, and bringing it in line with IBM is set to open up both companies and their systems to new opportunities. IBM used to be one of the biggest in the market thanks to its focus on enterprise, but it got left behind when hardware started to become less popular, meaning more companies were instead looking to access tools without having physical copies. It now allows IBM to say it is one of the leading hybrid cloud companies, and try and go after some of the market share taken up by Amazon and Microsoft.

IBM’s chair, CEO and president, Ginni Rometty called the deal a “game-changer” and said, “it changes everything about the cloud market.” This move will allow all its customers to begin migration towards the cloud, in line with a company that can now bring all its hardware solutions into an open-source format, thanks to Red Hat.

Given that IBM’s cloud revenue stood at 4% back in 2013, and it ranks at a quarter now, it is clear where it believes the future lies for profit margins. IBM has also made clear that Red Hat will remain independent and continue to develop under its own goals.

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