IBM will acquire Red Hat for $34 Billion

Michael K. Spencer
Oct 28, 2018 · 3 min read

We live in a world where Microsoft thinks it can remain relevant by buying GitHub, and owning open-source engineering data. That was $7.5 Billion and Microsoft can afford it, it’s the 2nd company to be worth $1 Trillion dollars. IBM had been on decline for a long time, but investing in blockchain and this definately does give them some life.

Interestingly, prior to the acquisition, Red Hat’s market capitalization stood at approximately $20.5 billion. In short Red Hat, Inc. is an American multinational software company providing open-source software products to the enterprise community.

Microsoft might be a Redmond, WA-based software behemoth, but it’s IBM that’s caught the big-fish of Red Hat.

It’s being hailed as one of the most significant tech acquisition of 2018 will unlock true value of cloud for business. The likes of IBM and Oracle have had trouble keeping up with AWS and Azure in the cloud. While Salesforce is clearly innovative and Alibaba is growing fast, IBM flirting with quantum computing and blockchain is worth noting.

As for the future of Linux, IBM will indeed remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem. The Cloud is eating the world. Software is eating itself, and technology goes on.

While Microsoft’s acquisition of LinkedIn and GitHub show greed of data harvesting that’s very profound, what does IBM’s play on Red Hat really mean?

Red Hat will remain a distinct unit in IBM.

Ginni Rometty is doing some interesting things in 2018. IBM and Red Hat also will continue to build and enhance Red Hat partnerships. Enterprise cloud partnerships are really that valuable. However as open-source pioneers get acquired by centralized legacy companies, what might happen to them in the long-term? Will developers be more likely to find alternatives?

Red Hat will join IBM’s Hybrid Cloud team as a distinct unit, preserving the independence and neutrality of Red Hat (is that even possible?).

IBM desperately wants to be seen as the world’s #1 hybrid cloud provider, offering companies a first class open cloud solution that will unlock the full value of the cloud for their businesses. Microsoft in its pivot to the Cloud and cybersecurity has really diversified its assets and direction, though is no longer a leader in artificial intelligence. At least IBM is trying.

Cloud is one of IBM’s four key strategic imperatives, or growth drivers. Realistically though will this bring Red Hat to an even wider audience or be its doom? It’s an expensive gamble. IBM and Red Hat want to provide an open approach to cloud, featuring unprecedented security and portability across multiple clouds. Sounds good in theory, but the future of open-source innovation has a way of going its own way.


Futurism articles bent on cultivating an awareness of exponential technologies while exploring the 4th industrial revolution.

Michael K. Spencer

Written by

Blockchain Mark Consultant, tech Futurist, a prolific writer. DM me on LinkedIn for freelance quotes:



Futurism articles bent on cultivating an awareness of exponential technologies while exploring the 4th industrial revolution.

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