nternational Business Machines Corporation (IBM) has completed its acquisition of Red Hat for $34 billion, thus making it the world’s second-biggest technology acquisition ever.
IBM has been struggling to adopt cloud-related technologies. With this deal, IBM will try to go after the market leaders like Amazon, Microsoft, and Google. The deal would position IBM as the leading hybrid cloud computing company and will help it to ramp up its cloud computing business.
IBM announced its intention to acquire Red Hat last year. “The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM CEO, Chairman and President.
According to IBM, this acquisition will bring together best-in-class hybrid cloud providers and will enable companies to move all business applications to the cloud. IBM also stated that it will remain committed towards Red Hat’s open governance, open source contributions and participation in the open source community. Previously, the company has made it clear that Red Hat will operate as a distinct unit within IBM’s Hybrid Cloud team.
Red Hat will still be lead by its CEO James Whitehurst and its management team, but Whitehurst will report to IBM’s Rometty directly. IBM’s cloud revenue has grown from 4% in 2013 to 25% today and this acquisition is expected to escalate it even further.
In a related development, according to Matthew Miller, Fedora Project Leader, said that Red Hat will continue its contribution towards open source community and valuable projects like Fedora because IBM is committed towards Red Hat’s independence.