Partnerships / Acquisitions

IBM Buys Red Hat For $34B

IBM has announced that it will acquire Red Hat, the world’s leading provider of open source cloud technology, for approximately $34 billion.

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM chairman, president and chief executive officer. “IBM will become the world’s number one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs,” she added. “The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales.”

Together, IBM and Red Hat aim to help clients create cloud-native business applications faster, boost greater portability and security of data and applications across multiple public and private clouds.

Red Hat will continue to be led by president and CEO Jim Whitehurst and Red Hat’s current management team. In addition, Whitehurst will join IBM’s senior management team and report to Rometty. IBM plans to maintain Red Hat’s headquarters, facilities, brands and practices.

“Open source is the default choice for modern IT solutions, and I’m incredibly proud of the role Red Hat has played in making that a reality in the enterprise,” said Whitehurst. “Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation.”

IBM and Red Hat have been collaborating for 20 years, with both companies working together to develop and grow enterprise-grade Linux and, more recently, to bring enterprise Kubernetes and hybrid cloud solutions to customers.

“Today’s announcement is the evolution of our long-standing partnership,” said Rometty. “This includes our joint Hybrid Cloud collaboration announcement in May, a key precursor in our journey to this day.”

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