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IBM Closes Acquisition of Red Hat for $34B

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Re: IBM Closes Acquisition of Red Hat for $34B

#21

Post by jbob2000 »

bmicklea wrote: post #17
ilovecaching wrote: post #6

Feel sad, I know it's just the way things go in big business, but watching a prime example of a fiscally successful company built on open source who has committed so many resources to kernel development and making the Linux community better get bought by a beached whale like IBM just shakes me.

I run Red Hat's Developer program, our developer tools portfolio and our developer relations team. When I first heard the news I had a similar reaction. But I've worked with IBM'ers in open source projects for years and they've always been great contributors. Perhaps more importantly both IBM and Red Hat are very committed to not changing our open culture and open source development model. That's been the source of o…

Open source doesn't make money, you're at IBM now to save their failing cloud business. If you can't do that, expect your time on open source to dry up.

Re: IBM Closes Acquisition of Red Hat for $34B

#22

Post by baybal2 »

bmicklea wrote: post #20
baybal2 wrote: post #13

Earlier quoted context omitted.

Yes, I am shocked too. Who will be developing the lion share of what makes "the Linux desktop?" If IBM wants to ever make money of this deal, the only way available for them is to kick everybody, but support people, and crank up fees to the max from big corporate clients. Ubuntu has certainly stole the crown of "the server linux" as being built on a more sound foundation, and being more conservative in bringing disru…

Red Hat's commitments to the open source projects it works on from linux, to kubernetes, to java, and many others will remain unchanged.

I hope so, but how will IBM make money then?

Re: IBM Closes Acquisition of Red Hat for $34B

#23

Post by jake_morrison »

yitchelle wrote: post #14

Does this acquisition open up the market for a Linux company to move into the Linux enterprise space? Maybe Ubuntu could pivot into this space.

Probably Ubuntu will be bought by Microsoft.

With the cloud, especially containers, there is little future in a business that involves paying for operating systems licenses.

Most interesting is probably supporting legacy versions of operating systems for customers who value compatibility to be able to continue to run existing applications with the minimum changes.

Re: IBM Closes Acquisition of Red Hat for $34B

#24

Post by bryanlarsen »

yitchelle wrote: post #14

Does this acquisition open up the market for a Linux company to move into the Linux enterprise space? Maybe Ubuntu could pivot into this space.

Ubuntu is making a lot of money from cloud and they probably see that as the future rather than enterprise. (They get a few pennies for every Ubuntu VM spun up on AWS etc).

Re: IBM Closes Acquisition of Red Hat for $34B

#25

Post by brianwawok »

AznHisoka wrote: post #19
neogodless wrote: post #9

Share price was $187.71 prior to the announcement. As posted in the article - $190/share agreed purchase.

And to give even more context, it was $170.00 back in Oct 29 when it was first announced. Thus, if you bought then and sold now, you'd have a 11.7% return in 8 months. The S&P index would've returned 12% in comparison. Not risk-free by any means, but almost certainly less risk than buying the S&P index during that time period. There was a reason Warren Buffett parked a ton of cash into Red Hat stock after it was boug…

Is it less risky? Say a decent chunk of your portfolio in a single stock? And something weird happens during due diligence , not only is the acquisition over - the stock will bomb.

Not sure how often acquisitions fall through after being announced, I assume very low. But still seems similar or higher risk then a stock fund.

Re: IBM Closes Acquisition of Red Hat for $34B

#26

Post by jaboutboul »

jake_morrison wrote: post #23
yitchelle wrote: post #14

Does this acquisition open up the market for a Linux company to move into the Linux enterprise space? Maybe Ubuntu could pivot into this space.

Probably Ubuntu will be bought by Microsoft. With the cloud, especially containers, there is little future in a business that involves paying for operating systems licenses. Most interesting is probably supporting legacy versions of operating systems for customers who value compatibility to be able to continue to run existing applications with the minimum changes.

I sort of agree with this. Either Microsoft will purchase Ubuntu outright from Shuttleworth or they will just create Microsoft Linux, in whatever form that is, probably something more container focused than a general purpose OS.

Re: IBM Closes Acquisition of Red Hat for $34B

#28

Post by calgoo »

I really hope IBM can keep their fingers out of Red Hat, if not, it does not matter how many promises they make, they will run it into the ground. If they actually manage to keep away, and let their cloud business grow without interference; they actually have a chance to grab a big piece of the cloud business.

Re: IBM Closes Acquisition of Red Hat for $34B

#29

Post by bmicklea »

jbob2000 wrote: post #21
bmicklea wrote: post #17

Earlier quoted context omitted.

I run Red Hat's Developer program, our developer tools portfolio and our developer relations team. When I first heard the news I had a similar reaction. But I've worked with IBM'ers in open source projects for years and they've always been great contributors. Perhaps more importantly both IBM and Red Hat are very committed to not changing our open culture and open source development model. That's been the source of o…

Open source doesn't make money, you're at IBM now to save their failing cloud business. If you can't do that, expect your time on open source to dry up.

Open source creates market share, that's the foundation on which money can be made. Red Hat's business model wasn't charging for the open software, it was charging for the expertise we have in supporting that open software. The more market share the open source software has, the greater the monetary opportunity for us and the more we can put back into the communities. Red Hat has offices in ~40 countries and IBM is in ~175. That's a lot more touch points for us.

Re: IBM Closes Acquisition of Red Hat for $34B

#30

Post by kryptiskt »

baybal2 wrote: post #22
bmicklea wrote: post #20

Earlier quoted context omitted.

Red Hat's commitments to the open source projects it works on from linux, to kubernetes, to java, and many others will remain unchanged.

I hope so, but how will IBM make money then?

Red Hat is already making money with the current business model.
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