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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

#61

Post by DocTomoe »

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.

Without a timeframe, that statement is worthless.

And that timeframe might be shorter than you'd think. My guess would be "days".

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

#63

Post by fny »

rusticpenn wrote: post #53
ilovecaching wrote: post #35

Earlier quoted context omitted.

People are horrified because IBM is a sinking ship and a monolithic big business that will attempt to look at everything from a fiscal perspective with no real love for what made Redhat great. Is IBM really going to give Systemd, Fedora, the full time kernel maintainers a break and pay them to make “unprofitable” software? We’re also seeing the end of independence that was making the open source model work with digni…

IBM spends so much on R&D. I am not sure if the company is solely focussed on short term profits.

IBM spends a fraction of what other household names spend.

> That’s according to an analysis by Recode, which found the e-commerce giant [Amazon] spent nearly $23 billion on R&D in 2017. Technology companies rounded out the top five, collectively spending $76 billion on R&D last year. The other tech companies that spent the most on R&D were Alphabet (GOOG), Intel Corp. (INTC), Microsoft Corp. (MSFT) and Apple Inc. (AAPL). Alphabet was in second place with R&D spending of $16.6 billion while Intel had spending of $13.1 billion and Microsoft spent $12.3 billion. Apple rounded out the top five with $11.6 billion. Meanwhile, Johnson & Johnson (JNJ) spent $10.4 billion while Ford Motor Co. (F) weighed in with 2017 R&D spending of $8 billion. Potentially telling, International Business Machines Corp. (IBM), once the innovator in techland, spent the least at $5.4 billion. (See also: IBM Traders See Stock Plunging 20%.)

[0]: https://www.investopedia.com/news/amazons-23b-rd-budget-sets...

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

#64

Post by airstrike »

neogodless wrote: post #46
AznHisoka wrote: post #19

Earlier quoted context omitted.

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…

$116.68 right before the announcement! The $172 was the immediate jump. https://finance.yahoo.com/quote/RHT/chart?p=RHT (See Date Range controls.)

I think he meant "announcement of the closing", which I agree is a bit confusing

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

#65

Post by Zigurd »

giancarlostoro wrote: post #43
DevX101 wrote: post #31

Earlier quoted context omitted.

You don't spend $34B to not interfere.

Right but if you dont want to see that 34B disappear into nothing you dont want to disregard Red Hats feedback. I hope they just ensure Red Hat gets resources they need and step back. Pretty sure Microsoft is doing that with GitHub to a reasonable extent. Seems to me now that GitHub has more resources they can do much more than they could prior.

Squandering $multibillion investments into industry crown jewels is par for the course. As you point out Microsoft may have learned to not screw up GitHub, but the price of tuition was pretty high: $7-$10 billion for buying and destroying Nokia.

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

#66

Post by TallGuyShort »

airstrike wrote: post #60
TallGuyShort wrote: post #58

Earlier quoted context omitted.

I remember a very similar email from my company's CEO during a merger. Within months he had retired with millions and everything had changed. I sincerely wish Red Hat and your work doesn't fall victim to a similar fate, but IBM literally owns you as of today.

That sort of depends on whether the CEO will remain in the company or not, and which incentives he has to continue to perform

The CEO doesn't have full control over everything. Plenty can (and did) change even without a change in the CEO. Again - they are literally owned by IBM now. I'd be optimistic if Red Hat really were to be fully independent with respect to products. But unless IBM made this investment purely as a financial strategy, they will absolutely begin interfering.

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

#68

Post by bloopernova »

bmicklea wrote: post #34
DevX101 wrote: post #31

Earlier quoted context omitted.

You don't spend $34B to not interfere.

I respectfully disagree - I'm a Red Hatter so you can take that for what it's worth. To me the 34B buys IBM the real estate in the open hybrid cloud market which Red Hat has built up in the last 5 years. That is part of a large and rapidly growing market. If IBM interferes with Red Hat they will likely squander the value of what we've built. If they foster what Red Hat did to win that critical ground then their 34B c…

I certainly don't want to argue or appear confrontational, but wanted to ask you this:

Have there ever been any situations where the acquisition of a smaller company by a larger one has resulted in the smaller company remaining independent? Or has there been any positives for companies like Red Hat when they get bought?

Usually I hear or read the positive-yet-bland press release talking about how wonderful this is, and how big-corp won't destroy little-corp's culture. Yet a year or less afterwards, I read stories of how everyone in little-corp has been laid off, and now little-corps applications/services are now crap.

I'm a huge Fedora/CentOS/RHEL fan, and use it every opportunity I get. I'm very, very worried that Red Hat will be gutted and defiled until there's nothing left. Which is a very, very bad thing for open source because Red Hat is a huge cornerstone of OSS development and support.

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

#69

Post by chr15p »

awill wrote: post #44
bmicklea wrote: post #34

Earlier quoted context omitted.

I respectfully disagree - I'm a Red Hatter so you can take that for what it's worth. To me the 34B buys IBM the real estate in the open hybrid cloud market which Red Hat has built up in the last 5 years. That is part of a large and rapidly growing market. If IBM interferes with Red Hat they will likely squander the value of what we've built. If they foster what Red Hat did to win that critical ground then their 34B c…

Respectfully, I think you are being overly optimistic. I worked at a company acquired by HP several years ago. They bought us because we were beating them, and yet, they still thought they knew better, and intefered. You can guess how things ended up. I am certain IBM will think they know better than Red Hat, and will intefere. It is in their culture. The HPs and IBMs of the world no longer innovate. They acquire inn…

34billion is a lot of money to mess around with so hopefully they will at least thing twice before trying anything too dramatic, plus Jim Whitehurst (Red Hat CEO) is going to be reporting directly in to Ginni Rometty (IBM CEO) which should help provide some aircover. In the end it will probably depend on a) Red Hat continuing to grow and make money, because why would you kill a golden goose, and b) how good Jim Whitehurst is at the inevitable corporate politics

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

#70

Post by dalbasal »

Frost1x wrote: post #55
dalbasal wrote: post #15

Earlier quoted context omitted.

I have no specific bad feelings about IBM, but I don't like the constant drive towards consolidation. It makes us worse off, I feel. Nearly all these big mergers are about cornering markets, reducing competition and avoiding innovations. At best they're about finance shenanigans. It's not as if redhat customers are likely to be excited about this.

I agree. I think there's enough evidence at this point in time to show that corporate consolidation after a point is no longer beneficial to our society. After a certain point, it's pretty clear to me that consolidation only benefits a few significantly invested shareholders and no one else. I suspect this is somewhere greater than the "big 4-5" we've become accustomed to accepting in every sector, when economies of…

Antitrust can't be left in the hands of courts. For one thing, the practices legally defined as "trust" behaviour are, to an extent, specific to time, place and time and industry. Laws made for railroad and raw material trusts are not really applicable to operating systems or social media.

A second reason is that practices evolve around legal limitations. Monopolies can stay on one side of the legal letter, and that evolves over time.

To actually deal with trusts requires legislation specifically tailored to the monopolistic tendencies of (for example) the 2019 tech sector. Maybe "data share" needs to be a concept like market share is/was.

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