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IBM Stops Buybacks to Pay for Red Hat

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Re: IBM Stops Buybacks to Pay for Red Hat

#71

Earlier quoted context omitted.

Forgive my ignorance,but what is an IBM auditor?

https://ibmaudits.com/ibm_faq/ Read and despair. tl;dr: They dig around to see you’re paying the correct license fees. They’re common and expensive enough that law firms offer special counseling explicitly for that.

Wtf.

Ok thanks for posting. I will never use any RedHat product ever again.

Re: IBM Stops Buybacks to Pay for Red Hat

#72

Earlier quoted context omitted.

Red Hat does a lot more than just RHEL. They've got a Kubernetes distribution (OpenShift) and a ton of useful software under their umbrella. (Ceph, GlusterFS, FreeIPA, Ansible... etc)

So all of those are quite exotic, and thus risky / expensive to support.

None of those are exotic if you're running on-prem/colo'd workloads. They might be exotic to app develoers but for anyone in operations they're your staple tools.

They're the tools used by the people backing your Kube cluster :P

IPA/IdM is the gold standard for user management on a fleet of servers.

Gluster is the best replicated filesystem hands down and Ceph is the only alternative to expensive SANs that scales well.

Ansible is by far the most popular config management tool.

Foreman+Candlepin/Satellite is one of the few sane ways to do patch management.

There are a lot more things RH has under their belt that I could talk about but I just did the list that was mentioned.

Re: IBM Stops Buybacks to Pay for Red Hat

#73
post #25

Earlier quoted context omitted.

The general strategy seems to be: IBM's customers have been slowly transitioning from proprietary IBM OSs (AIX, z/OS) to Linux for a lot of their workloads, and IBM has accommodated this out of necessity, but wants to retain licensing revenue and some degree of branding/control in that situation by having such customers on an Enterprise IBM Linux. RHEL more or less already owned the Enterprise Linux space, so IBM jus…

Other way round, IBM are hoping that a lot of their customers who aren't already big Red Hat customers can be converted to using RHEL and (especially) Openshift. They already have all the sales and delivery relationships in place that they need to do really big (like 100 million to billion dollar big) deals, much bigger then anything Red Hat has been able to sell on their own. They also have relationships to sell RHE…

And that's also a good defensive move.

Given the market is moving, even IBM's major customers would eventually migrate to newer technologies. (On the order of decades)

By providing something that mostly satisfies that need, IBM essentially drilled a relief well to take the pressure off. When they're ready to migrate, they could get 80% value of what a non-IBM migration would get them by moving to IBM's product.

For a lot of large, slow, conservative orgs, that's good enough.

Re: IBM Stops Buybacks to Pay for Red Hat

#75

Earlier quoted context omitted.

The general strategy seems to be: IBM's customers have been slowly transitioning from proprietary IBM OSs (AIX, z/OS) to Linux for a lot of their workloads, and IBM has accommodated this out of necessity, but wants to retain licensing revenue and some degree of branding/control in that situation by having such customers on an Enterprise IBM Linux. RHEL more or less already owned the Enterprise Linux space, so IBM jus…

IBM's customers have been slowly transitioning from proprietary IBM OSs (AIX, z/OS) to Linux for a lot of their workloads Yes, but that’s only a coincidence. What they have really been doing is transitioning from proprietary to commodity hardware. Which IBM no longer makes. Where does IBM make money? Mainframe sales. There can be only one winner here... IBM will need to kill off their mainframe business to justify th…

There is no reason to discontinue their mainframe business. Banks and other institutions have applications running successfully on those platforms. The industry has learned that it is better to integrate applications than to replace—especially when the replacement is a 40 year old app that runs the business.

IBM’s mainframe margins are safe for decades to come.

Re: IBM Stops Buybacks to Pay for Red Hat

#76

A dying company trying to extend their “squeeze your base” policy to another vendor. I think they overpaid for RedHat. After a particularly painful audit at my Fortune 500, we kicked out RedHat. We spend more time talking to IBMs auditors than we do to their Salespeople and engineers. This merger seems like the modern version of HP and Compaq. The only winners are the shareholders who bolt early. Customers, employees…

Forgive my ignorance,but what is an IBM auditor?

IBM products have no license-checking built in, on purpose. They want you to make more copies than your negotiated license agreement allows. Then, when the auditor comes in, they charge you the sky-high list price, backdating it as well.

Re: IBM Stops Buybacks to Pay for Red Hat

#77
I miss the old IBM Thinkpads; sure, they cost $4,000 during the height of the dot-com boom, but those things were built like tanks. I got a 600X when a dot-com was liquidating its assets for $700 and it was my primary computer for over six years.

The newer Thinkpads from Lenovo are more like wannabe Macbooks; I miss batteries you could swap out without opening the computer and Thinkpads you could open without using a spudger.

Re: IBM Stops Buybacks to Pay for Red Hat

#78

I miss the old IBM Thinkpads; sure, they cost $4,000 during the height of the dot-com boom, but those things were built like tanks. I got a 600X when a dot-com was liquidating its assets for $700 and it was my primary computer for over six years. The newer Thinkpads from Lenovo are more like wannabe Macbooks; I miss batteries you could swap out without opening the computer and Thinkpads you could open without using a…

lol what does that have to do with anything?

Re: IBM Stops Buybacks to Pay for Red Hat

#79

Earlier quoted context omitted.

Kubernetes has nothing to do with cloud vendor lockin. I don't know where you're getting this from. Any hosting provider can spin you up some managed Linux nodes on a bunch of distros and they can be admined by the same tools and same people. That's why all the big clouds spend so much effort creating new services with custom APIs that aren't just "run a process in a chroot jail with fiddly bits". Big Data, AI and so…

I getting it from Jo Beda, the CTO of heptio (now VMWARE). More specifically , from his definition of cloud native. A cloud native system is a system that manage its resources via an API. The vendor locking in this case is the cloud API. I.e. if I want a resource (e.g. a VM) , I need to use the EC2 api. With kubernetes, I write to the kuberentes API which is open source, cloud vendor natural. However, and this the ke…

> In the future (some would say near future), all of the cloud services will be offered as kubernetes APIs (via a set of domain specific CRD)

If (big if) some standardized variant of kubernetes "wins."

K8s was transparently Google's strategic shot at forcibly commodifying AWS.

But everyone has their own agenda. Google, Microsoft, and (to a lesser extent) Amazon could survive in a world of fully commodified compute. Give their compute assets are essentially surpluses from running their other businesses (advertising, software sales, and online retail).

So none of them have a strategic imperative to derail k8 evolution.

But managed, specialized cloud services are lucrative to all of them (especially Amazon). So their best-case isn't a fully commodified future.

Re: IBM Stops Buybacks to Pay for Red Hat

#80
post #4

Can someone explain why Red Hat is so valuable? Why would IBM put such a big bet?

Wall Street expects infinite growth from all companies, otherwise the CEO's will be fired. You can grow if you can grow your user base, your usage per user, prices or any combination of this OR you can grow if you expand your portfolio of things you sell. To expand the portfolio the easiest way for a mammoth turtle like IBM (and many others) is to purchase companies that have products. It has nothing to do with IBM or Red Hat, it is all driven by Wall Street expectations.
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