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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

#111

Post by ineedasername »

streetcat1 wrote: post #48
beagle3 wrote: post #32

Earlier quoted context omitted.

The same mindset would dictate that you only ever buy no-name hardware which is about 30% cheaper than dell/hp for the same performance characteristics... why would anyone do that? And that's why people DO pay for red-hat. Peace of mind, whether supported by evidence or not.

So people pay for redhat because they did not move to container/ microservices architecture. Any main stream technology (Mainframe, Dec/Vax, PC, VM) will always have legacy customers. However, one the state of the art architecture is micro services, the optimal runtime is kuberentes. Once everyone is on kubernetes hardware will not matter. Moreover, I would love a cloud based on second hand hardware (which should be…

There's still a very large enterprise market for monolithic software that isn't going anywhere anytime soon. These are not legacy customers.

Re: IBM Stops Buybacks to Pay for Red Hat

#112

Post by broknbottle »

acdha wrote: post #31
broknbottle wrote: post #17

IBM missed a great marketing opportunity. They should have told the public that the decision to acquire Red Hat was made by Watson

Lying like that is a great way to have to deal with lawsuits from every investor who isn’t convinced that the deal is a good idea.

It's not a lie if you believe it ;)

Re: IBM Stops Buybacks to Pay for Red Hat

#113

Post by gridlockd »

nabla9 wrote: post #96
gridlockd wrote: post #5

What laypeople need to realize is the following relation: Low federal funds rates allow companies to acquire huge amounts of debt very cheaply. Huge amounts of cheap debt allow companies to buy lots of stock, driving up prices. Stock prices inflated in such a way are not supported by fundamentals and so the downside risk greatly increases. Once the downside eventually materializes, markets drop violently. At first, t…

That's very unicausal explanation that puts all blame for Fed. The truth is that there are trends increase stock prices independent of Fed. The secular decline in real interest rates over almost 40 years is global phenomenon. Increasing demand for safe and liquid assets and decline in world economic growth might be factors. In the US the amount of money in mutual funds, hedge funds, ETFs, insurance companies, 401Ks e…

> That's very unicausal explanation that puts all blame for Fed.

That's a fair point and that wasn't my intention, but you can only fit so much context into a comment. I'm not even saying they're "doing it wrong", but that they are in a pickle. Of course interest rates are low globally and it's not just domestic capital bidding up prices.

> In the US the amount of money in mutual funds, hedge funds, ETFs, insurance companies, 401Ks etc has exploded while supply has decreased.

Well alright, but why has it exploded? Why do all these allocations into riskier asset classes take place? Is it all just greed, or is it the interest rate environment?

Re: IBM Stops Buybacks to Pay for Red Hat

#114

Post by ineedasername »

pm90 wrote: post #19
streetcat1 wrote: post #14

Earlier quoted context omitted.

There is nothing to drag. A single server distro is becoming irrelevant as the unit of computation resources is the kubernetes cluster. I.e. all the app see is a set of kubernetes nodes, it does not really care what server disto you are running on.

Red Hat is more than its products. The engineering talent at the company is astounding. I remain skeptical that they will remain for long though.

I don't know how it is in the IBM-level sphere for an acquisition like this, but in the financial world there's often a 12 month retention bonus. I'd look for staff hemorrhage in a year.

Re: IBM Stops Buybacks to Pay for Red Hat

#115

Post by manigandham »

Aloha wrote: post #47
mathattack wrote: post #37

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…

I disagree that IBM is dying, not aggressively growing, but not dying.

Based on what?

Re: IBM Stops Buybacks to Pay for Red Hat

#116

Post by z3t4 »

streetcat1 wrote: post #22
orev wrote: post #18

Earlier quoted context omitted.

You do realize that those containers eventually need to be hosted somewhere , right? That somewhere is a server running an operating system. Containers are more a threat to virtual machine OSes than ones that host containers.

Right. All I need from a node is the CPU / Memory and a docker daemon. The less I know about an OS or any other services / patches, etc the better. I.e. I want my nodes to be cattles.

What you don't know can't hurt you :P Abstraction layers are good when it feels that way though.

Re: IBM Stops Buybacks to Pay for Red Hat

#117

Post by ianlevesque »

garmaine wrote: post #71
sharpneli wrote: post #46

Earlier quoted context omitted.

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.

CentOS

Re: IBM Stops Buybacks to Pay for Red Hat

#118

Post by chr15p »

ethbro wrote: post #73
chr15p wrote: post #25

Earlier quoted context omitted.

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…

kinda, I mean, IBM consulting have been happy to move customers off legacy IBM/AIX/DB2 onto Dell kit running Oracle on windows for decades now if thats what the customer wanted and was prepared to pay, precisely because its better to take the services revenue and the reseller margin then lose everything. So that relief well was drilled years ago, and certainly the name IBM helped with persuading those slow conservative orgs to use their services, but this predates the Red Hat acquisition by a looong time. IBM have been a major reseller of RHEL for those migrations for years, this just means they take the software as well as the services revenue, and (they hope) can sell RH software into more of those conservative accounts by bundling it under the IBM family.

Re: IBM Stops Buybacks to Pay for Red Hat

#119

Post by criddell »

mrep wrote: post #99
criddell wrote: post #20

Earlier quoted context omitted.

Are there buyback limits? Is it possible that company could buy all of it's stock?

Nope, remember, share buybacks are just a more tax efficient form of returning profits to investors than dividends. As they buy more and more of their stock, the remaining shareholders end up owning a larger and larger percentage share of the company. Taken to the extreme, there would finally be 1 share left held by someone and thus that person would own 100% of the company and be entitled to 100% of the profits from…

> The company cannot cannot just buy the last stock because the stock itself is worth all the cash the company holds and the future profits it will make.

The last share is worth whatever the person that holds it is willing to sell it for, right? A share of IBM is worth $136 right now because there are two parties willing to buy/sell a share of IBM at that price.

I realize this would never happen in a million years, but could a company exist that is owned by nobody?

Re: IBM Stops Buybacks to Pay for Red Hat

#120

Post by edoceo »

Nursie wrote: post #107
josh_fyi wrote: post #76

Earlier quoted context omitted.

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.

That's a little over-cynical, IMHO. They don't have licensing in the products because it's an overhead, it complicates development, and their enterprise customers are supposed to be trustworthy and in communication with IBM about ongoing requirements. But yes, they have auditors to enforce this stuff.

Too expensive "overhead" for IBM to develop? So rather, they employ 1000s of humans for the work? The math don't check out for me
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