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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

#81
post #72

Earlier quoted context omitted.

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.

>they will just create Microsoft Linux This sounds like something right out of a dystopian nightmare I might have had in the early 2000s.

http://mslinux.org/

Quite literally!

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

#82

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…

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, a…

IBM had a huge push about 20 years ago to spend their resources on Linux, I believe this played a part in Linux beating everything from SCO, Solaris and even AIX and BSD out of the market.

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

#83

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…

They’re IBM, of course they will squander it. How do you think they went from king of the hill to grumbling behemoth that is constantly behind the times? As someone who has worked at a company like that before I can foresee continual IBM management changes until you get the right combination of buiness minded leadership that will can everything at Redhat that isn’t directly related to developing what they consider ob…

[deleted]

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

#84
So IBM buys Red Hat for $34B, of which $20B are borrowed monies. The debt is priced at 1.05 percentage points above Treasury yield rate [1] which would be somewhere around 3.5% which puts interest on bond debt at ~$700m every year.

Now consider that Red Hat had a net income of $433m. Even if they reach $500 this year, Big Blue will still be $200m short, every year.

At the moment, IBM is trading down at -0.5% on an otherwise slight green Nasdaq.

Just from these numbers we can conclude that IBM is seeing some pretty significant synergies in the purchase that the market isn't.

[1] https://www.barrons.com/articles/ibm-bond-sale-red-hat-51557...

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

#85

Earlier quoted context omitted.

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, a…

I usually put it this way: "Name one company that was better after a merger." I've yet to find any affirmative answer. It's good to have hope, but it's not good to be unrealistic.

Youtube/Google?

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

#86

This is a great move for both companies. The doom and gloom in this thread is depressing. RedHat gets access to IBMs massive sales machine and IBM picks up a number of key technologies. Win-win.

The problem with any M&A is no different than what happens in marriages - do the two blend together, does one dominate the other's culture, etc? The truth is that IBM's history (and to be fair, almost all 10-figure+ market cap tech companies) even with multi-billion dollar acquisitions (that's almost all they do with the exception of Google and Apple I can think off the top of my head) is that the current company's inertia dominates whoever they acquire and the internal sales-driven culture in developed markets supersedes anything resembling engineering related from a company they acquire. Sometimes IBM gets ripped off too but wishful-thinking top-down thinking instead of a more critical, measured engineering oriented focus is typically not consulted even for absolutely essential company initiatives internally.

Disclaimer: former IBM employee with short tenure with a failed acquisition by every definition of it

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

#87

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…

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, a…

The agency I work at was bought up by the monolithic AKQA, which in turn was bought by the epic proportioned WPP.

At first, that meant our one to four person operation in SF (most are in London) moved from hanging around Google offices to getting a terrible fishbowl in AKQA. Then, right when I joined, they got approved for their own space in the financial district of SF. Since then, they've been expanding rapidly, with basically no input or oversight from AKQA or WPP.

So at least in this case it seems there was no issue.

The company is Potato, by the way.

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

#88
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…

Every company in the world is told they can keep their corporate culture after an acquisition. This never actually happens, or at least I've never seen it. Optimism that they shouldn't screw up Red Hat is just not how large corporatiols operate.

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

#89

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.

Red Hat's business model and open culture isn't changing. We will remain independent and I look at this as an opportunity for more people to engage with our stellar support and field teams. For some context you can read the email our CEO sent out to the whole company today: https://www.redhat.com/en/blog/jim-whitehurst-email-red-hatt...

Wish you luck, but strongly suggest you remain realistic about how this dance goes, simply for your own sake.

Thing is, IBM has been around for a long time and has a long history of acquisitions. They've done it enough that there's a process. My suggestion would be to go through this list and decide which one looks most like the situation in which you find yourself.

https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...

If you were feeling like a little research, you could probably even find the names of some folks in a job role like yours who were there at the time and see what happened to them post-acquisition.

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

#90
post #77
post #54

Earlier quoted context omitted.

That I feel is just hyperbole, too many people tend to think this deal is some kid of death warrant to Red Hat, but in reality it is only going to strengthen it by adding more and providing support, both financial and managerial to any dearth of resources that may come around ope source companies, that is if IBM can keep their hands out of the technology and management of Red Hat. I think and hope they will be wise a…

>I think and hope they will be wise about handling things and learn from companies like Oracle who are now infamous for obliterating good technology. That's the problem with your thinking and people like you in this thread: you're entirely banking on faith that IBM won't ruin RH, even when you cite a great example here about Oracle making similar acquisitions and running them into the ground. Seriously, what makes yo…

Just their word, and I also said I hoped they kept their word.

I'm just trying to be optimistic in this case, although I agree with how acquisitions always run into the ground regardless of the company, but something tells me IBM would think twice about doing something remotely like that to RH. For one thing, they contribute excellent work into the kernel and some of their senior engineers have had pivotal roles in adding components to the kernel which may have been a significant factor in improving it, and a minor testament that they care about the system as a whole. That doesn't guarantee anything but it is quite evident from their perspective that they are just looking to both increase their foothold in the industry and improve the base system.

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