IBM missed a great marketing opportunity. They should have told the public that the decision to acquire Red Hat was made by Watson
How is that marketing? That's just fraud.
IBM Stops Buybacks to Pay for Red Hat
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Re: IBM Stops Buybacks to Pay for Red Hat
#92Re: IBM Stops Buybacks to Pay for Red Hat
#93Earlier quoted context omitted.
Becuase of kubernetes. The platform of platforms. Kubernetes is the andriod to amazon iphone (in analogy). It is the only way to get out of cloud vendor lock in. IBM is mainly a consultancy business, so they basically back integrated with the cloud os - kubernetes, or more specifically in this case - open shift. The only issue here is that are around 23 or more certified kubernetes distors, so this might have been an…
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…
The scale-up vs. scale-out argument is very old. I don't see Kubernetes providing a new answer either way. But it does not have to.
Let's stipulate that most analytic applications can run on single servers. You still need a way to schedule work efficiently when the applications in aggregate require more than a single host. Kubernetes does that very well.
That's leaving out considerations like HA. The paper is notably silent on this topic. To keep systems up across failures as well as maintenance you need replicas in different locations. There's an implication in the paper that everyone is just going to run off S3, which is assumed to be globally available. Not everyone makes that choice for a variety of reasons. So we will continue to see shared nothing designs that require placement across hosts, racks, AZs, etc. Kubernetes is efficient at deploying these.
Re: IBM Stops Buybacks to Pay for Red Hat
#94Earlier quoted context omitted.
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.
But, don’t you see the paradox there? If customers are happy with their mainframe why would they switch to Red Hat? And if they don’t want to switch why did IBM buy it?
Re: IBM Stops Buybacks to Pay for Red Hat
#95What 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…
The overnight rate does not effect real long term rates, they are fucking inverted. Real rates are set by return on capital (plus inflation for nominal rates) in the long end. Pensions and retirement funds are only affected by the overnight rates in so much they use hold short term reserves as cash equivalents. > Stock prices inflated in such a way are not supported by fundamentals Inflation - what your describing, m…
> The overnight rate does not effect real long term rates, they are fucking inverted.
The federal funds rate greatly affects credit rates, that's why it's a primary instrument in financial policy.
> Pensions and retirement funds are only affected by the overnight rates in so much they use hold short term reserves as cash equivalents.
That's the direct effect, but because all other credit rates are affected, so are corporate bonds, which are a major component of pension fund allocations.
> All the forward looking indexes of inflation are down: commodity crb index, metals index (including gold), tips spreads - all down in the last six months.
> No, then there would be an arbitrage opportunity (if you so easily see it obviously the smart, deep pocketed money would see it too).
Why? Who says that prices aren't going to stay "permanently inflated"? I'm talking about downside risk, not a guaranteed and easily timed market selloff.
> All the forward looking indexes of inflation are down: commodity crb index, metals index (including gold), tips spreads - all down in the last six months.
Sure, if you look at commodities, there is no inflation. If you look at the CPI, there is no inflation. It depends on where you look. Gold is way up though, regardless of what the index says.
Re: IBM Stops Buybacks to Pay for Red Hat
#96What 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 etc has exploded while supply has decreased. The number of listed stocks in US markets has dropped dramatically. This is genuine change in supply and demand.
Re: IBM Stops Buybacks to Pay for Red Hat
#97Earlier quoted context omitted.
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 wel…
I agree, My point here is that I see the acquisition as a result of the market shift that is happening due to the introduction of Kubernetes. And in this case, it was the result of openshift. Note that once you use containers, you decouple your infra tools from the app dev tool.
Yes but that only changes how you, an app developer, perceive your underlying infrastructure not the tools by which that infrastructure is provisioned and maintained.
You can kick the can really far down the road but whether is your ops team, your VPS provider, or a massive cloud someone has to pick it up and they will likely do so using tools developed by Red Hat.
Re: IBM Stops Buybacks to Pay for Red Hat
#98PSA: If you want exposure in your portfolio to the M&A market there's an ETF that does it:
It's perhaps the single biggest "alternative" strategy ETF.
Re: IBM Stops Buybacks to Pay for Red Hat
#99What 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…
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 said company. The company 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. Saving up more cash to buy the final stock just raises the price because the stock is entitled to that cash and nobody is going to loan a company enough cash to be worth the expected future profits of said company which makes up the remainder of the shares value.
Funnily enough though, I think they would still do share buybacks by first splitting the stock and then buying a subset of the split stock because then the sole owner would only have to pay taxes on the sale price minus the price he paid for the stock whereas dividends are taxed in their entirety.
Re: IBM Stops Buybacks to Pay for Red Hat
#100Earlier quoted context omitted.
Wtf. Ok thanks for posting. I will never use any RedHat product ever again.
The alternative is paying for the software you're using. If you don't want to pay for for-pay software, there's plenty of no-cost Linux distros available.
The problem with these audits is that the exact licensing conditions can be vague, or the audit points to something that is in compliance, but might not be (e.g. you're licensed for 8 cores, but your replacement servers have 12 cores, you still only need the 8 cores so you disable 4 cores in the bios ... well, they will say, for all we know you only disabled those cores when we came to do the audit ... so now you owe us the money for 4 extra cores at full list price, going back 18 months).