Following my earlier analysis of IBM’s planned acquisition of RedHat I had a chance to listen in to a conference call today in which Arvind Krishna (IBM Senior Vice President, Hybrid Cloud and Director, IBM Research) and Paul Cormier (Red Hat President, Products and Technologies) described their views and answered questions from analysts on the announcement. Several times they noted that the deal is not yet complete and is dependent on verification of regional administrators. I note that we now live in a less predictable world in which proposed deals can be quashed, as Broadcom’s proposed acquisition of Qualcomm was earlier this year.
These are the synergies described by the two:
- ‘IBM Cloud is a Red Hat Certified Cloud Provider and part of the Red Hat Cloud Access Program – Organizations with eligible Red Hat subscriptions can use their RHEL, OpenShift, and JBoss subscriptions on IBM Cloud via the Red Hat Cloud Access program
- Red Hat Enterprise Linux is offered across the IBM Systems portfolio, including IBM z, LinuxONE, and Power Systems. OpenShift was recently announced as supported on IBM Power Systems
- IBM Services manages the largest number of Red Hat deployments
- IBM and Red Hat announced in May 2018 a partnership agreement which extended IBM’s private cloud platforms (IBM Cloud Private, IBM Cloud Private for Data) and IBM’s middleware to Red Hat OpenShift Container Platform and as Red Hat Certified Containers’
IBM plans to keep the RedHat brand and business somewhat separate from IBMs, marinating the independence and neutrality of RedHat’s ‘go to market’ approach. Arvind noted ‘There’s influence, but not control, coming from IBM. We’ll work together to reach the right conclusions’.
One much discussed issue was the difference between RedHat’s OpenShift platform and IBM’s support for CloudFoundry (not a platform in its own right in the same way, but nevertheless a different set of technologies to build one from). The two spokespeople were happy to predict a world in which both approaches will be supported as they are today, while IBM also noted that it works with customers who use SuSe Linux (now owned by Micro Focus) – it doesn’t plan to stop supporting them just because it has bought RedHat with its own RHEL operating system.
We also talked about the support both companies have for containers and Kubernetes, which both see as crucial technologies for future cloud-based applications.
On the analogy with VMware and Dell Technologies Avind noted that there will be a difference in status – VMware is a publicly quoted company in which Dell has the majority holding; once the acquisition is completed RedHat will be owned 100% by IBM. I believe therefore that it will thereby be IBM’s choice rather than a legal requirement to keep its acquiree’s status as mainly independent. However, it’s still early days and neither company can outline any change in operation or strategy until the deal is complete.
The two companies believe we’re only at the foothills of cloud adoption, indicating that only 20% of enterprise applications have so far been converted into cloud – with 80% still run as ‘traditional’ – applications. For me IBM is as usual taking bigger bets and making more changes than its traditional competitors to meet the needs of the developing ‘multi-cloud’ world.