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IBM is all in on the multi cloud story since they missed the cloud memo, and RH openshift is their key to allowing customers to lift and shift from AWS to Azure

IBM is all in on the multi cloud story since they missed the cloud memo, and RH openshift is their key to allowing customers to lift and shift from AWS to Azure to GCP etc. Plus it's pretty clear they know how to do layoffs and that knowledge may be applied to RH soon to boost profitability.

Zenst 7y ago
So more an IP acquisition and IBM sure does know from decades of experience to recognise some company that fills a gap that has usurped their own offerings and acquired it. You may well be right, indeed that was along the lines of my initial thought about this and would explain the size and scale of investment. Then if RH fails as they would currently to keep up those interest payments, then accountants can just rub their hands and use that debt to offset profits down the line. Time will tell, certainly IBM has the kit and for years had its own dark fiber internet backbone globally, so have been well placed for years to capture the cloud market, yet failed to move on. Which for a company that saw a shift towards service offerings, was probably a big source of embarrassment internally at some levels.
- babarock 7y ago
  "IP acquisition"? Honest, if all the code that RH writes is open source, how can this be an IP acquisition?
  - SkyMarshal 7y ago
    Maybe it's more of an infrastructure + customer acquisition then. Or maybe it's about eliminating one of the few cloud competitors that IBM is capable of eliminating (not AWS, Azure, GCP).
  - sverige 7y ago
    Well, there's probably some intimate knowledge of RH's customer base, their needs, their goals, etc., plus whatever processes RH uses to service them. It's not tech, but not all intellectual property is tech.
    - adrianratnapala 7y ago
      I think is what people might call "knowledge capital", "intellectual capital" or some such vague term. In my experience IP corresponds specifically to legally recognised property in otherwise copyable information.
- onlyrealcuzzo 7y ago
  Almost 80% of IBM's profits come from its cloud division, which is only 27% of it's business. It seems like the idea behind the Red Hat acquisition would be to increase the cloud division revenue and keep roughly the same profit margin, which in theory could be great for their bottom line, especially if Red Hat is growing quickly (is it?). The arm chair CEO in me doesn't see how this adds up, though. Red Hat seems pretty pricey. I just don't see how Red Hat competes with AWS, Azure, and GCP moving forward, and I don't really see how it plays nicely / fits into those clouds either. I also don't see how it would make IBM's cloud more attractive. I can see how it could make IBM's cloud more profitable, but it seems like a stretch, given what they paid for Red Hat.
  - streetcat1 7y ago
    So kubernetes turn the clouds into a commodity. And this is Red hat play. The issue here is that google (kubernetes creator) is afraid to compete with itself (aka GCP), and hence needs another player to complete the picture.
    - ethbro 7y ago
      Based on market share, Google has undoubtedly run the numbers and realized that increasing cloud portability hurts Amazon and Microsoft more than it hurts Google. From that perspective, community adoption of k8 benefits Google.
      - streetcat1 7y ago
        This is correct, however, kubernetes is a platform of platforms. I.e. it will hurt all of them at the end. Kubernetes is realy a free, uncontrollable , widely installed (on prem and cloud) infrastructure, that compete directly with the clouds. Think of the iphone app store, without any apps (yet), and not controlled by apple. The reason that companies pays for cloud services (which are 20x the real cost of hardware) is to off load the human cost in managing their infrastructure, and to get hold of cloud native infrastructure (I.e. infra as code, fully scalable). However, with kubernetes you can create your own automatic robots (aka operator) which would replace the costly admins by taking care of application management. And at the same time you architect to a portable API layer.
gscott 7y ago
Anyone with a neck beard better shave it, anyone with grey hairs better get a dye-job, Botox for anyone with wrinkles otherwise IBM will have them out by there ear quick.

Zenst 7y ago

So more an IP acquisition and IBM sure does know from decades of experience to recognise some company that fills a gap that has usurped their own offerings and acquired it. You may well be right, indeed that was along the lines of my initial thought about this and would explain the size and scale of investment. Then if RH fails as they would currently to keep up those interest payments, then accountants can just rub their hands and use that debt to offset profits down the line. Time will tell, certainly IBM has the kit and for years had its own dark fiber internet backbone globally, so have been well placed for years to capture the cloud market, yet failed to move on. Which for a company that saw a shift towards service offerings, was probably a big source of embarrassment internally at some levels.

babarock 7y ago
"IP acquisition"? Honest, if all the code that RH writes is open source, how can this be an IP acquisition?
- SkyMarshal 7y ago
  Maybe it's more of an infrastructure + customer acquisition then. Or maybe it's about eliminating one of the few cloud competitors that IBM is capable of eliminating (not AWS, Azure, GCP).
- sverige 7y ago
  Well, there's probably some intimate knowledge of RH's customer base, their needs, their goals, etc., plus whatever processes RH uses to service them. It's not tech, but not all intellectual property is tech.
  - adrianratnapala 7y ago
    I think is what people might call "knowledge capital", "intellectual capital" or some such vague term. In my experience IP corresponds specifically to legally recognised property in otherwise copyable information.
onlyrealcuzzo 7y ago
Almost 80% of IBM's profits come from its cloud division, which is only 27% of it's business. It seems like the idea behind the Red Hat acquisition would be to increase the cloud division revenue and keep roughly the same profit margin, which in theory could be great for their bottom line, especially if Red Hat is growing quickly (is it?). The arm chair CEO in me doesn't see how this adds up, though. Red Hat seems pretty pricey. I just don't see how Red Hat competes with AWS, Azure, and GCP moving forward, and I don't really see how it plays nicely / fits into those clouds either. I also don't see how it would make IBM's cloud more attractive. I can see how it could make IBM's cloud more profitable, but it seems like a stretch, given what they paid for Red Hat.
- streetcat1 7y ago
  So kubernetes turn the clouds into a commodity. And this is Red hat play. The issue here is that google (kubernetes creator) is afraid to compete with itself (aka GCP), and hence needs another player to complete the picture.
  - ethbro 7y ago
    Based on market share, Google has undoubtedly run the numbers and realized that increasing cloud portability hurts Amazon and Microsoft more than it hurts Google. From that perspective, community adoption of k8 benefits Google.
    - streetcat1 7y ago
      This is correct, however, kubernetes is a platform of platforms. I.e. it will hurt all of them at the end. Kubernetes is realy a free, uncontrollable , widely installed (on prem and cloud) infrastructure, that compete directly with the clouds. Think of the iphone app store, without any apps (yet), and not controlled by apple. The reason that companies pays for cloud services (which are 20x the real cost of hardware) is to off load the human cost in managing their infrastructure, and to get hold of cloud native infrastructure (I.e. infra as code, fully scalable). However, with kubernetes you can create your own automatic robots (aka operator) which would replace the costly admins by taking care of application management. And at the same time you architect to a portable API layer.

gscott 7y ago

Anyone with a neck beard better shave it, anyone with grey hairs better get a dye-job, Botox for anyone with wrinkles otherwise IBM will have them out by there ear quick.