16 ms·

A Cold Take on IBM, Red Hat and Their Hybrid Cloud

174 points by pinewurst 7y ago

mathattack 7y ago
Most large companies don’t trust IBM anymore. RedHat has joined them in turning license audits into a profit center. Defending unfounded audits is a large cost of business with both vendors. Hard to imagine many folks trusting them on journeys with new technology.
- anonoholic 7y ago
  > RedHat has joined them in turning license audits into a profit center. If a company is using licenses it hasn't paid for, and so isn't entitled to, why is the vendor the bad guy for catching them out? Maybe I'm the odd one out here as an individual in paying for the movies I watch, and the music I listen to; but I would expect a business to pay for the software it's using, irrespective of your stance on "big media".
  - privateSFacct 7y ago
    Oracle made a business of squeezing lots of unreasonable corners here, so folks have soured a bit on what would be an otherwise reasonable process. Best would be some kind of random third party CPA firm or something do a balanced audit against standards without the screw you upsell to avoid total destruction on the license fee side.
  - __jal 7y ago
    There is a huge gulf between wanting your customers to pay what they owe you and this sort of "audit". I make a serious point of doing what I can to steer my employers away from any outfit that believes adversarial relations with their own customers are ideal. Screw that; I want to compete with my real competitors, not waste money on lawyers fighting my own supply chain. So yeah, I want to see if they go full-Larry Ellison here, but I likely longer recommend anything Redhat and will look at moving away from the things we do use. Sad, really.
    - hermitdev 7y ago
      I turned down a job offer with such an adversarial company this year, only interviewed so my recruiter would keep sending interviews. I knew the company by reputation: that they had a habbit of suing customers for patent violations. The commute would have been easier. Bit longer (train) than the job I took (driving 15 miles opposite traffic). The job I took pays $20k less a year, but is worth it when factoring in less unpaid overtime, shorter commute amd reduced stress. My wife wanted me to take the higher paying job, but after explaining that, per hour, I'd be making less and only home for 1 waking hour during the week, she agreed. Also have better health insurance at the lower paying job.
  - PhilWright 7y ago
    Being caught out using software you did not correctly license is not the problem. That would be fair enough. It is the burden of proof and the time it consumes when you have done nothing wrong. It would be like the police turning up to your house and demanding you have a receipt for every item in your house. Any item you do not have a receipt for is assumed to be stolen and you have to pay for it. The burden of proof is placed on you to prove you did not steal it. Normally the burden of proof is on the police to prove you have stolen, suddenly it has been turned upside down. Can you prove you have purchased every copy of every software instance on every computer in your organization? Maybe you can because you have excellent record keeping but most are not so efficient. Maybe the invoice cannot be found because it was not forwarded to the right person. Or a paper invoice has been filed incorrectly and nobody can find it. You KNOW you paid for it but cannot prove it. Sorry, but you are guilty and have to pay $10,000 for that server license again. Try explaining that to your boss.
    - qes 7y ago
      > It would be like the police turning up to your house and demanding you have a receipt for every item in your house. Any item you do not have a receipt for is assumed to be stolen and you have to pay for it. The burden of proof is placed on you to prove you did not steal it. Normally the burden of proof is on the police to prove you have stolen, suddenly it has been turned upside down. So, under what legal authority can Oracle or Microsoft or Red Hat or IBM _force_ you to submit to an audit?
      - lmm 7y ago
        It's in the contract you sign with them to get their software in the first place. (Of course, if you're smart you don't. I worked for a place that had a sales pitch from Oracle, wanted to use their product, but cut off all contact once our lawyers got a look at the contract they were proposing)
    - op00to 7y ago
      Your police analogy only makes sense if you shop at a warehouse club. You sign a contract (subscription) that agrees to let you take whatever you want (content) from the warehouse store (vendor), but at the end of the year (subscription term), you agree to let the warehouse club work out what you took (true-up) from the store by looking in your garbage (logs, DB, whatever you use to track usage). If you then are so disorganized at your job that you empty the trash, throw out the receipts, then sit dumbfounded as your contractual obligations come to roost, maybe that conversation with your boss should probably be uncomfortable.
  - SteveNuts 7y ago
    Oracle makes their licensing model intentionally impossible to be compliant. It's not just "you run x number of instances you owe us y dollars". It's "you enabled x feature on your database times y users oh and use this handy CPU core count chart to calculate how many cores you're using. Oh and you're running your database in a virtual machine with a clustered hypervisor so you owe us for every cpu core in your cluster". Then they tell you how much they owe you but "it will all go away if you migrate some of your stuff over to our 'cloud'" and the process starts all over again in 2 years, or less. Fuck Oracle.
    - curt15 7y ago
      Any other companies set their licensing structure like they are laying landmines?
      - SteveNuts 7y ago
        Microsoft, with SQL server. But when you deal with their auditors you just settle your bill and you're done. They don't turn it into an extortionate sales pitch.
      - dx87 7y ago
        I've heard Microsoft's is pretty complicated, they even have a certification exam to prove you understand their licensing. https://www.microsoft.com/en-us/learning/exam-70-705.aspx https://www.microsoft.com/en-us/learning/exam-70-705.aspx
        jm4 7y ago
        It hasn’t been that bad for me. I give them an updated user count and tell them what else I’m using once per year and they give me a bill. They’ve never pushed back on anything. We start with a conference call, I send over a spreadsheet and that’s it. They have software I can run on my network, but they have always let me give them the numbers from my asset tracking system. Frankly, they’re one of the easiest software vendors I deal with.
  - mathattack 7y ago
    It’s not about counting licenses. It’s the hassles of responding to proving you’re not in breech or complex contracts signed over decades when the vendors change product names, definitions and terms every few years. It’s gotten so complicated that these vendors hire specialized firms to go after their customers, who then have to buy software to prove they’re not stealing. This activity fills IBM’s coffers while distracting their customers.
  - pmart123 7y ago
    Well, I believe some of the licensing was combative to many realities of best 21st century business practices. SAP had several lawsuits against some of its biggest clients, and as a result, changed its pricing methodology. In that particular case, I believe SAP was trying to count every automated process or algorithm that needed access to the data for reporting and analytics as a user versus now where there’s a cost to create a new entry in an ERP system, but zero added cost to read records. Some of the hatred that has developed around licensing seems to be that the vendor is working directly against the interests of its customers.
- jammygit 7y ago
  I think IBM is why my wife’s payroll is so messed up (Canadian government job). $1B for that
  - LilBytes 7y ago
    Queensland Health had the same problem with SAP & IBM. It's hardly a coincidence that IBM consistently deliver poor outcomes for billions of dollars.
  - deleted 7y ago
    [deleted]
- closeparen 7y ago
  Do they not use activation keys like consumer software?
mey 7y ago
Hugged to death and don't see it on Coral Cache or Internet Archive. Anyone got a cache?
- Topgamer7 7y ago
  http://webcache.googleusercontent.com/search?q=cache:R4qm2iWPxwIJ:www.platformonomics.com/2019/07/a-very-cold-take-on-ibm-red-hat-and-their-hybrid-cloud-hyperbole/+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-b-d http://webcache.googleusercontent.com/search?q=cache:R4qm2iW...
alpb 7y ago
Looks like the website cannot handle Hacker News traffic. Anyone got a mirror link?
- samridh90 7y ago
  http://webcache.googleusercontent.com/search?q=cache:R4qm2iWPxwIJ:www.platformonomics.com/2019/07/a-very-cold-take-on-ibm-red-hat-and-their-hybrid-cloud-hyperbole/+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-b-d http://webcache.googleusercontent.com/search?q=cache:R4qm2iW...
privateSFacct 7y ago
Maybe they should of hosted their "cold take" on the IBM hybrid cloud?
- maldeh 7y ago
  How would hosting the site partially on-prem make things better? Or do you mean "multi-cloud"?
Topgamer7 7y ago
Hug of death, here is cached version: http://webcache.googleusercontent.com/search?q=cache:R4qm2iWPxwIJ:www.platformonomics.com/2019/07/a-very-cold-take-on-ibm-red-hat-and-their-hybrid-cloud-hyperbole/+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-b-d http://webcache.googleusercontent.com/search?q=cache:R4qm2iW...
zubairq 7y ago
Full disclosure , I work at Red Hat, but IBM buying red hat is a big deal. Just go back 40 years and IBM vs Microsoft. Microsoft bought QDos (which became windows). Now IBM bought red hat, which has openshift and
- PhilWright 7y ago
  QDOS became MS-DOS and not Windows.
  - zubairq 7y ago
    Windows only became successful because of msdos backward compatibility
    - caspper69 7y ago
      That's impossibly untrue. OS/2 2.0 had better DOS AND Windows compatibility/stability than Windows 3.1 at the time. It still got its ass handed to it. Microsoft won because they got the OEMs.
      - wilsynet 7y ago
        I used OS/2 2.x, but it needed more memory than Windows 3.1 and on the machine I had, Windows ran faster even if OS/2 was more stable. Later I tried Warp, but when Windows 95 came around, it was better too. Less stable, but better in other ways. I like this article. It communicates the nuance and complexity of the issues at the time. https://www.google.com/amp/s/arstechnica.com/information-technology/2013/11/half-an-operating-system-the-triumph-and-tragedy-of-os2/%3famp=1 https://www.google.com/amp/s/arstechnica.com/information-tec...
      - fragmede 7y ago
        Microsoft got the OEMs via anti-competitive actions. To quote myself from a few years ago: > Probably one of the worst and most egregious is Microsoft's use of a "per processor" fee in the 90's which they only stopped when the government forced them to. If you were an OEM like Dell or HP, and sold Windows on any computers, you had to pay Microsoft for a copy of Windows on all computers you sold, even ones without Windows. > This anti-competitive move meant alternative operating systems, like BeOS, or OS2/Warp, or even Linux weren't really an option. BeOS died, not on any technical merits, but because Microsoft forced it out via other means. Linux only survived because its openness made it hard to kill. https://news.ycombinator.com/item?id=9552661 https://news.ycombinator.com/item?id=9552661
Havoc 7y ago
I've been giving this some thought because well who doesn't want to glue together cloud-y things. The only version I can see is one that runs on generic nix. i.e. Spin up a VM on each cloud (and in house) and run a stack on that which software glues it together. Redundancy of sorts. ...however if that glue actually works I might as well do that with 20 sht tier providers and let the redundancy cover gloss over it. No competitive advantage for cloud providers - and each of the cloud's various competitive advantages are by definition not hybrid-able easily. Scaling? You're now dealing with multiple cloud's worth of different approaches to scaling. Good luck scaling that hybrid style in a resilient way. ...and all of this is just VMs. Add the 50 other offerings the average cloud has all with different scaling, quirks and the hybrid dream is deader than dead.
- hardwaresofton 7y ago
  > ...however if that glue actually works I might as well do that with 20 sht tier providers and let the redundancy cover gloss over it. No competitive advantage for cloud providers - and each of the cloud's various competitive advantages are by definition not hybrid-able easily. YES! I might be the only one that wants this, but this is the future I want[0][1][2]. As technology makes it easier and easier to run a cloud compute/service provider, more competition will improve the offerings. I don't know what "shit tier providers" you're referring to, but I'm not convinced of the additional value AWS is delivering when running certain services (I'm thinking postgres) which are already pretty excellent by themselves. In the end you need to hire for AWS expertise (and spend time boning up anyway/reading docs when things go wrong), and for 90% of apps 1 mid-tier postgres instance (not even a highly-available) instance is all you need until you really get traction and can afford to hire someone to look after it. I think the future is going to see the bifurcation of management (making sure it's up/efficient) and hosting (providing hardware), and plummeting prices for both as more people enter the market. The super perplexing thing is that cloud providers jumped on the kubernetes bandwagon so quickly and this is what made this commoditization possible. Pessimistically speaking, this means either they're either about to butcher the cross-cloud usability of kubernetes (i.e. drift between EKS,AKS,etc) or kubernetes was a wolf in sheep's clothing from the start. I've been cautiously watching the Service Catalog[3] feature in Kubernetes because I think it's one of the places where vendors are exerting the most control to see how it goes -- I've brought it up before, but the "Service Catalog" is basically identical to the user Operator (Controller + Custom Resource Definition) pattern, but for some reason it's being treated as different... [0]: https://news.ycombinator.com/item?id=19170073 https://news.ycombinator.com/item?id=19170073 [1]: https://news.ycombinator.com/item?id=18121150 https://news.ycombinator.com/item?id=18121150 [2]: https://news.ycombinator.com/item?id=18015057 https://news.ycombinator.com/item?id=18015057 [3]: https://kubernetes.io/docs/concepts/extend-kubernetes/service-catalog/ https://kubernetes.io/docs/concepts/extend-kubernetes/servic...
spydum 7y ago
It seems to me technology goes in cycles, and while cloud has had a meteoric rise to dominance, if the pendulum swings back to self-hosted - IBM is now poised to own a substantial part of big enterprise data center technology. I do think at $34B it's a huge gamble, but as the author said, what other choice did they have? They aren't exactly centers of innovation any more (either of them.. and yes, some innovation comes out of redhat, but lets be honest, it's been tapering off for years now).
- tyingq 7y ago
  All AWS, Azure, and Google would have to do to respond is offer cut-rate VMware hosting. There isn't a ton of moat in selling the lowest common denominator. I don't know that IBM has much lead on the other side either, from Rackspace, for example.
  - Spivak 7y ago
    I'm not sure if that would be an actual answer so an nth-wave of on-prem workloads. It's not about owning a platform to run VMs, it's about owning the software stack to enable you to run and manage, bare-metal, VMs, containers, and high-level services on your customers own hardware I their own DC or colo'd.
  - meddlepal 7y ago
    Azure already can run on-prem with Azure Stack.
    - fragmede 7y ago
      AWS's "on-prem EC2" is called Outposts https://aws.amazon.com/outposts/ https://aws.amazon.com/outposts/
- pmart123 7y ago
  While there certainly could be a shift back, it seems like it will likely occur because of edge computing. The cloud is still relevant here, but the question also becomes what a company could do if it had distributed sensors, etc. everywhere. I’m not sure that this helps Redhat or IBM though as it really breaks how they currently license software. AWS also already has software infrastructure offerings here as well so they could already be positioned to benefit if the trend changes.
wearsaredhat 7y ago
AT&T sees it differently. IBM snags AT&T as client in new cloud deal worth ‘billions’ https://www.cnbc.com/2019/07/16/ibm-signs-new-cloud-deal-with-att.html https://www.cnbc.com/2019/07/16/ibm-signs-new-cloud-deal-wit... “As part of the agreement announced Tuesday, AT&T will use Red Hat’s open-source platform to manage workloads and applications and “better serve” enterprise customers.”
- opportune 7y ago
  One debt-laden dinosaur that keeps throwing billions of dollars at the wall to see what sticks striking a deal with another dinosaur doing the same thing. Wall street has little confidence in both companies' growth stories considering their P/Es
- nixgeek 7y ago
  They also did a deal with Microsoft so not sure what to make of this. https://www.cnbc.com/2019/07/16/microsoft-wins-multibillion-dollar-cloud-deal-from-att.html https://www.cnbc.com/2019/07/16/microsoft-wins-multibillion-...
  - tallanvor 7y ago
    Well, the Microsoft deal includes M365, so that's Windows, Exchange Online, SharePoint Online, and such. There's probably Azure credits to move some employee-centered services into the cloud and more easily interface with AD/AAD. On the IBM side, I can imagine they focused on pushing more of the back end systems into IBM's cloud. Possibly some of the monitoring and management systems for AT&T's hardware, and to make it easier to deploy systems for enterprise customers that don't require dedicated hardware. Edit: this is obviously speculation. But based on the news articles I've read, that's what makes the most sense to me.
    - Sylamore 7y ago
      I'm saying the news articles are focusing on the wrong stuff compared to what we're actually doing internally. The news articles are PR pieces that don't outline the actual strategy in play. M365 was already in place, that's not new at all every employee already had access to those capabilities. IBM is basically taking over the internal cloud stuff that's not AIC - e.g. vmware and all of the employees that go with it and all the bare metal system support too.
Merrill 7y ago
How did the author not quote the metaphor "tying two bricks together won't make them float"?
- apathy 7y ago
  Timeless wisdom.
- fooker 7y ago
  How many bricks do you need to tie together to make a brick ship though?
  - SahAssar 7y ago
    Enough to make them into the shape of a ship.
- kitd 7y ago
  Just to be "that guy", concrete hulls are a thing ;) https://en.wikipedia.org/wiki/Concrete_ship https://en.wikipedia.org/wiki/Concrete_ship
  - SahAssar 7y ago
    It's about the shape, not the material.
cwyers 7y ago
> But if the strategic logic is to “change everything” thereby “resetting the cloud landscape”, they’re really paying over $34 billion for OpenShift. Which is a vanilla container runtime. That is open source. That IBM already had at least one of (as does everyone else in the industry, including the hyper-scale clouds). And one that isn’t a dominant brand or implementation. IBM could have bought both Docker and Pivotal at a nice premium for a quarter the price of Red Hat and gotten better assets if that is the strategy. So I guess the question is... why didn't they?
- pm90 7y ago
  Because they tried and failed.
  - djsumdog 7y ago
    They attempted to buy Mobi/Docker? That's pretty sad if your company says, "We've not going to take this buyout, because we'd rather our platform survive than take your money and watch you kill it."
    - ageek123 7y ago
      I think the parent comment warrants a <citation needed>
      - parasubvert 7y ago
        I refer you to the song “No one else was in the room where it happened” on the Hamilton Soundtrack. Not everything can be cited.
        simonebrunozzi 7y ago
        But then, maybe there was no room. There's no way to believe a random HN comment on such an important issue just on face value.
jbotz 7y ago
Pretty interesting. Probably right. So what's next? After flailing around for a while longer IBM will be up for sale. Who will be the buyer? That's easy: Microsoft!
- gvb 7y ago
  Oracle, not Microsoft. Microsoft doesn't need anything they have. Oracle is already selling their (Oracle-rebranded) version of RHEL plus the Oracle database business ties in with the IBM mainframe business.
  - pmart123 7y ago
    Maybe LBO? IBM still has some assets specialty assets like CPLEX for optimization where I believe they are the go to solution. I’m guessing if there was a buyout, some of the assets that could be adopted to a SaaS/cloud product could be sold off to the big players.
nickpsecurity 7y ago
The best explanation I read was that IBM has bet the farm on Linux as a major dependency, Red Hat was a major contributor with successes they couldn't achieve, and IBM basically internalized a dependency on Red Hat to be in control with maybe other benefits down the line. Now the biggest, two contributors to Linux are the same company. I could see them doing a huge deal just for that.
- JesseObrien 7y ago
  I don't disagree that they're a major contributor to Linux itself, however RHEL usage is plummeting over the last 5 years as stated in the article. Being a contributor and owning RHEL is really no advantage at this point.
  - nickpsecurity 7y ago
    Are you saying that from your perspective or what you think IBM's is? It's the latter that determines their actions. I'm guessing at it for sure. I just don't think you see it their way given difference in your statement and what they paid.
  - altmind 7y ago
    Redhat profits were growing for 4 years steadily 15-20% for each of last four years. I dont see the confirmation of redhat usage declining, more like very perspective and growing company. https://www.macrotrends.net/stocks/charts/RHT//revenue https://www.macrotrends.net/stocks/charts/RHT//revenue https://finance.yahoo.com/quote/RHT/financials?p=RHT https://finance.yahoo.com/quote/RHT/financials?p=RHT
djsumdog 7y ago
It makes me think of Sears buying Kmart
- SmellyPotato22 7y ago
  Kmart bought sears [1] [1] https://en.wikipedia.org/wiki/Kmart#Headquarters https://en.wikipedia.org/wiki/Kmart#Headquarters
ilaksh 7y ago
So basically its like a beach party where they have a bonfire and burn massive stacks of cash. How do the people organizing this not know what they are doing? Or is it like, any kind of large bonfire is good for their careers?
codec01 7y ago
This is total bullshit. Pivotal’s stock is $10 now, how the hell does your “back channel source” claim they have more paid customers than Red Hat? At Summit Red Hat had 1000 paid customer references. This guy must be short IBM to put out this kind of crap.
- parasubvert 7y ago
  And Red Hat’s stock tanked due to multiple bad quarters as well. What’s your point? It’s hard to be a mid-sized ISV these days unless you also own the hardware or have a massive franchise. Red Hat’s franchise was fading and OpenShift wasn’t growing quick enough to offset it. Meanwhile IBM needed a major strategic shakeup. Red Hat didn’t report OpenShift revenue, it conflates it with JBoss, Ansible, and all other middleware products. I have no doubt there are more paying OpenShift customers in quantity, but I wonder about revenues - Cloud Foundry always was larger than OpenShift, and if OpenShift surpassed it, that would be indeed news. Cloud Foundry is easily a $500m software business at Pivotal alone, not counting services. It’s all peanuts in the grand scheme of the industry so far - which is the point of this post. What does $38 billion actually buy IBM? A bunch of $150k-500k annual revenue customers? chairs on a bunch of Kubernetes SIGs? VMware got that with Heptio for $500m. Mostly it’s the K8s and Linux brain trust , and maybe Whitehurst as a new CEO in waiting, but that’s a hell of a price for an aquihire.
  - fatherlinnux 7y ago
    Small correction, it's ALWAYS been hard to be a mid-sized software company. We were constantly talking about the 5 or so companies that reached 5B with software only. They are rare birds indeed. Red Hat didn't make it without getting bought... (full disclosure, I work at Red Hat)
someguydave 7y ago
RHEL will be around for a long time because the government demands something like it. All the other businesses stacked around it are dubious prospects at best.
- windexh8er 7y ago
  While not untrue it would have been far more brilliant for a defense contractor to buy RHEL.
  - someguydave 7y ago
    IBM is a defense contractor.
    - windexh8er 7y ago
      IBM is generally a subcontractor to a prime. They are rarely a prime. IBM doesn't compete in fed at the level Lockheed or Raytheon, for example, do.
- compuguy 7y ago
  With the move to cloud services, governments may gravitate towards CentOS (which is based on RHEL)...
  - someguydave 7y ago
    CentOS is owned by Redhat
    - compuguy 7y ago
      I'm quite aware of this.
sizeofchar 7y ago
Ignoring the merit of the analysis, this text if very difficult to read. To many parenthesis, onomatopoeias and inside jokes. I know the author is well regarded for many books (I haven’t read any), but I think he has to be more objective in blog posts.
crb002 7y ago
IBM needs to do a take bids from MS Google and AWS to host mainframes in all their regions. Go with the lowest bidder and stay relevant.
prirun 7y ago
My guess is that after the GitHub acquisition, IBM was afraid Microsoft would buy RedHat to gain more control of Linux. I'm kinda surprised MS hasn't bought Ubuntu, but there's probably no hurry - we're still in "embrace".

174 points by pinewurst 7y ago

Most large companies don’t trust IBM anymore. RedHat has joined them in turning license audits into a profit center. Defending unfounded audits is a large cost of business with both vendors. Hard to imagine many folks trusting them on journeys with new technology.

anonoholic 7y ago
> RedHat has joined them in turning license audits into a profit center. If a company is using licenses it hasn't paid for, and so isn't entitled to, why is the vendor the bad guy for catching them out? Maybe I'm the odd one out here as an individual in paying for the movies I watch, and the music I listen to; but I would expect a business to pay for the software it's using, irrespective of your stance on "big media".
- privateSFacct 7y ago
  Oracle made a business of squeezing lots of unreasonable corners here, so folks have soured a bit on what would be an otherwise reasonable process. Best would be some kind of random third party CPA firm or something do a balanced audit against standards without the screw you upsell to avoid total destruction on the license fee side.
- __jal 7y ago
  There is a huge gulf between wanting your customers to pay what they owe you and this sort of "audit". I make a serious point of doing what I can to steer my employers away from any outfit that believes adversarial relations with their own customers are ideal. Screw that; I want to compete with my real competitors, not waste money on lawyers fighting my own supply chain. So yeah, I want to see if they go full-Larry Ellison here, but I likely longer recommend anything Redhat and will look at moving away from the things we do use. Sad, really.
  - hermitdev 7y ago
    I turned down a job offer with such an adversarial company this year, only interviewed so my recruiter would keep sending interviews. I knew the company by reputation: that they had a habbit of suing customers for patent violations. The commute would have been easier. Bit longer (train) than the job I took (driving 15 miles opposite traffic). The job I took pays $20k less a year, but is worth it when factoring in less unpaid overtime, shorter commute amd reduced stress. My wife wanted me to take the higher paying job, but after explaining that, per hour, I'd be making less and only home for 1 waking hour during the week, she agreed. Also have better health insurance at the lower paying job.
- PhilWright 7y ago
  Being caught out using software you did not correctly license is not the problem. That would be fair enough. It is the burden of proof and the time it consumes when you have done nothing wrong. It would be like the police turning up to your house and demanding you have a receipt for every item in your house. Any item you do not have a receipt for is assumed to be stolen and you have to pay for it. The burden of proof is placed on you to prove you did not steal it. Normally the burden of proof is on the police to prove you have stolen, suddenly it has been turned upside down. Can you prove you have purchased every copy of every software instance on every computer in your organization? Maybe you can because you have excellent record keeping but most are not so efficient. Maybe the invoice cannot be found because it was not forwarded to the right person. Or a paper invoice has been filed incorrectly and nobody can find it. You KNOW you paid for it but cannot prove it. Sorry, but you are guilty and have to pay $10,000 for that server license again. Try explaining that to your boss.
  - qes 7y ago
    > It would be like the police turning up to your house and demanding you have a receipt for every item in your house. Any item you do not have a receipt for is assumed to be stolen and you have to pay for it. The burden of proof is placed on you to prove you did not steal it. Normally the burden of proof is on the police to prove you have stolen, suddenly it has been turned upside down. So, under what legal authority can Oracle or Microsoft or Red Hat or IBM _force_ you to submit to an audit?
    - lmm 7y ago
      It's in the contract you sign with them to get their software in the first place. (Of course, if you're smart you don't. I worked for a place that had a sales pitch from Oracle, wanted to use their product, but cut off all contact once our lawyers got a look at the contract they were proposing)
  - op00to 7y ago
    Your police analogy only makes sense if you shop at a warehouse club. You sign a contract (subscription) that agrees to let you take whatever you want (content) from the warehouse store (vendor), but at the end of the year (subscription term), you agree to let the warehouse club work out what you took (true-up) from the store by looking in your garbage (logs, DB, whatever you use to track usage). If you then are so disorganized at your job that you empty the trash, throw out the receipts, then sit dumbfounded as your contractual obligations come to roost, maybe that conversation with your boss should probably be uncomfortable.
- SteveNuts 7y ago
  Oracle makes their licensing model intentionally impossible to be compliant. It's not just "you run x number of instances you owe us y dollars". It's "you enabled x feature on your database times y users oh and use this handy CPU core count chart to calculate how many cores you're using. Oh and you're running your database in a virtual machine with a clustered hypervisor so you owe us for every cpu core in your cluster". Then they tell you how much they owe you but "it will all go away if you migrate some of your stuff over to our 'cloud'" and the process starts all over again in 2 years, or less. Fuck Oracle.
  - curt15 7y ago
    Any other companies set their licensing structure like they are laying landmines?
    - SteveNuts 7y ago
      Microsoft, with SQL server. But when you deal with their auditors you just settle your bill and you're done. They don't turn it into an extortionate sales pitch.
    - dx87 7y ago
      I've heard Microsoft's is pretty complicated, they even have a certification exam to prove you understand their licensing. https://www.microsoft.com/en-us/learning/exam-70-705.aspx https://www.microsoft.com/en-us/learning/exam-70-705.aspx
      - jm4 7y ago
        It hasn’t been that bad for me. I give them an updated user count and tell them what else I’m using once per year and they give me a bill. They’ve never pushed back on anything. We start with a conference call, I send over a spreadsheet and that’s it. They have software I can run on my network, but they have always let me give them the numbers from my asset tracking system. Frankly, they’re one of the easiest software vendors I deal with.
- mathattack 7y ago
  It’s not about counting licenses. It’s the hassles of responding to proving you’re not in breech or complex contracts signed over decades when the vendors change product names, definitions and terms every few years. It’s gotten so complicated that these vendors hire specialized firms to go after their customers, who then have to buy software to prove they’re not stealing. This activity fills IBM’s coffers while distracting their customers.
- pmart123 7y ago
  Well, I believe some of the licensing was combative to many realities of best 21st century business practices. SAP had several lawsuits against some of its biggest clients, and as a result, changed its pricing methodology. In that particular case, I believe SAP was trying to count every automated process or algorithm that needed access to the data for reporting and analytics as a user versus now where there’s a cost to create a new entry in an ERP system, but zero added cost to read records. Some of the hatred that has developed around licensing seems to be that the vendor is working directly against the interests of its customers.
jammygit 7y ago
I think IBM is why my wife’s payroll is so messed up (Canadian government job). $1B for that
- LilBytes 7y ago
  Queensland Health had the same problem with SAP & IBM. It's hardly a coincidence that IBM consistently deliver poor outcomes for billions of dollars.
- deleted 7y ago
  [deleted]
closeparen 7y ago
Do they not use activation keys like consumer software?

mey 7y ago

Hugged to death and don't see it on Coral Cache or Internet Archive. Anyone got a cache?

Topgamer7 7y ago
http://webcache.googleusercontent.com/search?q=cache:R4qm2iWPxwIJ:www.platformonomics.com/2019/07/a-very-cold-take-on-ibm-red-hat-and-their-hybrid-cloud-hyperbole/+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-b-d http://webcache.googleusercontent.com/search?q=cache:R4qm2iW...

alpb 7y ago

Looks like the website cannot handle Hacker News traffic. Anyone got a mirror link?

samridh90 7y ago
http://webcache.googleusercontent.com/search?q=cache:R4qm2iWPxwIJ:www.platformonomics.com/2019/07/a-very-cold-take-on-ibm-red-hat-and-their-hybrid-cloud-hyperbole/+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-b-d http://webcache.googleusercontent.com/search?q=cache:R4qm2iW...

privateSFacct 7y ago

Maybe they should of hosted their "cold take" on the IBM hybrid cloud?

maldeh 7y ago
How would hosting the site partially on-prem make things better? Or do you mean "multi-cloud"?

Topgamer7 7y ago

Hug of death, here is cached version: http://webcache.googleusercontent.com/search?q=cache:R4qm2iWPxwIJ:www.platformonomics.com/2019/07/a-very-cold-take-on-ibm-red-hat-and-their-hybrid-cloud-hyperbole/+&cd=1&hl=en&ct=clnk&gl=ca&client=firefox-b-d http://webcache.googleusercontent.com/search?q=cache:R4qm2iW...

zubairq 7y ago

Full disclosure , I work at Red Hat, but IBM buying red hat is a big deal. Just go back 40 years and IBM vs Microsoft. Microsoft bought QDos (which became windows). Now IBM bought red hat, which has openshift and

PhilWright 7y ago
QDOS became MS-DOS and not Windows.
- zubairq 7y ago
  Windows only became successful because of msdos backward compatibility
  - caspper69 7y ago
    That's impossibly untrue. OS/2 2.0 had better DOS AND Windows compatibility/stability than Windows 3.1 at the time. It still got its ass handed to it. Microsoft won because they got the OEMs.
    - wilsynet 7y ago
      I used OS/2 2.x, but it needed more memory than Windows 3.1 and on the machine I had, Windows ran faster even if OS/2 was more stable. Later I tried Warp, but when Windows 95 came around, it was better too. Less stable, but better in other ways. I like this article. It communicates the nuance and complexity of the issues at the time. https://www.google.com/amp/s/arstechnica.com/information-technology/2013/11/half-an-operating-system-the-triumph-and-tragedy-of-os2/%3famp=1 https://www.google.com/amp/s/arstechnica.com/information-tec...
    - fragmede 7y ago
      Microsoft got the OEMs via anti-competitive actions. To quote myself from a few years ago: > Probably one of the worst and most egregious is Microsoft's use of a "per processor" fee in the 90's which they only stopped when the government forced them to. If you were an OEM like Dell or HP, and sold Windows on any computers, you had to pay Microsoft for a copy of Windows on all computers you sold, even ones without Windows. > This anti-competitive move meant alternative operating systems, like BeOS, or OS2/Warp, or even Linux weren't really an option. BeOS died, not on any technical merits, but because Microsoft forced it out via other means. Linux only survived because its openness made it hard to kill. https://news.ycombinator.com/item?id=9552661 https://news.ycombinator.com/item?id=9552661

Havoc 7y ago

I've been giving this some thought because well who doesn't want to glue together cloud-y things. The only version I can see is one that runs on generic nix. i.e. Spin up a VM on each cloud (and in house) and run a stack on that which software glues it together. Redundancy of sorts. ...however if that glue actually works I might as well do that with 20 sht tier providers and let the redundancy cover gloss over it. No competitive advantage for cloud providers - and each of the cloud's various competitive advantages are by definition not hybrid-able easily. Scaling? You're now dealing with multiple cloud's worth of different approaches to scaling. Good luck scaling that hybrid style in a resilient way. ...and all of this is just VMs. Add the 50 other offerings the average cloud has all with different scaling, quirks and the hybrid dream is deader than dead.

hardwaresofton 7y ago
> ...however if that glue actually works I might as well do that with 20 sht tier providers and let the redundancy cover gloss over it. No competitive advantage for cloud providers - and each of the cloud's various competitive advantages are by definition not hybrid-able easily. YES! I might be the only one that wants this, but this is the future I want[0][1][2]. As technology makes it easier and easier to run a cloud compute/service provider, more competition will improve the offerings. I don't know what "shit tier providers" you're referring to, but I'm not convinced of the additional value AWS is delivering when running certain services (I'm thinking postgres) which are already pretty excellent by themselves. In the end you need to hire for AWS expertise (and spend time boning up anyway/reading docs when things go wrong), and for 90% of apps 1 mid-tier postgres instance (not even a highly-available) instance is all you need until you really get traction and can afford to hire someone to look after it. I think the future is going to see the bifurcation of management (making sure it's up/efficient) and hosting (providing hardware), and plummeting prices for both as more people enter the market. The super perplexing thing is that cloud providers jumped on the kubernetes bandwagon so quickly and this is what made this commoditization possible. Pessimistically speaking, this means either they're either about to butcher the cross-cloud usability of kubernetes (i.e. drift between EKS,AKS,etc) or kubernetes was a wolf in sheep's clothing from the start. I've been cautiously watching the Service Catalog[3] feature in Kubernetes because I think it's one of the places where vendors are exerting the most control to see how it goes -- I've brought it up before, but the "Service Catalog" is basically identical to the user Operator (Controller + Custom Resource Definition) pattern, but for some reason it's being treated as different... [0]: https://news.ycombinator.com/item?id=19170073 https://news.ycombinator.com/item?id=19170073 [1]: https://news.ycombinator.com/item?id=18121150 https://news.ycombinator.com/item?id=18121150 [2]: https://news.ycombinator.com/item?id=18015057 https://news.ycombinator.com/item?id=18015057 [3]: https://kubernetes.io/docs/concepts/extend-kubernetes/service-catalog/ https://kubernetes.io/docs/concepts/extend-kubernetes/servic...

spydum 7y ago

It seems to me technology goes in cycles, and while cloud has had a meteoric rise to dominance, if the pendulum swings back to self-hosted - IBM is now poised to own a substantial part of big enterprise data center technology. I do think at $34B it's a huge gamble, but as the author said, what other choice did they have? They aren't exactly centers of innovation any more (either of them.. and yes, some innovation comes out of redhat, but lets be honest, it's been tapering off for years now).

tyingq 7y ago
All AWS, Azure, and Google would have to do to respond is offer cut-rate VMware hosting. There isn't a ton of moat in selling the lowest common denominator. I don't know that IBM has much lead on the other side either, from Rackspace, for example.
- Spivak 7y ago
  I'm not sure if that would be an actual answer so an nth-wave of on-prem workloads. It's not about owning a platform to run VMs, it's about owning the software stack to enable you to run and manage, bare-metal, VMs, containers, and high-level services on your customers own hardware I their own DC or colo'd.
- meddlepal 7y ago
  Azure already can run on-prem with Azure Stack.
  - fragmede 7y ago
    AWS's "on-prem EC2" is called Outposts https://aws.amazon.com/outposts/ https://aws.amazon.com/outposts/
pmart123 7y ago
While there certainly could be a shift back, it seems like it will likely occur because of edge computing. The cloud is still relevant here, but the question also becomes what a company could do if it had distributed sensors, etc. everywhere. I’m not sure that this helps Redhat or IBM though as it really breaks how they currently license software. AWS also already has software infrastructure offerings here as well so they could already be positioned to benefit if the trend changes.

wearsaredhat 7y ago

AT&T sees it differently. IBM snags AT&T as client in new cloud deal worth ‘billions’ https://www.cnbc.com/2019/07/16/ibm-signs-new-cloud-deal-with-att.html https://www.cnbc.com/2019/07/16/ibm-signs-new-cloud-deal-wit... “As part of the agreement announced Tuesday, AT&T will use Red Hat’s open-source platform to manage workloads and applications and “better serve” enterprise customers.”

opportune 7y ago
One debt-laden dinosaur that keeps throwing billions of dollars at the wall to see what sticks striking a deal with another dinosaur doing the same thing. Wall street has little confidence in both companies' growth stories considering their P/Es
nixgeek 7y ago
They also did a deal with Microsoft so not sure what to make of this. https://www.cnbc.com/2019/07/16/microsoft-wins-multibillion-dollar-cloud-deal-from-att.html https://www.cnbc.com/2019/07/16/microsoft-wins-multibillion-...
- tallanvor 7y ago
  Well, the Microsoft deal includes M365, so that's Windows, Exchange Online, SharePoint Online, and such. There's probably Azure credits to move some employee-centered services into the cloud and more easily interface with AD/AAD. On the IBM side, I can imagine they focused on pushing more of the back end systems into IBM's cloud. Possibly some of the monitoring and management systems for AT&T's hardware, and to make it easier to deploy systems for enterprise customers that don't require dedicated hardware. Edit: this is obviously speculation. But based on the news articles I've read, that's what makes the most sense to me.
  - Sylamore 7y ago
    I'm saying the news articles are focusing on the wrong stuff compared to what we're actually doing internally. The news articles are PR pieces that don't outline the actual strategy in play. M365 was already in place, that's not new at all every employee already had access to those capabilities. IBM is basically taking over the internal cloud stuff that's not AIC - e.g. vmware and all of the employees that go with it and all the bare metal system support too.

Merrill 7y ago

How did the author not quote the metaphor "tying two bricks together won't make them float"?

apathy 7y ago
Timeless wisdom.
fooker 7y ago
How many bricks do you need to tie together to make a brick ship though?
- SahAssar 7y ago
  Enough to make them into the shape of a ship.
kitd 7y ago
Just to be "that guy", concrete hulls are a thing ;) https://en.wikipedia.org/wiki/Concrete_ship https://en.wikipedia.org/wiki/Concrete_ship
- SahAssar 7y ago
  It's about the shape, not the material.

cwyers 7y ago

> But if the strategic logic is to “change everything” thereby “resetting the cloud landscape”, they’re really paying over $34 billion for OpenShift. Which is a vanilla container runtime. That is open source. That IBM already had at least one of (as does everyone else in the industry, including the hyper-scale clouds). And one that isn’t a dominant brand or implementation. IBM could have bought both Docker and Pivotal at a nice premium for a quarter the price of Red Hat and gotten better assets if that is the strategy. So I guess the question is... why didn't they?

pm90 7y ago
Because they tried and failed.
- djsumdog 7y ago
  They attempted to buy Mobi/Docker? That's pretty sad if your company says, "We've not going to take this buyout, because we'd rather our platform survive than take your money and watch you kill it."
  - ageek123 7y ago
    I think the parent comment warrants a <citation needed>
    - parasubvert 7y ago
      I refer you to the song “No one else was in the room where it happened” on the Hamilton Soundtrack. Not everything can be cited.
      - simonebrunozzi 7y ago
        But then, maybe there was no room. There's no way to believe a random HN comment on such an important issue just on face value.

jbotz 7y ago

Pretty interesting. Probably right. So what's next? After flailing around for a while longer IBM will be up for sale. Who will be the buyer? That's easy: Microsoft!

gvb 7y ago
Oracle, not Microsoft. Microsoft doesn't need anything they have. Oracle is already selling their (Oracle-rebranded) version of RHEL plus the Oracle database business ties in with the IBM mainframe business.
- pmart123 7y ago
  Maybe LBO? IBM still has some assets specialty assets like CPLEX for optimization where I believe they are the go to solution. I’m guessing if there was a buyout, some of the assets that could be adopted to a SaaS/cloud product could be sold off to the big players.

nickpsecurity 7y ago

The best explanation I read was that IBM has bet the farm on Linux as a major dependency, Red Hat was a major contributor with successes they couldn't achieve, and IBM basically internalized a dependency on Red Hat to be in control with maybe other benefits down the line. Now the biggest, two contributors to Linux are the same company. I could see them doing a huge deal just for that.

JesseObrien 7y ago
I don't disagree that they're a major contributor to Linux itself, however RHEL usage is plummeting over the last 5 years as stated in the article. Being a contributor and owning RHEL is really no advantage at this point.
- nickpsecurity 7y ago
  Are you saying that from your perspective or what you think IBM's is? It's the latter that determines their actions. I'm guessing at it for sure. I just don't think you see it their way given difference in your statement and what they paid.
- altmind 7y ago
  Redhat profits were growing for 4 years steadily 15-20% for each of last four years. I dont see the confirmation of redhat usage declining, more like very perspective and growing company. https://www.macrotrends.net/stocks/charts/RHT//revenue https://www.macrotrends.net/stocks/charts/RHT//revenue https://finance.yahoo.com/quote/RHT/financials?p=RHT https://finance.yahoo.com/quote/RHT/financials?p=RHT

djsumdog 7y ago

It makes me think of Sears buying Kmart

SmellyPotato22 7y ago
Kmart bought sears [1] [1] https://en.wikipedia.org/wiki/Kmart#Headquarters https://en.wikipedia.org/wiki/Kmart#Headquarters

ilaksh 7y ago

So basically its like a beach party where they have a bonfire and burn massive stacks of cash. How do the people organizing this not know what they are doing? Or is it like, any kind of large bonfire is good for their careers?

codec01 7y ago

This is total bullshit. Pivotal’s stock is $10 now, how the hell does your “back channel source” claim they have more paid customers than Red Hat? At Summit Red Hat had 1000 paid customer references. This guy must be short IBM to put out this kind of crap.

parasubvert 7y ago
And Red Hat’s stock tanked due to multiple bad quarters as well. What’s your point? It’s hard to be a mid-sized ISV these days unless you also own the hardware or have a massive franchise. Red Hat’s franchise was fading and OpenShift wasn’t growing quick enough to offset it. Meanwhile IBM needed a major strategic shakeup. Red Hat didn’t report OpenShift revenue, it conflates it with JBoss, Ansible, and all other middleware products. I have no doubt there are more paying OpenShift customers in quantity, but I wonder about revenues - Cloud Foundry always was larger than OpenShift, and if OpenShift surpassed it, that would be indeed news. Cloud Foundry is easily a $500m software business at Pivotal alone, not counting services. It’s all peanuts in the grand scheme of the industry so far - which is the point of this post. What does $38 billion actually buy IBM? A bunch of $150k-500k annual revenue customers? chairs on a bunch of Kubernetes SIGs? VMware got that with Heptio for $500m. Mostly it’s the K8s and Linux brain trust , and maybe Whitehurst as a new CEO in waiting, but that’s a hell of a price for an aquihire.
- fatherlinnux 7y ago
  Small correction, it's ALWAYS been hard to be a mid-sized software company. We were constantly talking about the 5 or so companies that reached 5B with software only. They are rare birds indeed. Red Hat didn't make it without getting bought... (full disclosure, I work at Red Hat)

someguydave 7y ago

RHEL will be around for a long time because the government demands something like it. All the other businesses stacked around it are dubious prospects at best.

windexh8er 7y ago
While not untrue it would have been far more brilliant for a defense contractor to buy RHEL.
- someguydave 7y ago
  IBM is a defense contractor.
  - windexh8er 7y ago
    IBM is generally a subcontractor to a prime. They are rarely a prime. IBM doesn't compete in fed at the level Lockheed or Raytheon, for example, do.
compuguy 7y ago
With the move to cloud services, governments may gravitate towards CentOS (which is based on RHEL)...
- someguydave 7y ago
  CentOS is owned by Redhat
  - compuguy 7y ago
    I'm quite aware of this.

sizeofchar 7y ago

Ignoring the merit of the analysis, this text if very difficult to read. To many parenthesis, onomatopoeias and inside jokes. I know the author is well regarded for many books (I haven’t read any), but I think he has to be more objective in blog posts.

crb002 7y ago

IBM needs to do a take bids from MS Google and AWS to host mainframes in all their regions. Go with the lowest bidder and stay relevant.

prirun 7y ago

My guess is that after the GitHub acquisition, IBM was afraid Microsoft would buy RedHat to gain more control of Linux. I'm kinda surprised MS hasn't bought Ubuntu, but there's probably no hurry - we're still in "embrace".