Official: IBM to gobble Red Hat for $34bn – yes, the enterprise Linux biz IBM intends to acquire enterprise Linux maker Red Hat for $34bn (£27bn). Following rumors of a deal over the weekend, Big Blue announced the move here, in the past hour, and Red Hat's take is here. IBM made an offer of $190 per issued and outstanding Red Hat share, which was accepted: the current price stands at $116. …
IBMer thinks: "I don't like systemd. If I were in charge, I could close it down".
Pauses. Reaches for their Internal Memo pad (for this is IBM afterall), and sharpens their best, most impressive pencil.
Next thing we know it's giga-cheque books at dawn, and some gleeful looking IBM wonk is in charge of systemd.
Seriously though, this does mean that IBM will also control the CentOS project. Nothing particularly wrong with that in my view, IBM have been good friends to Linux over the decades, but it is a whole hunk of consolidation of a sort in the market.
I remember similar things being said about Lotus, when all it turned out they really wanted was the replication technology from Notes to shove into DB2. Everything else was allowed to wither on the vine.
Same will happen here - destroy the corporate culture, ruin the business so they can get - what, exactly?
PS: could we have a grim reaper icon? I mean, it is nearly Halloween after all...
Not exactly accurate. Big Blue promoted the sh*t out of Notes, required all its partners to use Notes to do business with IBM divisions, and generally caused the software to live on a decade longer than it should have. The big differences are that RHEL and associated products are open source and their devs at the center of the Linux universe. Lotus was an innovative company, but not an industry leader, and its tech was the classic walled garden. It had nothing like the influence RHAT does through its employees involvement in the oss stack.
That said, bean counters and egomaniacal execs being what they are, if the RHATters don't wind up taking over IBM a la TW/AOL in a very short time then this could be a very sad end to a good company. What was it that Feynman said? "Nature cannot be fooled."
Competence cannot be faked.
At least not for very long.
This has very little to do with Linux. IBM has realised there is enough of a market for on-prem and hybrid cloud and their current range just doesn't cut it. MS have delayed (again) with on prem azure and OpenShift is the most mature product out there and they have windows in a container support coming soon.
Of course the real question is how badly with they f**k it up or if they will leave Redhat to continue developing their products instead of trying to do some half arsed integration.
Plus of course getting rid of dinosaur IT and injecting fresh blood who don't have huge pension commitments will help.
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Congrats Red Hat. You are marrying a girl with 80B in debt that will be more than 3x leveraged soon and will have their credit rating downgraded to a BB or less after this and that means creditors will start charging substantially more interest on that 80B in debt you just married.
Hope you like beans and toast because you will never see steaks again, and don’t ever plan on taking any vacations for the rest of your life. Those days are over.
Likely this will just end up killing both of the companies in a massive debt spiral in pretty quick time but, have fun you newlyweds.
"Oh, WebSphere and DB2 are still a thing," I recently blurted out in an interview for a job I didn't get. Fact is that IBM are sitting on a bunch of legacy tech that makes your average forward looking engineer run a mile. Customers also tend to be looking for something a little more modern. Perhaps the Red Hat buy out is best viewed through the prism of that thinking?
IBM needs to be very careful with the Red-hatters during the blue-washing process else they will lose them. Good luck to the Red-hatters with the IBM TEA system and having to pay high prices for coffee. I can foresee a huge culture shock coming and IBM must reconsider their standard integration process else this will be a flop.
One of the most surprising things is just how big IBM still are! I so rarely come across them I consider them fairly irrelevant these days, yet they're still pretty massive! I don't even know what they really do any more (I used to work for them). This is a ballsy move but as many people have mentioned, 2 companies from very different worlds!
This is smart for a few reasons - A) access to a whole new base of customers IBM may not have had access to. Can sell their watson, blockchain, etc new emerging products. B) can leverage red hat tech for free, especially in their BlueMix cloud offerings like Ansible, etc. Middleware.I agree, 34 billion for 2-3 billion revenue is...head scratching. But per above, there are some huge discrete benefits.
As for the culture and what will happen to Red Hat... oh boy. lets get the popcorn out.
"can leverage red hat tech for free..."
Nothing is free. Not now, not ever. If IBM is true to form, transfer prices for support, services, subscription fees and all the rest between Red Hat and IBM will be at the same prices they were before this outrage. IBM doesn't fuck anybody more than it does internally. Between departments, divisions--with a healthy uplift going to the "procurement" department for it's "services."
The way IBM does "costing" and "pricing" is totally fucking outrageous. One internal uplift after another, plus an adder in case our forecast is wrong, and nothing ever succeeds. Once these internal processes infect the Red Hat operation (not to mention travel rules, no raises for years, no project money, no budgets for any departmental purposes, and consolidation of all advertising and promotion to Armonk, and Red Hat will be road kill--a stain on the highway.
I've tried to make Linux my everyday OS a few times but it always becomes a dead end deal, with the vague fix seeming to be...reinstall everything. Hmmmmm.
Anyway, I understand Red Hat creates FREE software, but charges money to make it work for you. A service. Devious if you think about it. And from my experience likely to generate quite a bit of profit.
I hope it works out for everyone concerned.
I think that will depend on how Linux works.
I've tried to make Linux my everyday OS a few times but it always becomes a dead end deal, with the vague fix seeming to be...reinstall everything. Hmmmmm.
Well, they have been trying to emulate more popular desktop OSes... they'll probably have succeeded when you need to reboot three times to install a sequence of updates and then make random updates to the registry before reinstalling everything anyway.
There was a time when the only changes that required a reboot to apply were non-module kernel changes and possibly libc.
As for the title, much easier to just run as admin all the time, amirite!?
She does seem to manage IBM for financial appearance rather than substantive product. Then one day she may simply say, 'I quit', and walk off stage with a few hundred million bucks. Nice work if you can get it. The best part is no accountability for failure. That's America these days.
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A company prone to vendor lock-in buying one of the biggest open source companies on the market. What's worse is that in some niches there are few alternatives. This is really what antitrust authorities should look into, but I suspect that they will simply gloss over these issues.
Red Hat will be a distant memory in a few years as it gets absorbed by the abhorrent IBM culture and its bones picked clean by the IBM beancounters. Nothing good ever happens to a company bought by IBM.
I worked as a contractor for IBM's IGS division in the late '90s and early 2000s at their third biggest customer, and even then, IBM was doing their best to demoralize their staff (and contractors) and annoy their customers as much as possible!
Some examples:
The on-site IBM employees (and contractors) had to use Lotus Notes for email. That was probably the worst piece of software I have ever used - I think baboons on drugs could have done a better design job. IBM set up a T1 (1.54 Mbps) link between the customer and the local IBM hub for email, etc. It sounds great until you realize there were over 150 people involved and due to the settings of Notes replication, it could often take over an hour to actually download email to read.
To do my job I needed to install some IBM software. My PC did not have enough disk space for this software as well as the other software I needed. Rather than buy me a bigger hard disk I had to spend 8 hours a week installing and reinstalling software to do my job.
I waited three months for a $50 stick of memory to be approved. When it finally arrived my machine had been changed out (due to a new customer project) and the memory was not compatible! Since I worked on a lot of projects I often had machines supplied by the customer on my desk. So, I would use one of these as my personal PC and would get an upgrade when the next project started!
I was told I could not be supplied with a laptop or desktop from IBM as they were too expensive (my IBM division did not want to spend money on anything). IBM charged themselves 3x the actual price to customers for their ThinkPads at the time! This meant that I never had a laptop or desktop PC from IBM in the 8 years I worked there. If it wasn't for the project work I did I would not have had a PC to work on!
IBM has many strange and weird processes that allow them to circumvent the contract they have with their preferred contractor companies. This meant that for a number of years I ended up getting a pay cut. What was strange is that every single time I got a pay cut, IBM would then announce that they had bought a new company! I would have quit long before I did, but I was tied to them while waiting for my Green Card to be approved. I know that raises are few in the current IBM for normal employees and that IBM always pleads poverty for any employee request. Yet, they somehow manage to pay billions of dollars for a new company. Strange that, isn't it?
Eventually I was approved to get a laptop and excitedly watched it move slowly through the delivery system. I got confused when it was reported as delivered to Ohio rather than my work (not in Ohio). After some careful searching I discovered that my manager and his wife both worked for IBM from their home in, yes you can guess, Ohio. It looked like he had redirected my new laptop for his own use and most likely was going to send me his old one and claim it was a new one. I never got the chance to confront him about it, though, as IBM lost the contract with the customer that month and before the laptop should have arrived IBM was out! I moved to the company that had won the contract and regret not having the chance to tell that IBM manager what I thought about him and where he could stick the new laptop.
After that experience I decided to never work for them in any capacity ever again. I feel pity for the current Red Hat employees and my only advice to them is to get out while they can.
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