[zdnet]How the cloud wars forced IBM to buy Red Hat for $34 billion

[Man-wai Chang]

[zdnet]How the cloud wars forced IBM to buy Red Hat for $34 billion
Full story: 
<https://www.zdnet.com/article/how-the-cloud-wars-forced-ibm-to-buy-red-hat-for-34-billion/>

IBM paid $34 billion for Red Hat and a chance to be a cloud player -- 
private, public and hybrid -- with an ultimate goal of managing multiple 
clouds in the enterprise.

The Red Hat deal is IBM's biggest acquisition yet for a reason: The 
stakes are too high and IBM has already been bumped out of the big cloud 
conversation by Amazon Web Services, Google Cloud Platform and Microsoft 
Azure.

If you can't be a big public cloud provider why not simply manage them?

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The details are worth noting:


     IBM will pay $190 per Red Hat share in cash.
     IBM CEO Ginni Rometty dissed the public cloud and noted that most 
companies are 20 percent along the cloud journey and "renting compute 
power to cut costs." The next 80 percent is about hybrid cloud.
     Red Hat CEO Jim Whitehurst said IBM will give it scale while 
preserving an open source commitment.
     Both Red Hat and IBM said the combined company will accelerate 
"hybrid multi-cloud adoption."
     Red Hat will remain a distinct unit in IBM's Hybrid Cloud unit and 
provide Big Blue with growth, software revenue and a way to grow the 
cloud business.
     IBM said it will make the purchase with cash, credit and bridge 
lines, but did note that it would be disciplined to preserve its credit 
rating. IBM will stop buying back its own shares.


Why Red Hat?

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