IBM announces $34bn acquisition of Red Hat

The US-based computer manufacturing company, IBM, has announced that it is set to purchase open-source software firm, Red Hat, for $34bn.

The deal will allow the companies to securely move all business applications to the cloud and accelerate hybrid multi-cloud adoption.

Through the agreement, IBM and Red Hat will be able to help clients create cloud-native business applications faster, drive greater portability and security of data and applications throughout a number of public and private clouds.

Ginni Rometty, IBM Chairman, President and Chief Executive Officer, said: “The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. IBM will become the world's #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

“Most companies today are only 20% along their cloud journey, renting compute power to cut costs,” she added. “The next 80% is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales.”

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IBM and Red Hat have enjoyed a partnership for 20 years and the two firms will continue to create and develop Red Hat existing partnerships with major cloud providers such as Microsoft Azure, Google Cloud, Alibaba and Amazon Web Services.

Arvind Krishna, Senior Vice President of IBM Hybrid Cloud, said: “IBM is committed to being an authentic multi-cloud provider, and we will prioritise the use of Red Hat technology across multiple clouds.”

“In doing so, IBM will support open source technology wherever it runs, allowing it to scale significantly within commercial settings around the world.”

The deal is anticipated to be completed during the second half of 2019.