1. 104
    IBM acquires RedHat linux redhat.com
    IBM to aquire Red Hat linux redhat.com
  1.  

  2. 29

    I have friends who work for Red Hat who are Not Happy about this.

    My speculation is that clients of Red Hat will see at most slow change. IBM’s not going to toss the cash cow RHEL, and the various cloud software offerings are what they apparently bought it for. However, internally I think we’ll see a massive diaspora of talent as Red Hat becomes IBM-ified. (All claims to the contrary from either company’s PR are of course to be ignored completely. They have to say that, to stave off the employee flight as long as possible.)

    Hot take: I wonder what this will mean for SystemD? ;)

    1. 8

      I’m unfamiliar with IBM’s Linux strategy; why would this mean anything wrt systemd specifically?

      1. 5

        Nothing, it’s just a play on the (IMHO very wrong) meme that systemd is only as successful as it is because it had RedHat backing.

        IBM probably doesn’t even know what systemd is on the “we’re buying a huge company for 20 billion” plane.

      2. 6

        Employees are rarely excited about being acquired, and let’s face it, history has shown that’s it’s been bad for both customers and employees unless the company being acquired is going out of business.

        1. 12

          Hot take: I wonder what this will mean for SystemD?

          Can it be a hot take if it’s not even a take? This is inquisitive (not argumentative), which is good for discussion but probably bad if your goal was to have an opinion.

          1. 3

            hot question

          2. 5

            I’m out of the loop. Could you explain the systemd comment?

            1. 14

              systemd was originally written by Lennart Poettering and Kay Sievers who work at Red Hat.

              1. 3

                Is it still maintained by them as part of their jobs at Red Hat?

                1. 5

                  Yes

                  1. 3

                    Lennart Poettering on Twitter this morning (:

                    As you all know we never have been fans of portability. It will come at no surprise that in light of the recent developments we will discontinue all non-S/390 ports of systemd very soon now. Please make sure to upgrade to an S/390 system soon. Thank you for understanding.

                    1. 1

                      Even POWER? ;)

            2. 3

              Hot take: I wonder what this will mean for SystemD? ;)

              I’m pretty sure Facebook will keep developing it if nobody else does:

              https://media.ccc.de/v/ASG2018-192-state_of_systemd_facebook

              (disclaimer: I work there, though not on the team that works most with systemd – and this is of course my personal opinion)

            3. 23

              This url uncovered a small bug in Lobsters, if anyone would like to pitch in.

              1. 13

                That’s bad. So much for my hopes of Red Hat being an independent check against these big companies. If it’s actually $34 billion, then this tops WhatsApp as biggest acquisition if memory serves right. Makes sense on IBM’s part since they mostly be the farm on Linux on top of being major contributor to kernel.

                1. 3

                  Do you think rhel has acted as competition to IBM in the past decade?

                  1. 9

                    IBM is a patent-trolling firm that turns everything they acquire into crap vs what they were. I imagine them owning Red Hat’s IP early on might have made Linux worse off. Instead, they developed independently in goals and style then interdependently in supporting the kernel. Now, that large, independent party is controlled by IBM.

                    I’d rather there be as large a number of companies as possible contributing to and/or influencing future of Linux.

                    1. 9

                      IBM has had a big influence on RHEL since early days. They started steering kernel development and taking advantage of Linux platform very early on thanks to some very smart executives. The Linux strategy enabled IBM to outsource OS development and create essentially a trust that broke the MSOFT monopoly without much investment and outside the imagination of anti-trust enforcement. Think about if, in 1998, IBM/Oracle/Novell/Intel had formed an OS company - it would have been the immediate target of an anti-trust action.

                      1. 5

                        Everything you say makes sense. The outsourcing OS development note is something I’ve always pointed out. They’re not fully freeloading off Linux but get way more value out than they put in. Smart strategy for them. Then, Novell grabbed Suse. The rest just build on top of the big ones with Shuttleworth’s Canonical being the outlier: a straight-up loss to make a desktop happen.

                        1. 4

                          They’re not fully freeloading off Linux but get way more value out than they put in.

                          Doesn’t everyone? :) Certainly true of myself.

                          1. 2

                            (Glances at laptop and wallet.)

                            Yeah…

                    2. 4

                      Absolutely. I don’t have any data but would bet that RHEL is easily the biggest competitor to IBM’s mainframe/enterprise computing stuff.

                      1. 3

                        IBM does a huge Linux business that relies on RHEL. You could view RHEL as a low cost vendor to IBM.

                      2. 3

                        Without a doubt. In big enterprise businesses like finance where downtime is measured in the millions of dollars per minute, you shell out big money for IBM hardware and IBM software and IBM support contracts because you know with 100% certainty that what you get is going to work as well as they claim. If it doesn’t, it’s escalated until it does*.

                        All of that is well and good until one day someone notices that the company is shelling out way too much money annually on support for an aging Power server just to run some in-house Java web apps that would be just fine on a $50k Dell cluster running Linux. When you run an enterprise you always buy support and Red Hat is the industry standard in Linux support. So Red Hat really made a lot of headway into the lower to middle-end product space in enterprise datacenters, a space that IBM tried very hard to convince its customers didn’t actually exist. Until today.

                        * Of course, this is usually more true for IBM’s in-house stuff, there are a lot of cases where they’ve bought another company for their successful product, slap the IBM logo on it, and then let it languish.

                        1. 3

                          20 years out of date. IBM biggest revenue division is services/cloud. The mainframe business is profitable but shrinking. Linux is raw material, not competition.

                      3. 1

                        What do you mean by, “this tops WhatsApp as biggest acquisition”? WhatsApp was acquired by Facebook. And neither are even in the ballpark of the biggest acquisitions on our public markets.

                        Is it that this is the biggest “tech company” acquisition, for some definition of “tech company”? That might be. It’s interesting because it’s probably only a company like IBM that could afford – and even make sense of – a $20B market cap enterprise open source company like RedHat. But more than anything, IMO, it shows that this particular segment of the public tech market is running on a lot of smoke and mirrors. I am a multi-decade techie, and I can’t even tell you what IBM and RedHat truly do, other than sell overpriced enterprise support contracts for legacy systems to enterprises. No techie I know would choose either of them as “growth” opportunities on the fundamentals of innovation or new products; instead, your excitement about their businesses comes down to what extent you think Fortune 1000 companies will feel obligated to pay them an IT support tax, of sorts. Meanwhile, for IBM, which has been operating on smoke and mirrors for a long time now (especially “Watson”), this is just a multi-billion dollar enterprise tech confusion where it can continue to hide losses and buy time for a massive speculative innovation that will never come.

                        1. 4

                          Is it that this is the biggest “tech company” acquisition

                          That’s what I meant. The news wave over Facebook dropping $16 billion on WhatsApp talked about it being the biggest or one of the biggest. This justifiably topped that. Remember this is a company that sells hybrid of FOSS and proprietary software, though. Most big acquisitions aren’t for FOSS-oriented companies. It’s both a nice precedent for valuing others and one that might not be repeated given Red Hat itself might not be repeated. To put the deal size into perspective, HP acquired Compaq with its servers, CPU’s, and OS’s for $25 billion.

                          “But more than anything, IMO, it shows that this particular segment of the public tech market is running on a lot of smoke and mirrors. “

                          It often is. In IBM’s case, they’re a large company that doesn’t produce this sort of thing on their own. They have to acquire such innovations for ridiculously-large amounts. It’s a problem with their culture mostly but some is inevitable. This one is different, though. Like in vyodaiken and I’s conversation, these two have been pretty close for some time with IBM betting the farm on Linux for most servers and service revenue. Although it was outsourced (an externality), it looks like they’re internalizing it since it’s so mission-critical. Ensuring tens of billions in Linux-derived revenue continues to flow for years… the total being a humongous number… might be worth $20 billion one-time. Then they also get new tie-in products like with other acquisitions. I think it’s mostly them addressing a core dependency, though.

                      4. 12

                        I grieve the most that this will really weaken the argument for commercial free software. We could always say, look at Red Hat, they don’t sell a drop of non-free software. It’s possible to be free and commercial!

                        I doubt Red Hat will continue to operate this way, especially if they are receiving money from IBM’s other ventures. I hope there’s room for another Red Hat in this world.

                        1. 4

                          I haven’t really been quite sure why I’m saddened by the acquisition, but this really gets to it. When I think about “could I turn this open source project into a business?” the model that comes to mind is Red Hat’s. It really was something different – a pretty defiant statement about the viability of open source software as a business.

                          1. 3

                            Not only could you turn it into a business, you might even be given 20 billion for it 😀

                        2. 8

                          IBM TO ACQUIRE RED HAT, COMPLETELY CHANGING THE CLOUD LANDSCAPE AND BECOMING WORLD’S #1 HYBRID CLOUD PROVIDER

                          Most significant tech acquisition of 2018 will unlock true value of cloud for business

                          “The acquisition of Red Hat is a game-changer. It changes everything about the cloud market”

                          I don’t read a lot of these Enterprise Software(tm) press releases – is this level of hyperbole normal?

                          1. 9

                            Yes. They’re just drumming up press for whatever cloud hosting things they want to do. Disregard it and press F12 to pay respects, or however you want to mourn :-(

                            Rest in peace, RHEL.

                            1. 9

                              I don’t read a lot of these Enterprise Software(tm) press releases

                              I don’t either but man am I excited that the acquisition will be free cash flow and gross margin accretive within 12 months!!!!!!! I normally have to wait years to be gross margin accretive.

                            2. 7

                              I was curious about how this would work for a publicly traded company and this stack overflow answer is good:

                              https://money.stackexchange.com/a/21290

                              Basically, if one entity has more than 51% of your shares, look out!

                              1. 7

                                Is the opportunity for IBM to go deep on RISC and starting to disrupt Intel in the server space?

                                1. 8

                                  They’ve been deep on RISC via POWER. Didnt work out disrupting Intel either on low or high ends. They’re trying again with OpenPOWER. Raptor already deployed workstations and servers for it. We’ll see what happens.

                                2. 7

                                  Does anyone (@whbboyd?) have insights/speculation about what this will mean for Fedora?

                                  1. 4

                                    Speculation: number of RH-staffers contributing trends downwards in the coming years. What other companies would pay people to work on Fedora? Oracle?

                                    Fedora will survive, but there will definitely be a change in the community.

                                    Hopefully this doesn’t impact the merge of Atomic and CoreOS too much; I suspect that the long-term future of Fedora will be tied to the success of that offering.

                                    1. 2

                                      I reckon of those people may continue that work in their “spare time” but you’re right that this will long-term change Fedora.

                                  2. 5

                                    Just a quick reminder, that Red Hat is not only Linux but lots of Java related stuff too.

                                    1. 3

                                      …which is direct competitor to IBM’s WebSphere suite.

                                    2. 4

                                      This acquisition brings together the best-in-class hybrid cloud providers and will enable companies to securely move all business applications to the cloud. Companies today are already using multiple clouds. However, research shows that 80 percent of business workloads have yet to move to the cloud, held back by the proprietary nature of today’s cloud market. This prevents portability of data and applications across multiple clouds, data security in a multi-cloud environment and consistent cloud management.

                                      Having read this paragraph the word “cloud” no longer sounds like a real word, and I suspect it really isn’t one.

                                      1. 4

                                        It’s a rebranding of time-sharing with a few changes.

                                        1. 4

                                          Well, more like VM/370 combining properties of timesharing with virtualization.

                                        2. 3

                                          It’s great with a good old cloud-to-butt extension :D

                                        3. 3

                                          I really hope Fedora remains the way it is. Its the best distro around imo

                                          1. 3

                                            I think IBM yearns for the mainframe times again, and there are honestly very many parallels between old-school mainframe stuff and modern cloud. If IBM can be the single provider of every piece of the value chain (except for hardware for now).

                                            With RedHat, they control the OS, the virtualization suite, and they have the large enterprise customers. This is for sure IBM wanting things to be the way they were years past.

                                            1. 3

                                              systemd for zOS!

                                              1. 4

                                                I don’t use many Red Hat products, but this still makes me feel uneasy.

                                                1. 2

                                                  strange times, now ansible is an IBM product

                                                  1. 2

                                                    Time to come to the salt side?

                                                    1. 1

                                                      maybe, but not for the owner

                                                      ansible is bad at so many levels (if you use it for more than 1000 hosts)

                                                  2. 2

                                                    I have a friend that works at IBM. She’s said that her team uses Red Hat systems on a daily basis and it would be counter intuitive to ruin it.

                                                    I’m skeptical though.

                                                    1. 7

                                                      Individual rationality often appears to have no bearing on corporate level actions at all.

                                                      1. 1

                                                        Exactly, that’s what I said to her.

                                                        1. 1

                                                          But bringing important parts of your supply chain in house does make sense, and you don’t destroy your supplier when you do that

                                                        2. 2

                                                          It’s always counter intuitive to ruin things. But the innovation doesn’t stop.

                                                        3. 3

                                                          If I were working at Red Hat, I would resign right now. Don’t get me wrong, many acquisitions go well. But I wouldn’t work for a company that helped the holocaust happen.

                                                          1. 1

                                                            I don’t think it will mean much in the enterprise space, but I do wonder about the longevity of the more consumer focused projects that are under the Red Hat umbrella. Namely Fedora. Hopefully IBM will be hands off where appropriate. Time will tell…

                                                            1. 1

                                                              Apple’s MacOS, Microsoft’s Windows, IBM/RedHat’s Linux? I hope not!

                                                              Fortunately, all the sources are open besides the blobs. As long as the community do not consider Linux as belonging to IBM/RedHat, it will remain free.

                                                              1. 3

                                                                it will remain free.

                                                                Free and un-funded.

                                                              2. 0

                                                                RedHat with become agile =)

                                                                Seriously, RIP RH. Sorry to witness another nice company being swallowed by an agile company like IBM.

                                                                Stories with similar links:

                                                                1. IBM to aquire Red Hat via zge 24 days ago | 2 points | no comments