Considered to be the largest acquisition of a software company, IBM has just bought open source and Linux pioneering company Red Hat for US $35 billion. This deal will result in a merger propels IBM as an enterprise cloud computing provider. Now facing off against Amazon's AWS and Microsoft's Azure Cloud, IBM says that its services will allow more businesses to shift their operations online, and that the proprietary nature of existing cloud systems means that it’s harder to move and secure data from system to system.
Red Hat president and CEO Jim Whitehurst sharedthe following, "we have barely scratched the surface of the opportunity that is ahead of us. Open source is the future of enterprise IT. We believe our total addressable market to be $73 billion by 2021. If software is eating the world - and with digital transformation occurring across industries, it truly is - open source is the key ingredient. Powered by IBM, we can dramatically scale and accelerate what we are doing today. Imagine Red Hat with greater resources to grow into the opportunity ahead of us."
IBM Chairman, President and CEO Ginni Rometty added that “most companies today are only 20 percent along their cloud journey, renting [computer] power to cut costs. The next 80 percent is about unlocking real business value and driving growth.”
IBM's Red Hat acquisition is considered the third largest behind the $67 billion merger between Dell and EMC in 2016 and JDS Uniphase's $41 billion acquisition of optical-component supplier SDL in 2000.
Source: IBM, CNBC