IBM buy Red Hat, the top Linux site, $ 34 million – New York Times

IBM buy Red Hat, the top Linux site, $ 34 million – New York Times

outubro 30, 2018 0 Por admin

IBM is taking a big step to bring more software developers under its wing by acquiring Red Hat, the largest distributor of popular open-source operating system Linux, $ 34 million.

The purchase was announced on the afternoon of Sunday, is the latest step competitive between the big business-software companies seeking an advantage in the fast-growing market for cloud computing.

In June, Microsoft acquired GitHub, a major code-sharing platform for software developers, for $ 7.5 million.

With the agreement that Red Hat, IBM seeks to position itself as a kind of corporate “Switzerland” in cloud computing — a reliable partner of companies that are moving to the cloud, but for fear of becoming dependent on one major cloud material.

In the cloud model, software developers to write applications that run remotely from the data centers. The advantage can be lower costs, faster software development business.

IBM is the champion of a hybrid approach to cloud computing. This means that some important data and run applications on cloud technology within the company data centers, while other computing tasks operate on the drag of technology companies.

Major third-party cloud platforms are Amazon, Microsoft and Google. Companies complain that these cloud vendors include proprietary technology that make it difficult to move from one cloud to another.

IBM cloud strategy to provide both hardware and software companies to build private clouds, and also third-party public cloud offering.

IBM, analysts say, do not compete on a large scale with so-called hyperscale cloud companies — Amazon, Microsoft and Google — that tap the deep coffers to spend several billion dollars annually to build more giant data centers.

But IBM and Red Hat say they are in a good position to be leaders in helping companies move to the cloud without getting locked in the technology of the internet giant.

The two companies say they plan to offer the technology to connect the company’s in-house cloud multiple third-party clouds.

“Companies are moving to the cloud, but 80 percent of them are not there yet,” said Arvind Krishna, IBM vice president in charge of hybrid cloud offerings. “We can provide much easier to manage and make get a special drawing and a novel multiple public clouds.”

Red Hat, founded in 1993 and headquartered in Raleigh, nc, has built a profitable business, with $ 2.4 million in revenue in the last year about open source software, mainly Linux. Open source code is distributed free of charge, and can be adjusted by remote programmers under certain rules.

Red Hat has expanded and making money by providing technical support, quality control, software tools, product collaboration, and subscription fees.

Linux is the preferred operating system for cloud computing. “Most businesses a hybrid cloud is the only practical way to the cloud,” said Paul Cormier, president of products and technologies at Red Hat.

Association with IBM, Mr. Cormier said to accelerate Red Hat’s progress in the enterprise market cloud attacks.

Red Hat will join IBM’s Cloud team, the two companies said in a joint statement, but as a “premium module” to maintain its independence and impartiality in open source.

IBM’s offer of $ 190 per share in cash, more than 60 percent sign on Red Hat’s closing price on Friday, $116.68 share.

Exorbitant price, said a person close to the deal, who asked not to be identified because he was not authorized to speak publicly, is justified by Red Hat’s strong growth in cash flow.

IBM, he said, is paying about 30 times Red Hat free cash flow, lower than average recent software company acquisitions, you will help in the lifting of the IBM growth of the cash flow.

The boards of both companies approved the deal, the sale is expected to close in the second half of next year. Goldman Sachs and JP Morgan Chase and Lazard advised IBM on the deal, Guggenheim Partners and Morgan Stanley advised Red Hat.