IBM, one of the leading technology companies in the world, acquired Raleigh-based Red Hat for $34 billion, in a surprise move that might be a game changer for the cloud business, and the way companies relate to data and digital transformation.
The ‘Cloud’ became one of the hottest topics in the world, leading the digital transformation race for companies all around the Globe. With this acquisition, IBM has staked its credibility to the hybrid cloud, becoming the biggest tech player to bet this big on the future of this technology.
With this acquisition, IBM hopes it will help clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management.
“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs. The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to the hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales”, said Ginni Rometty, IBM Chairman, President, and Chief Executive Officer.
IBM states that this prevents portability of data and applications across multiple clouds, data security in a multi-cloud environment and consistent cloud management.
Although it has around $20 billion dollars in revenues from cloud operations, IBM Cloud still lags behind Amazon’s Web Services, Google’s Cloud Platform or Microsoft’s Azure in the cloud sector. However, by leveraging Red Hat’s cloud computing ‘mythical’ capabilities, IBM has the potential to become the leader in hybrid cloud, as well as one of the top players in digital transformation and data management.
“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”, Rometty added.
IBM and Red Hat will continue to build and enhance Red Hat partnerships, including those with major cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud, Alibaba and more, in addition to the IBM Cloud.
Today, the digital race revolves around merging data from different environments under a unified view. According to IBM, there’s a $1 trillion opportunity in the hybrid cloud by 2020.
More than 80% of enterprise workload has yet to migrate to the cloud, held back by the proprietary nature of today’s cloud market, indicating there are massive amounts of data waiting to be processed.
The amplitude of this acquisition demonstrates the growth potential in our industry. It provides both a monumental opportunity for companies in the analytics world, but could also potentially create a new major player ‘on the block’.
Red Hat tackles areas such as infrastructure, integration, app dev, automation & management, and cloud.
If we take into consideration that the push for analytics technology is headed to be cloud first, it means that the way cloud is evolving and the direction it’s heading might impact our industry at its core.
By leveraging a hybrid cloud infrastructure, any workload such as deep learning or data migration can be handled faster. This might lead to a considerable decrease in both learning time for machine learning algorithms, and also data migration time. And for a digital enterprise, this translates into faster customer insights and a great efficiency.
Red Hat’s game is in the hybrid cloud, digitization, and digital transformation, with a lot of involvement in areas such as data migration and virtualization.
Let’s take for example Red Hat JBoss Data Virtualization product, a data supply and integration solution. Its purpose is to transform data locked in silos into unified information at business speed. In other words to easily accommodate new data sources and get close to real-time processing capabilities.
Red Hat’s take on data in the matter is that an organization should not treat data as a static warehouse, but rather as a dynamic supply chain. Red Hat can also provide a secure foundation for accessing multiple data sources and transitioning workloads across on-premise and cloud boundaries for companies who want to start their digital transformation.
IBM already has multiple analytics solutions, powered by AI, in their products arsenal. These could all be greatly extended by leveraging Red Hat’s cloud expertise and data migration tools.