IBM agreed to acquire all of the issued and outstanding common shares of Red Hat for $190.00 per share in cash, representing a total enterprise value of approximately $34 billion.
IBM and Red Hat said that as a combined company tthey will be strongly positioned to address the migration of all businesses to multi-cloud environments in an open and secure way. They estimate that 80% of business workloads have yet to move to the cloud. The merger will draw on their shared leadership in key technologies, such as Linux, containers, Kubernetes, multi-cloud management, and cloud management and automation
IBM was an early supporter of Linux, collaborating with Red Hat to help develop and grow enterprise-grade Linux and more recently to bring enterprise Kubernetes and hybrid cloud solutions to customers.
IBM said it will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem. It also promises 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.
“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. “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.
“Open source is the default choice for modern IT solutions, and I’m incredibly proud of the role Red Hat has played in making that a reality in the enterprise,” said Jim Whitehurst, President and CEO, Red Hat. “Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience – all while preserving our unique culture and unwavering commitment to open source innovation.”
Red Hat continues to grow at double digit clip – up 14% in Q2
Red Hat reported revenue of $823 million, up 14% in USD year-over-year, for its second quarter of fiscal year 2019 ended August 31, 2018. GAAP operating income for the quarter was $135 million. Non-GAAP operating income for the second quarter was $197 million, up 3% year-over-year. For the second quarter, GAAP operating margin was 16.4% and non-GAAP operating margin was 23.9%.
“Our second quarter results were consistent with our guidance and we drove 20% growth in total backlog to $3.3 billion,” said Eric Shander, Executive Vice President and Chief Financial Officer for Red Hat. “
- Subscription revenue from Infrastructure-related offerings for the quarter was $527 million, an increase of 8% in USD year-over-year, or 8% measured in constant currency.
- Subscription revenue from Application Development-related and other emerging technology offerings for the quarter was $196 million, an increase of 31% in USD year-over-year, or 31% measured in constant currency.
Red Hat OpenStack Platform 13 containerizes all OpenStack services
Red Hat OpenStack Platform 13, the newest version of Red Hat’s cloud Infrastructure-as-a-Service (IaaS) solution provides the capability to containerize all OpenStack services, including networking and storage, for the first time in a Red Hat OpenStack offering.
Some key features of Red Hat OpenStack Platform 13:
- Red Hat Ceph Storage for massively scalable, integrated storage, which enables organizations to more quickly provision hundreds of virtual machines from a single snapshot and build a fully-supported storage solution.
- Red Hat OpenShift Container Platform helps Red Hat OpenStack Platform 13 serve as an extensible platform for cloud-native workloads, providing a single architecture that brings the power of Linux containers on Kubernetes orchestration to scalable OpenStack infrastructure.
- Fast Forward upgrades — gives customers the option to stay on a faster upgrade path and receive new features from the upstream community every six months, or remain on a supported release for a longer period of time.
- Integration of security related projects such as OpenStack Barbican, providing tenant level lifecycle management of secrets, such as passwords, security certificates and keys. With the introduction of Barbican, encryption related use cases are now available, such as Cinder encrypted volume support, Glance image signing and Swift object encryption.
- Increased TLS coverage for internal communication flows for services such as VNC, OpenDaylight and Redis. The introduction of these features can enable customers to better comply with security standards such as FedRAMP, SecNumCloud, and other industry specific risk management frameworks.
IBM to adopt Red Hat OpenShift Container Platform for all its software
IBM will extend its private cloud platforms (IBM Cloud Private and IBM Cloud Private for Data) and its middleware offerings to Red Hat OpenShift Container Platform as Red Hat Certified Containers.
The agreement builds on IBM’s recent move to re-engineer its entire software portfolio with containers, including WebSphere, MQ Series and Db2.
The companies said there is growing consensus that container technologies are the best way to move applications across multiple IT footprints, from existing data centers to the public cloud and vice versa.
Under their agreement, enterprise customers will be able to more easily adopt a hybrid cloud strategy with IBM Cloud Private and Red Hat OpenShift serving as the common foundation. This will enable the IBM Cloud Private container platform to provide a single view of all enterprise data.
