Logo of Phnom Penh Post newspaper Phnom Penh Post - IBM inks history’s largest software deal

IBM inks history’s largest software deal

Content image - Phnom Penh Post
A logo of the software company Red Hat. AFP

IBM inks history’s largest software deal

IBM said on Sunday it has reached a deal to buy open source software company Red Hat for $34 billion, among the biggest tech mergers in history which the computing giant said would enhance its cloud offerings.

If approved it will be the third biggest tech merger in history, according to business news site CNBC. Red Hat said it was the biggest involving a software company.

The deal will see IBM acquire all of the issued and outstanding common shares of Red Hat for $190 per share in cash, more than $70 above the $116.68 at which Red Hat was trading on close of business on Friday.

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM’s chairman, president and CEO.

“IBM will become the world’s number one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

Cloud computing refers to the delivery of computing services, including storage and software, over the internet to achieve economies of scale.

Hybrid cloud relates to the linking of public and private cloud platforms.

IBM’s Rometty added that most companies are currently being held back in their cloud transformation due to closed platforms.

Once known primarily for its computer hardware, IBM has made cloud computing a priority in its growth strategy, like Amazon and Microsoft.

Over the past few years, the company has been refocusing on markets such as analytics, mobile and security, grouped under the banner of “strategic imperatives” and designed to offset the decline of its traditional activities.
These now represent about half of its turnover.

Adhering to the adage of not fixing what’s not broken, Red Hat will continue to operate as a separate unit.

Red Hat will be led by its president and CEO Jim Whitehurst and its current management team. Whitehurst also will join IBM’s senior management team and report to Rometty.

‘We made history’

“Today is a banner day for open source,” said Paul Cormier, Red Hat’s vice president and president of products and technologies. “The largest software transaction in history and it’s an open source company. Let that sink in for a minute. We just made history.”

Founded in 1993, Red Hat launched its famous version of Linux OS a year later, becoming a pioneering proponent of the open source movement that arose to counter giants like Microsoft whose models were based on keeping their source code secret.

The Raleigh, North Carolina based company is today present in 35 countries and employs some 12,000 people, and is one of the best-known open-source players whose customers pay for tailor-made solutions.

The company achieved a net profit of $259 million this year on a turnover of $2.9 billion, up 21 per cent compared to last year.

MOST VIEWED

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • PM takes time to meet, greet Cambodians living in the US

    After landing in the US ahead of the ASEAN-US Special Summit, Prime Minister Hun Sen was received by over 1,000 Cambodian-Americans including political analysts who welcomed him with greetings, fist bumps and selfies. Hun Sen also met with analyst Mak Hoeun, who had allegedly spoken ill

  • PM reflects on shoe throwing: Free speech or act of violence?

    Prime Minister Hun Sen on May 17 questioned whether a man who threw a shoe at him while he was in the US was exercising freedom of expression or if it was an act of hostility. Hun Sen was referring to an incident last week when

  • Chinese tourists 2.0 – Coming anytime soon?

    Regional tourism is grappling with the absence of the prolific travellers and big spenders – the Chinese tourists. Cambodia, which has welcomed over two million Chinese tourists before Covid-19, is reeling from the economic loss despite being the first to fully open last November ‘To put

  • Prime Minister Hun Sen warmly welcomed by president Biden

    Prime Minister Hun Sen, as ASEAN chair, and other ASEAN leaders were warmly welcomed by US president Joe Biden as the ASEAN-US summit May 12-13 kicked off today in Washington. “This evening, I welcomed ASEAN leaders to the White House for the first time in

  • Third Makro outlet planned for capital’s Chroy Changvar

    Makro (Cambodia) Co Ltd is set to invest $12.7 million in its third Cambodian outlet, this time in northeast Phnom Penh’s Chroy Changvar district, an area dotted with high-end residential developments, as shopping behaviours continue to evolve in tandem with economic growth. The Cambodian Investment