Red Hat is now officially part of IBM. The acquisition finally closed overnight after getting the green light from EU regulators at the end of June.
IBM announced its intention to buy Red Hat in October 2018 in an all cash deal worth US $34 billion, making it one of the largest ever tech acquisitions.
Announcing the completion of the deal, IBM pledged to preserve Red Hat’s independence, neutrality and “unwavering commitment to open source”.
“Joining forces with IBM gives Red Hat the opportunity to bring more open source innovation to an even broader range of organisations and will enable us to scale to meet the need for hybrid cloud solutions that deliver true choice and agility,” said Jim Whitehurst, president and CEO, Red Hat.
Keeping the brand intact, Red Hat will operate as a distinct unit within IBM and will be reported as part of IBM’s Cloud and Cognitive Software segment. The unit will continue to be led by Whitehurst and the current management team and its headquarters remain in Raleigh, North Carolina.
Reporting to IBM CEO Ginny Rometty, Whitehurst will join IBM’s senior management team.
IBM said the acquisition redefines the cloud market for business, and together the combined businesses will deliver next-generation hybrid multicloud platform.
Based on open source technologies, such as Linux and Kubernetes, the platform will allow businesses to securely deploy, run and manage data and applications on-premises and on private and multiple public clouds.
“Businesses are starting the next chapter of their digital reinventions, modernising infrastructure and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors,” said Ginni Rometty, IBM chairman, president and CEO.
“They need open, flexible technology to manage these hybrid multicloud environments. And they need partners they can trust to manage and secure these systems. IBM and Red Hat are uniquely suited to meet these needs. As the leading hybrid cloud provider, we will help clients forge the technology foundations of their business for decades to come.”
Cloud revenue now accounts for a quarter of IBM’s total revenue, up from 4 per cent in 2013. This growth comes via a comprehensive range of as-a-service offerings and software, services and hardware that enable IBM to advise, build, move and manage cloud solutions across public, private and on-premises environments for customers.
IBM cloud revenue for the 12-month period through the first quarter of this year grew to over $19 billion. The Red Hat acquisition is expected to contribute approximately two points of compound annual revenue growth to IBM over a five-year period, the company said.