IBM-Red Hat: Open Source Goes Blue

Known as a model that is based on open collaboration among communities of software developers and for generating revenue by support or services, open source has come a long way in recent years. But there are still obstacles that need to be overcome.

Organizations have struggled with the open source model because it is often hard to sell to their leadership, difficult for end users to accept, and it can be confusing to understand what is supported by the vendor. There is also the question of who owns what (i.e. data, code, etc.) that needs to be addressed.

IBM Acquires Red Hat

Last month IBM acquired Red Hat, the enterprise open source solutions provider, whose offerings include; high-performing and enterprise versions of Linux, cloud management, container, and Kubernetes technologies. This got me thinking about industry activities over the past couple of years. A shift has happened.

Open source is now focusing on large enterprise applications. Microsoft and AWS are the leaders in the public cloud and most of their cloud customers are migrating with open source, or developing with open source. Their customers even run large apps on open source in the cloud.

Open source and the cloud are part of almost every enterprise IT strategy today. Because of this, the colliding worlds of IBM and Red Hat align directly with the state of the industry. We expect open source to continue to give enterprises the opportunity to save money, be flexible, and remain innovative.

The IBM acquisition of Red Hat simply made sense from a business standpoint. It gives IBM the dominant open source offering, and Red Hat plays well in private, public and hybrid cloud environments.

This acquisition also gives IBM access to the open source community and developers. For instance, IBM now in-directly owns Ansible, which enables customers to point and click on the cloud IT infrastructure they’d like to use.

This means IBM can be more competitive because the can be included with Microsoft and AWS in the public cloud as well as expand their scope in the hybrid cloud environments. In addition, IBM’s containers can now be managed via open-source orchestration tools such as Kubernetes, fueling DevOps strategies and accelerating development lifecycles.

What it means for the industry

451 Research reached out to several hundred enterprise leaders to get their sentiments on the IBM – Red Hat deal. The overall response was neutral. We expect to learn more about the acquisition and what it means for the broader industry as the relationship matures.

From where we stand, and from our customers’ perspectives, we think this is a good move for the industry.

  • Managed Cloud, IT Market
  • IBM, Red Hat, Advisory Services, Open Source

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Mike Fitzgerald

Mike Fitzgerald

Chief Innovation Officer

IT-Security, Compliance, Cyber-Security

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