IBM has an audit department (Enterprise Software Licensing) using Deloitte and KPMG as third-party auditors to verify the IBM software deployments. Red Hat developed in-house a license compliance department (SEAP) engaging with their customers regarding the correct application of subscriptions.
Red Hat will remain a distinct unit in IBM’s cloud and Cognitive Software segment to help Big Blue with growth, software revenue and their cloud business. Based on this, my guess is that, at first, SEAP will continue their path independently, as IBM’s compliance teams focus more on the on premises software than on the cloud business. Most IBM cloud products are not on the IBM compliance team’s major focus. At some point, if a more intensive integration between the two companies would take place, it might be that IBM will audit Red Hat customers. But by then, Red Hat customers are IBM customers anyway. An industry example is when Attachmate took over Novell, and both were later acquired by Microfocus. At this moment, Microfocus is a vendor with serious compliance activities for all the acquired products.
Software license compliance related, we’re already seeing some challenges at customers using cloud solutions:
- the CPU/Core count
- the unclarity that cloud providers is usually bringing
- the different licensing models of software vendors like Oracle or Microsoft, enforcing on their customers when licensing in the cloud
It looks like IBM and Red Hat will enter the same market and therefore the same challenges. If this will be a positive or negative impact for companies using IBM and Red Hat products remains to be seen. It surely is worth to watch the development and the possible software licensing impact.
The overall impact for both IBM and Red Hat customers is another crystal ball question. We see two major drivers for IBM to acquire Red Hat. First, IBM to become a real open source player in the market and second to not lose field in the cloud area. As IBM has a major presence in on premises environments, with Red Hat’s acquisition they can now move towards hybrid cloud. We have seen AWS and VMWare already taking on some serious partnerships in this field, enabling customers to connect existing on premises Datacenters running VMWare to AWS.