Cloud

Why IBM's purchase of Red Hat makes their future mostly cloudy

James Sanders takes a closer look at the motives behind IBM's move to join forces with Red Hat.

IBM's purchase of Red Hat is getting mixed reviews and the implications for the IT world remain to be seen. I talked with James Sanders about the acquisition and reaction to the news. The following is an edited transcript of our interview.

James: With tech acquisitions of this magnitude, there's always a little bit of an uneasy stomach going around, and right now everyone's just really glad that Red Hat wasn't acquired by Oracle. Oracle acquired Sun about a decade ago and basically squandered most of Sun's intellectual property and so, because of that, the prevailing issue right now is how is Red Hat going to be integrated into IBM?

There's a really distinct culture differences between the two. It's Red versus Blue, so with IBM, their CEO Ginni Rometty ended telecommuting last year, which goes against most of industry trends at the moment and that was seen as a really sort of backdoor layoff and because Red Hat relies so much on telecommute employees, how the two companies are going to really merge together is a little unclear.

Karen: Red Hat leaders were said to be very pleased with the deal and these are two companies that are familiar with one another.

See: Special report: The art of the hybrid cloud (free PDF) (TechProResearch)

James: Red Hat headquarters is in the Research Park in Virginia and IBM also has a campus really close to that. So these are companies that know each other well. They have existing integrations and Red Hat CEO Jim Whitehurst is going to report directly to IBM's CEO Ginni Rometty and Red Hat is going to continue to exist as the division of IBM's Hybrid Cloud Division.

Karen: And speaking of that, IBM execs, of course, saying that this deal will put them closer to being a leader when it comes to hybrid and multi-cloud adoption. What do you think about that?

James: IBM really needs Red Hat's talent pool. Most of Red Hat's business is open source, so in theory you could use all of this stuff without really needing to buy the company, but having Red Hat's talent pool will really enable them to integrate more of Red Hat's product portfolio into IBM's existing cloud offerings and the two together should be a really good option for companies who need hybrid and private cloud management.

Karen: IBM execs saying that they want to move swiftly with this, so we'll be watching this closely. And on TechRepublic, we have the top five things that IT leaders need to know about this deal, so be sure to check that out.

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About Karen Roby

Karen Roby is a reporter for TechRepublic. Prior to joining CBS Interactive, Karen worked as an anchor and reporter for several CBS affiliate stations owned by Hearst Communications and Gray Television.

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