IBM's Acquisition of Red Hat Closes | Hacker News Reader

IBM's Acquisition of Red Hat Closes

newsroom.ibm.com

85 pointsjwildeboer27 comments

[dupe] https://news.ycombinator.com/item?id=20391180

“- IBM preserves Red Hat's independence and neutrality; Red Hat will strengthen its existing partnerships to give customers freedom, choice and flexibility”

Already now I can mention one bank where I work where RH and IBM account teams are fighting tooth and nail over revenue. It won’t end well.

Interesting. I think I understand: The account teams at the bank are now trying ensure they get the mainstream of revenue from IBM (+RH) (because they are the same entity financially?). So essentially, the "independence" is not "real" when money comes into play?

What do you mean by "it won't end well"? Seems like it's going to end up pretty well for your bank, given that the two teams are fighting for your business. Let the best team win?

It may work out for the bank in the short term. But saying Redhat is a separate entity within IBM won't last long if they're driving down their own revenue by fighting each other. IBM leadership holds all the cards now and all the Redhat execs are in a glass house facade. What IBM wants is revenue from the acquisition, not confusion and price wars. There is no best team, there is only one team now. And that team has one goal above all else: show how this acquisition was brilliant and the wall street numbers to prove it.

Remember that what IBM paid for Redhat, based on the fact they had to finance a big chunk of that liquid cost, has interest tied to it. That interest cancels out the revenue Redhat will bring to the plate. So... I'll say it now for those who don't want to do the math: your Redhat licensing is going up soon. Better have locked in those 3 year deals prior to today.

My understanding of things like this is, until the day the acquisition closes, the teams should be fighting tooth and nail against each other. Since that was very recent closure, this is normal.

OTOH, once the acquisition closes, the businesses are still run independently until "business day 1", though they can cooperate on deals. Likely if they are fighting after closure, its over the integration and account/revenue control. This should be resolved by management, and more often than not, as an exec you have to lay down the law on this. Not everyone will be happy, and even the customers eyebrows will be raised sometimes.

RH likely has better relationships with various customers (finserv, etc.) and likely should control these accounts. However, much of this winds up in internal political manuevering.

In my dreams Red Hat's culture overtakes IBM's and this becomes a successful reverse takeover, but this is only a dream.

> In my dreams Red Hat's culture overtakes IBM's and this becomes a successful reverse takeover, but this is only a dream.

We in Houston hoped that this would happen when United Airlines acquired our hometown Continental Airlines, with Continental's CEO becoming CEO of the combined airline. Let's just say we weren't entirely thrilled with how it actually worked out.

There was an old joke: "What do you get if IBM merges with Apple?" Answer: "IBM".

(Though these days, Apple could buy IBM..)

They could buy IBM almost 2x over with their cash on hand.

Maybe if Whitehurst becomes President of IBM?

Currently, Rometty is Chairman, President, and CEO. Best practice is to split the Chairman and President positions.

I really hope IBM can keep their fingers out of Red Hat, if not it does not matter how many promises they make, they will run it into the ground. If they actually manage to do so, and let their cloud business grow without old school IBM values etc; they actually have a chance to grab a big piece of the cloud business.

No company can keep that promise. The desire to meddle is irresistible, especially if they see the "independent" company go in a direction the mother company doesn't like.

The only place where this seemed to work reasonably well for a while was YouTube & Google, but even that was ruined the moment Google decided it needs "unified accounts" and to insert the Google+ social network into YouTube.

> The desire to meddle is irresistible, especially if they see the "independent" company go in a direction the mother company doesn't like.

Yep, often times the upper management thinks "wow what a successful company", then sees why said company is so successful after the merger and thinks "we're the best, we gotta make them just like us and they'll be even more successful", and the meddling begins.

It also helps management get bonuses for helping "integrate" the acquired company with the parent one, helping "boost efficiency" and "reducing overhead" or some other way of glossing over "we destroyed what made them attractive and successful".

Has Microsoft noticeably meddled with GitHub yet?

They made paid GitHub account benefits available for free.

They have 34 Billion reasons to screw up RH. I hope it doesn’t happen.

    > old school IBM values

I think I prefer "old school IBM values" to whatever they've morphed into in the last ~20 years. They got a bunch of bad press lately for mass terminating, in an obviously shameless manner, "older" employees.

“Old school IBM values” presumably refers to their time in 1960s-1980s when they were real innovators and inventors. Now they’re just a consultancy shop.

> I really hope IBM can keep their fingers out of Red Hat

They won't, they've never let any acquisition be "independent" for any real length of time.

IBM was a true pioneer in the bullshit AI industrial complex with all that Watson nonsense.

Many companies seem to have copied that strategy of just pretending they are sprinkling some AI fairy dust on whatever and that it's better somehow, while actually doing zero work.

Outside of that accomplishment I have no idea what IBM has been doing since the 90s.

Understandable, as IBM has always targeted the enterprise solutions market. Having control over (I think still?) the most popular enterprise linux installation is a nice add to their business.

It opens greater flexibility for their servers, as they have 'ownership' of the distro now. Possible bid for a speed benchmark as a selling point? Some of the giants out there are going to be hard to beat for that though...

I don't know that they are doing this specifically for the cloud market.

Hopefully this helps demonstrate to VCs the strong viability of red hat's model, which triggers more investment and creation of competitors and companies to fill the void after red hat is bled dry and destroyed by IBM.

How realistic is the fear that Big Blue is going to screw up Red Hat?

Old Joke: What do you get when you cross IBM with [Insert company/product here]?

Answer: IBM.

I'm not sure if IBM acquires good products and makes them shitty or just makes shitty products from the ground up. I can't say how realistic it is they'll screw up Red Hat, but every IBM product that I've used in the last few years has been absolutely atrocious. At this point I just assume everything they touch turns to shit unless shown otherwise.

I hope that I am proven wrong since I actually quite like the RHEL / CentOS / Fedora ecosystem.

R.I.P. Red Hat

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