Comment by digi59404 | Hacker News Reader

Comment by digi59404 | Hacker News Reader

Microsoft won’t buy Canonical. Folks are making these predictions without a root cause analysis as to what the companies do well. IBM bought Red Hat because IBM bet wrong in the cloud race and is/was way behind. Red Hat consolidated companies beneath them and worked hard to expand their cloud offerings. Right now on OpenShift along the US Gov pays them $100MM a year. Just OpenShift.

Add to this banks, grocery stores, and airlines are moving off mainframes and to the cloud - and choosing OpenShift. IBM was starting to get eaten by Red Hat. Not to mention IBM is on the cusp of a major leadership change, and needs fresh cloud leaders to lead IBM into the next decades.

These are the reasons IBM bought Red Hat. Because IBM has lost its way. Red Hat had the most to offer.

Canonical doesn’t have much to offer. Few people are paying for Ubuntu. Yeah yeah it’s popular in Docker images, yeah yeah it’s a popular desktop distro. But so what? OpenStack is shrinking (SUSE abandoned it for Kubernetes) and Ubuntu has bet their farm on OpenStack. They don’t have much in the way of Kubernetes. On OpenStack Red Hat has most of the customers. Canonical has almost nothing to offer in terms of being bought out. They have very few items that produce profit. They made a huge (and flawed) bet on mobile and failed. Ubuntu doesn’t have strong leadership and doesn’t have strong clients - In fact I’ve been a consultant for 5 years now bouncing between companies every few weeks. I have YET to run into a Canonical client.

This is why no one will buy Canonical. SUSE? Well we’ll see.

Reportedly MS did consider buying Red Hat but backed out because of anti-trust concerns.

> "Microsoft, which, according to one source, is referenced throughout the proxy statement as 'Party A,' first expressed interest in Red Hat back in March. But Microsoft dropped out of the running on October 10, according to the proxy, 'citing concerns about securing regulatory approvals of a strategic transaction in the US and Europe.'"

Google was also considering it

> "Google, which one source said was 'Party B,' met with Red Hat in the spring of 2018 to discuss partnerships. As a deal with IBM got closer, Google continued to move forward with the sale process, but stopped short of making an offer. Though Google's former Cloud CEO Diane Greene spent a lot of time with Red Hat ahead of its sale, she struggled to get support from the company on her large mergers-and-acquisitions aspirations, according to one source. So on October 20, Google officially declined to submit a proposal and instead asked if Red Hat would explore a commercial partnership and a minority equity investment from Google."

Block javascript if you want to read the article:

https://www.businessinsider.com/red-hat-deal-talks-with-amaz...

Yeah I was in RH during this and saw a lot of the internal talks. Red Hat had a reason to be bought.

Canonical... Doesn't.

IBM was profitable but stagnating, they were already a major reseller of Red Hat, who were growing rapidly, had good tech, lots of potential to grow more, and was already big enough that they may be able to change IBMs numbers by enough to not just get lost in the noise (if you make $8.5+ billion profit changing that by $100million isn't going to get wall street excited)

Someone like MS would buy Canonical for completely different reasons, they're not big enough to effect Microsofts profits in any way, they dont have any really interesting tech, but they do have the Ubuntu brand and control of one of the really big linux distros (the biggest on the desktop) so there might be value in Azure being able to brand itself as the home of Ubuntu ("it runs perfectly on our cloud becuase we write it that way"). To be honest though I dont see that as a big enough thing to make MS risk their reputation as a good place to run Red Hat and openshift. The only other reason to buy Ubuntu would be to kill it, and the political ramifications of that to the open source friendly reputation they've worked hard to build would be bad.

"Few people are paying for Ubuntu"

I have never understood their paid support tier pricing model. They should have offered a low cost email only support, say with a 24 or 48 hour turn around policy and could have gain many enthusiasts and small companies some of which would have transfered to bigger contract.

> Canonical doesn’t have much to offer

The actually have a lot of stuff: LXC/LXD, MaaS, Juju/Charms and MicroK8S. These are all solutions to real problems but maybe they are lacking marketing because they are not well known.

No one is paying for those. LXC/LXD has plenty of other groups to pay. MaaS, the same. Juju/Charms are not a widespread solution, and MicroK8S is way too late.

Ubuntu as a whole has nothing people want to pay for.

IBM still earns a lot of money with their mainframe and AIX business.

Yes, But shrinking. The concern is not necessarily now - But in a decade.

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