Shulou(Shulou.com)06/02 Report--

IBM announced yesterday that the two sides had reached an agreement to buy Red Hat for $34 billion in cash. This is the most important milestone in the history of IT development and can have a far-reaching impact on the future.

Combing through carefully, it is not surprising that IBM bought Red Hat; strange is, why the buyer is "IBM", not "Google"?

The acquisition of Red Hat is an inevitable result.

In fact, the journey of Red Hat to be acquired is the inevitable result of the development of the enterprise. Why do you say that?

First of all, Red Hat owns the largest IT asset in the cloud era, builds an IT platform beloved by all developers, and controls almost all enterprise CIO resources. From classic Red Hat Enterprise Linux (RHEL) and JBoss to OpenShift (~ Kubernetes) and Ansible that meet the latest needs of enterprises, Red Hat plays the most important role in enterprise IT assets and can help enterprises move smoothly from the traditional IT era to the public cloud era. Although the public cloud is the final journey of cloud development, it is not worth much if there is no specific path. As a result, Red Hat is more like the most important gateway to the journey to the public cloud.

Secondly, the open source journey of Red Hat has entered a bottleneck period. Probably in the late 1990s and early 20th century, Red Hat created an open source ecological model. In this mode, any enterprise can use free, open source code. Through these free resources, Red Hat can build the best solution to provide services to users. Although Red Hat's performance soared in five years, from $1 billion in revenue to $3 billion, there is not much room for growth. And this kind of income is not the fastest. Compared with similar company VMware, VMware's revenue is three times the size of Red Hat and takes less time.

Most importantly, with the advent of public clouds, the pure open source model has become difficult to sustain. Because many players in the cloud computing market are improving the quality of service, such as AWS, Microsoft and Google, they have been able to provide software infrastructure similar to Red Hat at a lower cost. From the user's point of view, the goal of enterprises is not to turn their software into assets, but to migrate more computing resources to the cloud. If enterprises do not rely too much on Linux and middleware, the future growth of Red Hat is very limited. Therefore, for a long time, most companies have chosen an open business model that combines open source with proprietary software. In the process, only two companies have retained a pure open source business model. Besides Red Hat, the other one is Hortonworks.

In the era of surging winds and clouds, the scale of cloud providers is getting larger and larger, monetizing software assets, which is a new competitive situation. However, it must be dealt with properly, otherwise it will pose a fatal risk. Therefore, Red Hat chose to sell itself to the cloud giant service provider. But ten thousand people didn't expect that the receiver was IBM.

Unexpected "buyer"

IBM spent $34 billion to buy Red Hat, which is tantamount to gambling his life and fortune.

When cloud becomes the ultimate development direction of enterprise business, how to build a top-up cloud environment is very important. IBM has enterprise-class service experience, but has failed to build an open environment for developer loyalty. As a result, IBM, like Oracle, is in the second tier, behind AWS, Microsoft and Google.

Through this acquisition, Red Hat will provide IBM with a much-needed, favorite, modern software portfolio for developers. IBM can provide Red Hat with a larger platform to make it more strategically influential.

So will this acquisition bring value to the new IBM? The answer is yes. If Red Hat can make IBM more important in the public cloud, then the $34 billion will be well spent, and IBM will become a transformative player in the hybrid cloud. In the cloud age, which is monopolized by oligarchs, you either have everything or nothing. Therefore, an one-on-one order is not important. Cloud service providers must maximize market share at any cost.

Moreover, the previous IBM is still a latecomer in the cloud computing market. If IBM can use this order to turn itself into one of the top three cloud service providers, it will be well worth betting on. Because, in a way, this is probably the last chance for IBM to climb the ladder.

So, although many people think that Google and Red Hat, which lack an enterprise-level DNA, are a better match. However, unexpectedly, "there was a Cheng Yaojin on the way."

Google misses the opportunity

In fact, when Red Hat chose to sell herself, she gave Google a chance. It's just that Google's offer was lower than IBM, so the acquisition failed.

Google is the third largest cloud service provider in the world, and whether it buys Red Hat or not will not change its current position. However, no matter which field, ranked third, the final result will not be too good. Therefore, Google is also looking for room for further development.

Unlike IBM, Google doesn't need cooler technology, nor does it need more developers to pursue it. The only thing missing is enterprise-level features. Google, though, has been trying to make up for its shortcomings. However, judging from the current results, little effect has been achieved. If it can buy Red Hat, Google can quickly have its own enterprise plate. Google CEO Diane Greene must be aware of this, too. But why didn't it succeed in the end? Maybe the founders of Google think cloud computing is very important, but it's not worth spending 34 billion dollars.

In any case, this is an era of oligopoly, and the cloud has brought subversive changes to the IT market. When Amazon is transformed into a "new Amazon" and Microsoft into a "new Microsoft", IBM will also take this opportunity to transform into a "new IBM". So, who will be next?

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