cloud

IBM announced Monday that it is acquiring Red Hat, a provider of open source cloud software, for $34 billion. More companies today are already using multiple clouds. However, research shows that 80 percent of business workloads have yet to move to the cloud, held back by the proprietary nature of today’s cloud market.

This prevents portability of data and applications across multiple clouds, data security in a multi-cloud environment and consistent cloud management. IBM and Red Hat believe they are strongly positioned to address this issue, and accelerate hybrid multi-cloud adoption.

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer. “IBM will become the world’s #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

READ:  PayPal Acquires Swedish Firm iZettle for $2.2 Billion

“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs,” she said. “The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales.”

The acquisition has been approved by the boards of directors of both IBM and Red Hat, and is expected to close in the latter half of 2019.