The long-term strategy behind IBM’s purchase of Red Hat • The Register

IBM’s software chief reiterated on Wall Street this week that OpenShift is the linchpin of Big Blue’s overall multi-cloud strategy.

Speaking at Morgan Stanley’s Technology, Media and Telecom conference, Tom Rosamilia said the OpenShift container management family, developed by Red Hat that IBM bought in 2019, was key to containerizing Morgan Stanley’s Cloud Pak software. Big Blue so it’s easier to run where customers want it. This could be onsite or offsite, or a hybrid of the two.

“By rebasing our Cloud Paks on OpenShift, we’ve now moved all of our middleware to an environment where I can deploy to AWS, I can deploy to Azure, I can deploy to IBM Cloud, and I can deploy to prem,” Rosamilia said.

This containerization of applications is crucial to IBM’s pivot to offering software for hybrid multi-cloud environments. Rosamilia said its apps and services, packaged in Red Hat OpenShift containers, are completely platform independent.

IBM’s desire to transform into a cloud-focused hybrid company has been underway for some time. IBM Z and Cloud Modernization Centerwhere Big Blue customers can go for help moving from on-premises to cloud is an example of this strategy, which Rosamilia says has become the norm across industries.

“Five years ago, we were fighting an uphill battle, talking about hybrid cloud as a destination…nowadays we don’t have any of those conversations,” Rosamilia said. Instead, companies are now trying to figure out how to modernize their hardware for on-premises work and figure out what can be moved to the cloud. And IBM wants to be there to catch them, Red Hats in hand.

Rosamilia reported that Red Hat grew 21% in the fourth quarter of 2021, making it a major part of its promise to investors in October 2021 to take IBM as a whole to single-digit revenue growth between 2022 and 2024. .

Speaking of investors, IBM’s financials, losses and executive compensation have been in the news lately. The IT giant recently decided to appease shareholders upset over a massive payout to former Red Hat CEO Jim Whitehurst by promising they wouldn’t do the same thing again, and in November it separated its managed infrastructure wing.

IBM’s strategy has been one of continuous takeovers according to Rosamilia. He noted that the US company has made more than 20 add-on acquisitions since the start of 2020, about half of which were software companies.

Rosamilia said many of the acquisitions were in automation as well as cybersecurity. IBM has even acquired one of McDonald’s drive-thru technology companies as well as software dashboard equipment, the code from which it plans to integrate into its own products.

IBM’s acquisitions and strides in bringing the world to its hybrid cloud flavor won’t completely erase its problems. The company is still facing a rollback of the aforementioned payout from Red Hat executives, as well as an ongoing age discrimination lawsuit that alleges CEO Arvind Krishna was part of an internal campaign to replacing older workers with younger ones. ®

Michael J. Chiaramonte