Meanwhile, Red Hat CEO Jim Whitehurst offered: "Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience - all while preserving our unique culture and unwavering commitment to open source innovation". Shares traded upwards of $US175 in June, but disappointing earnings combined with a volatile market had seen the price drop sharply. The game plan revolves around the hybrid cloud and managing multiple environments. The independence IBM has committed to will allow Red Hat to continue building the broad ecosystem that enables customer choice and has been integral to open source's success in the enterprise.
"Most companies today are only 20 per cent along their cloud journey, renting compute power to cut costs", she said.
Under the deal, IBM will acquire all of the issued and outstanding common shares of Red Hat for $190 per share in cash.
"Red Hat could save IBM's lack of developer traction", said Stu Miniman, an analyst with SiliconANGLE Media Inc.'s market research group Wikibon.
IBM notes that it has ample cash, credit and bridge lines with which to finance the acquisition and that it intends to finance the deal through a mix of cash and debt.
Tech giant IBM announced Sunday that it will acquire open source software company Red Hat. Sure, open source folks will worry about IBM's purchase, but Big Blue has been a good steward of open source.
"Today's announcement is the evolution of our long-standing partnership", Rometty added. In addition, IBM and Red Hat will remain committed to the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network.
"Powered by IBM, we can dramatically scale and accelerate what we are doing today".
At the same time, sales last quarter overall missed analysts' expectations and the forecast for the current quarter also fell short, fueling concerns Red Hat may be losing deals to rivals and growth may be slowing.
Red Hat has been in business since 1993 and has expanded its offerings from Linux to a number of open source middleware products.
Red Hat Inc.is a great example of how a company can be successful with open source. "Together we can become the leading hybrid cloud solutions provider". "When the transaction closes ... we will be a distinct unit within IBM and I will report directly to Ginni", he wrote. Red Hat has been seen as the gold standard for providing services and support for open-source in a financially sustainable way.
Whitehurst also stressed that "Red Hat is still Red Hat". "Since the day we made a decision to bring open source to the enterprise, our mission has remained unchanged". Open-source software such as the Linux operating system, the web browser Firefox and big-data analysis software such as Apache Hadoop has gradually become the bedrock for many applications, even in large enterprises.