Purple Reign: Five ways to look at IBM buying Red Hat
Mergers and Acquisitions

Purple Reign: Five ways to look at IBM buying Red Hat

Having spent decades writing about the fallout of enterprise technology mergers and acquisitions I think I can say, with expert confidence, that nobody ever calls these things correctly. A long-held tradition calls for rapid analysis, a glance at stock price movements, a weak pun on the potential new name for the company, a quick call around of the usual suspects, maybe an off-the-record chat with folks with an axe to grind and a hasty conclusion that the result will be either disastrous or epoch making. With that in mind, I've held back commenting on IBM agreeing to buy Red Hat… until now.

Bitter experience has taught me the fraught dangers involved in bold analysis or confident prognostication, for your reporter is the man who once considered Apple "finished" and tipped you off that Amazon's Kindle was a "crummy e-book format". So I have waited and bided my time and only now sagely bring you the artfully back-covering five possible ways to look at IBM buying Red Hat.


Blue and Red: The odd couple

On the face of it these are very different companies and cleverly combining Big Blue and Red Hat to make a beautiful purple rather than some murky combination is the big task.

The challenge here isn't so much about the ‘commercial code versus open source' dilemma. IBM has a long history of dealing in Linux and open source software and the Red Hat EMEA boss Werner Knoblich in 2010 told me that IBM had a strong relationship with his company in Unix-to-Linux platform shifts. It's not even a deal-breaker that in areas such as middleware the pair are competitors; there's room for plenty of SKUs there. But what's more contentious is the cultural element.

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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