IBM - dinosaur or future growth

[NW-Bound]

They paid $34B for a company that earned $259 million on revenue of $2.92 billion last year...

Wow! That much for a company that works with Linux and open-source software. For that much money, they could have invested in their own employees and have them learned all that stuff in house.

Heck, I would bet that there are plenty of IBM employees who already learn a lot of this on their own to broaden their skill in case they need to change job.

It shows IBM executive managers are clueless and desperate. Bleak!

 

[samclem]

I'm more optimistic than most folks here, I guess. I'm hoping IBM paid a lot for Red Hat because they want to buy instant credibility with Linux users, which will become worthless if you hey crush RH's culture. It is a longshot, but I'm hoping they want to make Linux (already a fast, slim alternative to bloated Windows and closed, insular, $$Apple) into an accessable OS for folks who aren't computer hobbyists. I'm sure I'm not the only one disappointed with the two present commercial OS choices.

Or, maybe they'll just ruin RH. . .

 

[Spock]

This has all the debt graphs.
The article suggests IBM debt will be downgraded to BBB.

https://www.zerohedge.com/news/2018...s-red-hat-34-billion-largest-ever-acquisition

 

[neihn]

... For that much money, they could have invested in their own employees and have them learned all that stuff in house.
..

IBM got involve with Linux community way back in 1999, they were a major contribution to the Linux kernel that helps Linux becomes enterprise OS in a very sort time

https://www.bizjournals.com/sanfrancisco/stories/2001/06/04/newscolumn8.html

They have enough people with the know how to spin another Linux distros, but never really want to be in Linux distros business. I too, very skeptical with this acquisition, but I wish them success any way.

 

[target2019]

Just a WAG, but IBM probably has agreements to use/distribute RedHat, and needs a Linux distro to maintain some lumbering part of their business eco-system.

 

[NW-Bound]

I dunno.

One of my former megacorp employers made a dubious purchase of a small startup with a promising prototype. When the project was integrated into the company and efforts were made to turn it into a salable product, it was discovered that it was a half-baked idea, and it was not surprising that the original entrepreneurs bailed out and took the money to the bank. All the wonderful attributes of this project were just promises on paper. The real thing was nothing like that.

The project ultimately failed, and had no salvageable value left. Zero. The acquired company was a private venture, so the acquisition terms were not disclosed. It was nowhere near $34B though.

Megacorp could have developed something like that in-house, but I guess they thought they got a good deal buying something cheap, and "proven". Hah!

 

[jollystomper]

The interesting part of this is that Canonical (the makes of the Ubuntu Linux distribution) seemed to be cozying up much more to IBM than Red Hat. Perhaps because they are the relatively "newer kids" on the block (as compared to Red Hat or SuSE). Canonical made Ubuntu versions available for all IBM hardware (including mainframes) for free, and (I had to do an analysis for a project) provided much more consistently for the software packages within their distribution across of the hardware than either Red Hat or SuSE.

However, Red Hat has much greater current market penetration, so perhaps IBM is also looking at both "legacy" and "new' income streams for this acquisition...