How Red Hat spearheaded IBM’s rejuvenation strategy

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When IBM paid $34 billion buy a red hat in 2018, it was a big bet on the future of the hybrid cloud that appears to be paying off four years after the deal was announced. Over the past couple of quarters, IBM has produced slow but steady single-digit growthand positive results were achieved thanks to the Red Hat business.

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Both companies are holding face-to-face conferences with their clients this week in Boston. IBM thinks and Red Hat Summit occurring at the same time.

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Red Hat CEO Paul Cormier, who has been with the company for over 20 years, said that IBM CEO Arvind Krishna plans to transform his company around Red Hat and a hybrid cloud strategy. The idea is for his company to harness the power of IBM’s size while maintaining Red Hat’s independence.

Krishna described Red Hat as an integral part of the company.

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“Red Hat is absolutely essential and at the heart of our strategy, not just hybrid cloud,” I tell our [overall] strategy. Red Hat gives us a platform on which we do two things: first, it’s the foundation of a hybrid cloud, because Red Hat operates in public clouds as well as on premise and private clouds. Secondly, we took all the IBM software and optimized it for the Red Hat OpenShift platform, so now it turns out that we wrote something once and we can deploy it wherever the client wants, ”Krishna said yesterday at the roundtable for the press. (OpenShift is RedHat’s container management platform.)

In the latest quarterly report Revenue of IBM grew by 8%. It may seem like a minor increase, but after almost a decade of negative reviews, the company was looking for just that. Red Hat was the main contributor to this result with 18% growth, while the broader hybrid cloud business grew 14%, which is a good sign for Big Blue.

Bola Rotibi, an analyst at CCS Insight, said Red Hat is an important part of IBM’s growth strategy and helped drive this quarter’s success. “Ultimately, IBM started its fiscal year with strong first-quarter revenue growth amid healthy business operations across all reportable segments, but especially in relation to the company’s hybrid cloud and artificial intelligence operations,” she said.

Cormier said his organization is the spearhead of IBM’s hybrid strategy. But how does he said in the pasta critical part of this approach is to let Red Hat act independently, which means you can’t play favorites with IBM when it comes to sales or strategy.


Credit: techcrunch.com /

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