Tuesday, November 6, 2018

IBM acquisition of Redhat

True story, my wife and I were watching TV when my wife asked, "What's Redhat?".  I then explained that Redhat was a company that (loosely) packaged open source software together and sold support for it.  Because my wife was familiar with Cloudera, I told her that it was the Cloudera of the Linux operating system world.

Then she blew me away by then asking, "Why would IBM want to buy them for $30 billion dollars?"

As a software developer that has worked almost exclusively on Linux in his career, it was a huge announcement.

After sitting back and pondering it for awhile, I was beginning to think about the move and it was a good move by IBM.

In my opinion, it is a great move for IBM.  But the probability of it being a success is low.

In one article I read, a Redhat engineer said: "I can't imagine a bigger culture clash."  I think that pretty much sums up the thoughts of myself and many other engineers.

Here were some differences I thought about after the sale was announced:
  • IBM engineers are typically told to be wary of the GPL to avoid potential code pollution, Redhat engineers work with the GPL all of the time
  • IBM often requires signed license agreements for code contributions to their code base, Redhat works with the open source community on tons of things as is
  • IBM legal likes to get their hands into the middle of many things
This of course doesn't even get into the fact that Redhat & IBM have different competing technologies.

I read a tweet (which I'm having trouble finding), but it said something to the effect:
  • IBM just paid 30% of their market cap for Redhat
  • Redhat's headcount is only 3% of IBM's
  • Unlike IBM, Redhat does not really have much intellectual property (IIRC, IBM has the largest patent portfolio of any US company)
  • Unlike IBM, Redhat does not really have much capital assets
and I'm going to add
  • Unlike IBM, Redhat gives away its product for free
  • Unlike IBM, Redhat employees can leave Redhat and take leadership of their product with them
It's a huge culture clash.

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