Business analysts can argue over whether IBM’s $34 billion acquisition of Red Hat sends shivers down the spines of Amazon and Microsoft. I suspect not. There will be plenty of market for everyone. However, the combined power of IBM and Red Hat will be substantial moving forward in cloud and platform adoption, particularly at the intersection of telecom and the enterprise as their once oblique paths merge in the oasis of open networking. In a joint presentation to analysts this week, IBM and Red Hat went out of their way to ensure investors and the industry that Red Hat would be left to its own devices. They said the companies will operate independently, thereby securing the independent nature upon which Red Hat has built its reputation and its business. When a company, IBM in this case, has a reputation for doing otherwise with acquisitions to the point that the integration process has a nickname – blue washing – the point does need to be emphasized.
Arvin Krishna, Senior Vice President of Cloud and Cognitive Software at IBM, made three points in this regard:
- First, he said IBM is completely committed to preserving Red Hat’s neutrality. Krishna added that Red Hat serves a vast ecosystem of partners, many of whom can be considered competitors to IBM, including other public cloud providers, hardware providers and other software suppliers. Red Hat has to be able to maintain the ability to work with them, with a clear conscience, and not give advantage to one over the other. “That is an absolute commitment with no qualifiers,” Krishna said.
- Second, he said Red Hat will maintain its unwavering commitment to open source, including how the company’s engineers work in open source and how they work upstream – again, no qualifiers.
- Lastly, regarding synergy Krishna said IBM will extend the portfolios of both companies. “We will be delivering the next generation hybrid multi-cloud platform.”
What’s in it for telcos?
A couple of things make this marriage particularly important to communications service providers (CSPs). The first is the focus on a hybrid platform. There are not many companies like Rakuten that can
build a greenfield network from scratch using a virtual cloud infrastructure. CSPs do not have the luxury of thinking any other way but a hybrid model because of their legacy networks.
It’s high time the industry stops moaning about that legacy being an anchor holding it back from digital transformation. While legacy infrastructure may seem like a burden for those trying to move to next-generation networks, it is a burden most service providers will have to bear and should be darn happy to bear for the time being, given that their businesses depend upon it.
When asked at the
Telecom Assurance Cloud Summit last month how CSPs can detach themselves from their legacy environment, Mounir Ladki, President and CTO of MYCOM OSI, said, “They cannot detach themselves. What people call legacy are very valuable assets generating most of the revenue for telcos. They may run for five or 10 years more…but they will be part of delivering the new digital experience.”
He’s right. And the hybrid cloud focus by IBM and Red Hat, together and collectively, is the only path forward. It is one that will focus on convergence, not just transformation.
Another angle CSPs might appreciate is how the merger may accelerate IBM’s goal of making Watson AI capabilities available on a wider variety of platforms, including OpenShift, Red Hat’s hybrid cloud, enterprise Kubernetes application platform. As nascent as AI is for networking and operations, CSPs will eventually be forced to use it to scale, optimize, automate and innovate.
Of the many takeaways the companies offered upon the acquisition, the most striking was the declaration that Linux-based, hybrid cloud environments are the only practical way forward.
Agreed. There will be many nuanced variations in the implementation of such environments, but IBM and Red Hat together as partners have already moved the ball forward in cloud and open source technologies, as a single entity, the new IBM could lead telecom service providers into the cloud future the way Amazon and Microsoft are leading the enterprise.
