IBM buys Red Hat

Red Hat has been purchased by IBM in a deal worth US$33.4 billion or approximately US$190/share, well above its Friday closing price of US$116.68. The deal is clearly positioned to diversify IBM away from its stable but slow-growing legacy mainframe line of business, which recently had been the only major portion of the company with a positive showing, and jump-start its ailing cloud offerings.

What this means for Red Hat Enterprise Linux (RHEL), the company's premier enterprise offering, is continued stability for large customers and their service contracts. IBM has always served its large accounts well and this will increase confidence in using IBM server hardware outside of the traditional AIX and Z shops. It also almost certainly indicates an enhanced commitment to RHEL on IBM's POWER hardware, which due to being a Linux on Power partner was already the preferred Linux option on hardware IBM sold directly, and IBM may push RHEL to OpenPOWER hardware customers as a product more strongly in the future.

Fedora is also very unlikely to be affected by this: IBM has made substantial contributions to open source over the years, and fumbling a high-profile project like Fedora which even Linus himself uses (at least of late) would be an own goal of such epic proportions that even the sometimes brazenly incompetent IBM upper management would probably not do it. However, given that as far back as 2016 IBM said that ppc64le was the future for Linux on POWER, this all but guarantees big-endian ppc64 will not return to Fedora after its removal in the upcoming F29. (We run F28 on our own Talos II.)

The outlook for the various Fedora and Red Hat downstreams like CentOS is less clear, but it seems reasonable to assume that if Fedora remains intact, they will also continue to do so (albeit potentially with less official support post IBM-Red Hat, and it is possible CentOS developers who work for Red Hat may not be so employed after the merger). There is no word on what this means for Red Hat's other products.

From the perspective of the OpenPOWER ecosystem and the Talos systems specifically, there are good reasons for optimism. It more firmly weds IBM and Power ISA to Linux and will likely elevate ppc64le to a tier-1 offering within the Red Hat and Fedora ecosystem to further IBM's strategic goals with OpenPOWER. To the extent the underlying work makes its way back to the Linux source tree, it in turn can trickle down into better POWER9 and Power ISA support in any Linux distribution that chooses to take advantage of it, and that eventuality can only be positive. Unfortunately IBM management has recently become more ossified and less visionary than ever, and as a result the company has not shown good performance and innovation outside of its core large system competency and its research labs. The old joke during the Power Mac AIM (Apple-IBM-Motorola) alliance days was Apple plus IBM equals IBM, but no one was really laughing. Red Hat certainly has its own bureaucratic issues to deal with, but our worry is that the IBM monolith will affect Red Hat far more than the other way around.