IBM Announces the Acquisition of Red Hat for $34 Billion

The company has been giving their primary software for free to all its users over the years. That product, if you are a technology buff, is Red Hat Linux which most of us have been using. Oracle also uses Red Hat’s source code which is openly available for their products.

Now, you might think that IBM has lost its mind in acquiring Red Hat which is already open source. And that too, spending $34 Billion on a company that is already free. No, you are wrong if you think this way. Because the story behind curtains is totally different than on the front.

The companies such as Oracle have to pay $3 Billion annually so that Red Hat keeps supporting its products. Now, Oracle is one example and there are many companies using Red Hat products. So, you might now be counting the value of this acquisition.

Also, IBM is one of the major contributors to open source technologies too, especially Red Hat. Open Source has always been the major movement in software and it has been continuing ever since. In recent times, Microsoft also announced Github acquisition, another major Open Source platform. Similarly, companies like Google and Facebook have been advocating the use of Open Source technology too.

Also, IBM says Red Hat will operate as a standalone unit within its Hybrid Cloud organization, with Red Hat’s leadership staying intact. This is great for the current leadership of Red Hat. By this, IBM has essentially given a message that it believes in Red Hat’s leadership and their future plans.