IBM Closes $34 Billion Red Hat Acquisition to Boost Cloud Growth
IBM officially completes its massive $34 billion purchase of Red Hat ahead of schedule, hoping the open-source giant will finally accelerate its lagging cloud transformation.
IBM officially closes its massive $34 billion acquisition of Red Hat after regulators in the U.S. and EU move surprisingly quickly to approve the deal. The tech giant now faces the immediate challenge of integrating the open-source leader into its product family to reverse years of sluggish growth and low cloud market share.
The company desperately needs this deal to succeed after enduring a difficult transformation journey throughout the decade, including a staggering 22 consecutive quarters of declining revenue. Despite early cloud efforts like the 2013 SoftLayer purchase, IBM consistently struggles to gain meaningful traction against larger competitors in the cloud space.
IBM views Red Hat as the key to unlocking a broader hybrid cloud strategy that allows it to sell services across multiple cloud platforms instead of just its own. While this bold $34 billion bet represents a major transformation effort, it remains to be seen whether this combination will finally end IBM's long losing streak and deliver the market share gains it seeks.