![]() "As organizations seek to increase their pace of innovation to stay competitive, they are looking to open source and a distributed cloud environment to enable a new wave of digital innovation that wasn't possible before. ![]() The acquisition of Red Hat further strengthens IBM as the leader in hybrid cloud for the enterprise. IBM's offerings have evolved to reflect new customer needs and drive greater growth. Businesses are seeking one common environment they can build once and deploy in any one of the appropriate footprints to be faster and more agile. To succeed in the next chapter of the cloud, businesses need to manage their entire IT infrastructure, on and off-premises and across different clouds – private and public – in a way that is simple, consistent and integrated. Chapter two, however, is about shifting mission-critical workloads to the cloud and optimizing everything from supply chains to core banking systems. In this first chapter of their cloud journey, businesses made great strides in reducing costs, boosting productivity and revitalizing their customer-facing innovation programs. Most enterprises today are approximately 20 percent into their transition to the cloud. Services revenue also grew 17 percent.ĭigital reinvention is at an inflection point as businesses enter the next chapter of their cloud journey. In that quarter, subscription revenue was up 15 percent year-over-year, including revenue from application development-related and other emerging technology offerings up 24 percent year-over-year. Fiscal first quarter 2020 revenue, reported in June, was $934 million, up 15 percent year-over-year. Red Hat's fiscal year 2019 revenue was $3.4 billion, up 15 percent year-over-year. The Red Hat acquisition is expected to contribute approximately two points of compound annual revenue growth to IBM over a five-year period. IBM cloud revenue for the 12-month period through the first quarter of this year grew to over $19 billion. This growth comes through a comprehensive range of as-a-service offerings and software, services and hardware that enable IBM to advise, build, move and manage cloud solutions across public, private and on-premises environments for customers. IBM's cloud revenue has grown from 4 percent of total revenue in 2013 to 25 percent today. Red Hat will operate as a distinct unit within IBM and will be reported as part of IBM's Cloud and Cognitive Software segment.īoth companies have already built leading enterprise cloud businesses with consistent strong revenue growth by helping customers transition their business models to the cloud. IBM will maintain Red Hat's headquarters in Raleigh, North Carolina, its facilities, brands and practices. Red Hat will continue to be led by Jim Whitehurst and its current management team. Whitehurst is joining IBM's senior management team, reporting to Ginni Rometty. Joining forces with IBM gives Red Hat the opportunity to bring more open source innovation to an even broader range of organizations and will enable us to scale to meet the need for hybrid cloud solutions that deliver true choice and agility." "We think open source has become the de facto standard in technology because it enables these solutions. They want to build more collaborative cultures, and they need solutions that give them the flexibility to build and deploy any app or workload, anywhere," said Jim Whitehurst, president and CEO, Red Hat. ![]() "When we talk to customers, their challenges are clear: They need to move faster and differentiate through technology. As the leading hybrid cloud provider, we will help clients forge the technology foundations of their business for decades to come." IBM and Red Hat are uniquely suited to meet these needs. And they need partners they can trust to manage and secure these systems. "They need open, flexible technology to manage these hybrid multicloud environments. "Businesses are starting the next chapter of their digital reinventions, modernizing infrastructure and moving mission-critical workloads across private clouds and multiple clouds from multiple vendors," said Ginni Rometty, IBM chairman, president and CEO. Based on open source technologies, such as Linux and Kubernetes, the platform will allow businesses to securely deploy, run and manage data and applications on-premises and on private and multiple public clouds. Together, IBM and Red Hat will accelerate innovation by offering a next-generation hybrid multicloud platform. Red Hat's open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM's innovation and industry expertise, and sales leadership in more than 175 countries. The acquisition redefines the cloud market for business.
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