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IBM Corp. to Acquire Software Company, Red Hat for $34 Billion

IBM Corp. to Acquire Red Hat

American multinational company, IBM Corp. is combining forces with Red Hat to catapult the company into the ranks of the top cloud competitors.

United States: Information technology company, IBM Corp. made the world’s second largest technology deal by acquiring the open source software company, Red Hat, including debt as the company seeks to diversify its technology hardware and consulting business into higher-margin products and services. Earlier, this year Microsoft acquired open source platform GitHub for $7.5 Billion. The company is planning to catch up with the technological giants in the cloud business i.e. Amazon.com, Microsoft and Alphabet Inc.

Red Hat was founded in 1993, and is known for its desktop operating system, Linux which was developed as an alternative to the Microsoft’s operating system, Windows. The company delivers open source solutions to organizations with the assistance of Linux, cloud and Kubernetes technologies.

According to a joint statement by the two companies, IBM will pay in cash to buy all of Red Hat's share for $190 each share. Following the acquisition, Red Hat will join IBM's Hybrid Cloud team with the software giant's current CEO. The acquisition of Red Hat is a game changer which will change everything about the cloud market. IBM will become the world's #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.

CEO of Red Hat stated that joining forces with IBM will provide the company with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience - all while preserving unique culture and unwavering commitment to open source innovation.

According to TechSci Research, IBM Corp. has been slow to adopt cloud-related technologies. The company has acquired Red Hat to pursue market leaders in offering computing and other software and services over the internet which will propel the growth of the global cloud storage market and global cloud monitoring market. Rising penetration of digital services, increasing demand for cost effective & security solutions and soaring traction of software solutions for businesses are further escalating the demand for cloud services. Increasing adoption of cloud services will lead to increased demand for global cloud security market.

According to the recently published report by TechSci Research, Global Cloud Security Market, By Service Type (Identity and Access Management, etc.), By Deployment Mode (Private, Public, etc.), By End User (IT and Telecom, etc.), By Region (North America, etc.), Competition Forecast and Opportunities, 2011 - 2021”, the global market for cloud security is projected to grow at a CAGR over 10% during 2016-2021, due to rising instances of security breaches for identity and financial data theft in IT & telecom, BFSI, government and retail sectors. In addition, increasing adoption of cloud storage solutions by small & medium enterprises, rising adoption of cloud security in ecommerce, etc., is also driving global cloud security market. North America dominated the global cloud security market in 2015 due to increasing adoption of cloud computing, and growing IT security spending in the region. Few of the key players operating in global cloud security market include Trend Micro, Intel, IBM, Cisco and Symantec.

According to the recently published report by TechSci Research, Global Cloud Monitoring Market, By Component (Solutions and Services), By Service Model (Software as A Service, etc), By Organization Size (Large Enterprises and Small & Medium-Sized Enterprises), By Industry (Banking, Financial Services, & Insurance, etc), By Company, By Region, Forecast & Opportunities, 2013-2023”, Global Cloud Monitoring Market is expected to reach USD 1.99 Billion by 2023, witnessing growth at a CAGR of over 19%, in value terms, due to the increasing need of cost-effective management and security solutions. Moreover, the solutions and services provided by cloud platforms are witnessing a rise due to their application in industries such as Banking, Finance and Insurance, which will the drive the growth of this market further. Based on size of the organization, the large enterprise segment dominates the market, owing to increasing demand of enhanced cloud monitoring systems. North America is anticipated to have the largest market share over the next five years owing to rapid adoption of cloud platforms.

According to the recently published report by TechSci Research, United States Cloud Storage Market, By Type (Solution and Services), By Deployment Model (Public, Private and Hybrid Cloud), By Organization Size (Small & Medium-Sized Enterprises and Large Enterprises), By Vertical (Telecommunications & ITES, Manufacturing, BFSI’s, Healthcare & Life Sciences, etc), By Company and By Geography, Forecast & Opportunities, 2023”, United States Cloud Storage Market is expected to grow at a double digit CAGR during 2018-2023 owing to increasing acceptance of software solutions for businesses coupled with the increasing awareness of the United States government pertaining to cloud storage solutions. Based on vertical, the market is segmented into Telecommunications & ITES, Manufacturing, BFSI’s, Healthcare & Life Sciences, Consumer Goods & Retail and Others. The BFSI segment holds the largest market share in 2017, since the BFSI vertical is majorly concerned about their data security and due to the security feature the segment is also expected to maintain its dominance over the next five years as well in United States Cloud Storage Market.

 

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