Red Hat shows off multi-cloud strategy as it completes deal with IBM

July 11th, 2019 | by Grace Chng

Open source giant Red Hat is now safely in IBM’s hands with the successful closure of the US$34 billion acquisition on July 9. IBM intends to boost its cloud market business with this deal.

IBM Cloud, together with Amazon Web Services (AWS), Google Cloud and Microsoft Azure, are among the top cloud vendors.

In the commercial cloud business, IBM Cloud is a poor third with annual revenue run rate of US$10.30 billion, according to a Zdnet.com report, after Microsoft commercial cloud at US$21.2 billion and AWS at US$20.4 billion.

Enterprises’ move to the cloud is inevitable. Cloud computing generates many productivity gains including ease and speed in scaling up operations and deploying applications.

The latest trend is that enterprises have data and information held in their own on-premise or private clouds as well as public clouds. Increasingly, they are also using multiple public clouds

Red Hat with its strengths in data centre software, will help IBM capture this business. Together, the combination will serve those big enterprises with legacy systems to move to the cloud, including multiple cloud platforms. It is also a win-win for Red Hat, as it will also be able to tap IBM to reach more customers.  

IBM had been acquiring cloud related businesses in the last few years as it sought to transform itself into a more modern software and professional services company.

In 2015, it acquired Clearleap, a company that gives it enterprise-grade video content management services in the cloud. The following year, IBM bought Sanovi Technologies which provides business continuity, cloud migration, and hybrid cloud software solutions.

In 2017, Cloudigo, which offers advanced network processing, was acquired to provide IBM with cutting edge data communications.  

Red Hat and multi-cloud

Meanwhile, Red Hat is showcasing its multi-cloud hybrid cloud strategy as well as Red Hat Enterprise Linux 8 and OpenShift 4 in 11 key Asian markets, including Singapore, Japan, Korea, China, India and Malaysia.

While hybrid cloud has been gaining traction in recent years, multi-cloud hybrid clouds is the “new thing”, said Brendan Paget, in a media briefing on July 9. Paget is Red Hat’s director for product portfolio in Asia-Pacific.

With a multi-cloud hybrid cloud strategy, enterprises use more than one cloud vendor such as Microsoft Azure and AWS to deploy their resources and applications quickly and efficiently. Hybrid cloud strategy refers to enterprises using both private and public clouds for their operations.

Enterprises are asking for Red Hat’s multi-cloud solutions because “they are open source and remain the same while the infrastructure can change”, said Paget.

The company’s open source Red Hat Enterprise Linux and OpenShift have the capabilities needed to operate well in the multi-cloud hybrid cloud environment.

Damien Wong, Red Hat’s vice-president and general manager for key Asian countries, said at the media briefing that enterprises are increasingly looking to bridge the traditional on-premise cloud infrastructure to multi-public cloud platforms.

“This lets them develop and deploy modern applications efficiently, no matter where their resources reside in the cloud,” he said. “Through multi-cloud, these applications can be provided as a service which results in more efficient operations.

“It also optimises enterprises’ existing investments, they can do more with existing infrastructure, they don’t need to spend so much on IT,” he said.

As an example, he cited DBS Bank, where about 80 per cent of its banking processes were cloud enabled in 2018. Over 60 applications were developed as cloud software.

CORRECTION at 12/07/2019, 4:14pm: An earlier version of the story misstated Damien Wong’s name. This has been corrected. We are sorry for the error.

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