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October 29, 2018
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Red Hat and IBM: Elephants Can Dance

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What an M&A surprise in the tech world yesterday with IBM picking up Red Hat, the jokes on Twitter were of course on point:

To expand on Alexis Richardson’s funny joke above, the clouds wars are no joke amongst the hyper scale clouds of the world and the war continues to escalate. Microsoft recently closed its deal with GitHub at $7.5B to only have IBM buy Red Hat for $34B. I can’t wait to see what Google, Oracle and the other large cloud providers pick up in the coming months.

I’ve had the privilege to work at both IBM and Red Hat earlier in my career so I’m familiar with the culture of both companies; it’s going to be interesting to see how the acquisition plays out over time. IBM is a gigantic company known for its bureaucracy that has been around for over 100 years and has successfully reinvented itself multiple times to survive (see the Who Says Elephants Can’t Dance book by IBM former CEO Lou Gerstner for a case study on this). Red Hat is an early open source pioneer with a fantastic and unique engineering culture that has been supporting remote work before it was cool and pioneered the concept of an “open source conflict of interest” clause (which will be interesting to see if IBM adopts):

“Participation in an open source community project, whether maintained by the Company or by another commercial or non-commercial entity or organization, does not constitute a conflict of interest even where you may make a determination in the interest of the project that is adverse to the Company’s interests”

There has been some FUD going around that IBM doesn’t fund open source or participate much in open source:

This FUD is absolutely crazy and needs to stop, IBM has arguably done more for open source than any other company to get where we are today with open source being prevalent in almost every industry and vertical:

IBM spent $1B on Linux before open source (and even Linux was cool)? Hell, I spent my early career working on open source at IBM where they had one of the first Open Source Program Offices (OSPOs) and spent my time hacking on Eclipse full time, which was another open source project that IBM helped start that disrupted the whole commercial tooling industrial complex. You can read more about IBM’s commitment to open source here which I think provides a great timeline of the various open source projects they have been involved in before open source was cool.

Anyways, to my Red Hat colleagues, my advice would be to give this a chance for awhile as IBM has a lot of strengths that Red Hat could take advantage of, they are truly a global company and have a solid sales channel that is embedded all over the world.

To my IBM colleagues, don’t “bluewash” this company and almost treat this as a reverse merger, embrace the culture from Red Hat and you should honestly consider making Jim Whitehurst CEO of IBM and Chris Wright CTO of IBM. As Lou Gerstner said, “culture isn’t just one aspect of the game, it is the game” and this is one area that Red Hat can greatly help IBM as it navigates towards the cloud.

Here are also a couple other good takes on the acquisition I enjoyed:

Finally, I’m really looking forward to see what IBM and Red Hat together, they have both been kindred spirits in making bets early on open source and I hope they bring that same zeal to the cloud. It at least makes my job running the Cloud Native Computing Foundation (CNCF) more entertaining 🙂

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