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2019 is the Year of Consolidation: Why IBM’s Deal with Red Hat is a Harbinger of Things to Come

This week, Cloud Foundry Foundation Platinum member IBM announced it had acquired Red Hat for $34 billion. I see this deal as the latest confirmation of one thing: open source continues to be the driving force behind innovation for companies of all sizes. Both Red Hat and IBM have been massive contributors to the open source world for years, and the combined power of the two will offer customers a veritable feast of options.

I believe 2019 will be the year of consolidation in the cloud ecosystem, from startups to publicly traded companies. From Microsoft to IBM, large cloud providers have identified the needs of their enterprise customers: they want multi-cloud and multi-platform solutions. They want agility, portability and scalability. They want to continuously deliver solutions to their own end users, and they need the flexibility of open source to do this.

That’s why we’re seeing enormous mergers like Microsoft’s acquisition of GitHub and IBM’s new takeover of Red Hat. These acquisitions demonstrate that Microsoft and IBM have keen understanding of their enterprise customers’ needs – and enterprise developers frequently insist on open source. Providers have an incentive to expand their portfolios to provide their customers with a multi-cloud solution – and companies that have years of experience in open source, such as Red Hat, provide the keys to unlocking a much broader spectrum of open source communities.

IBM has been a long-time contributor to Cloud Foundry – both in the form of commits to the platform and as a partner in business and marketing on the Foundation side. Last month, IBM announced IBM Cloud Foundry Enterprise Environment at Cloud Foundry Summit, which allows users to create and manage isolated Cloud Foundry environments for hosting applications exclusively for their organizations. IBM also spearheaded the proposal of Cloud Foundry’s newly accepted open source Project Eirini, which enables operators and product vendors to use Kubernetes as the underlying container scheduler for the Cloud Foundry Application Runtime. 

Our alliance continues to foster the innovation of the open source world and to serve Cloud Foundry users across the globe. I see IBM’s investment in Red Hat as a demonstration of even deeper commitment to open source innovation, community involvement, and I look forward to seeing how 2019 will unfold across the entire cloud ecosystem.

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Abby Kearns, AUTHOR

Abby is the Executive Director of the Cloud Foundry Foundation.