IBM Corp (IBM.N) said on Sunday it had agreed to acquire U.S. software company Red Hat Inc (RHT.N) for $34 billion, including debt, as it seeks to diversify its technology hardware and consulting business into higher-margin products and services.
It underscores IBM chief executive Ginni Rometty’s efforts to expand the company’s subscription-based software offerings, as it faces slowing software sales and waning demand for mainframe servers.
“The acquisition of Red Hat is a game-changer … IBM will become the world’s No. 1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses,” Rometty said in a statement.
IBM wants to secure its position in the cloud, and this acquisition should help them accomplish that.
This will probably mean increased funding and focused development for Redhat, which is good imo.