Here is one take.
Here is one take.
Red Hat is already dead money… give it 3-5 years and IBM will unload Red Hat pennies on the dollar.
@2wsu+1cVP6I2a very good points.
But i think a company without a public cloud isn't a cloud company and will no longer have high margin business (apart from monopoly niche like mainframes) because once the users settle on a platform (cloud), they're going to use the sw and services provided by the same company. Example: Aws users wont use anything which isn't amazon. They'll develop equivalent sw if anything is missing compared to competition.
Therefore i think RH revenues cannot be predicted to grow without having a successful ibm cloud.
"Arvind is already calling them partners instead of competitors, that in itself means he has given up."
Ironically, giving up (on being a tier 1 vendor in public cloud) is probably a wise move. The game was already lost when IBM bought Softlayer and left in place for far too long execs who could not admit that Bare Metal was not a viable strategy*. By the time they accepted that/IBM replaced the execs in question, it was already well behind.
That mistake was compounded by the failure to invest the massive amounts of capital that Google, MSFT, and above all AWS were investing, and which was vital to achieving economies of scale, even though that meant booking large losses for a while. Instead, IBM decapitalized the company through share buybacks and dividends; and bought Red Hat.
On top of that, it's a fair conclusion that even if the investment had been forthcoming, it would not have been well spent, based on the long-running saga of IBM Cloud's failures to modernize its infrastructure.
And now finally we get to the point where IBM Cloud is not merely a failure on its own account, but an anchor on the rest of the business when we are told that we must support IBM Cloud if we want to be on AWS and MSFT.
The hard part, of course, is determining what IBM will be now that it's clear that it won't be a tier 1 cloud provider.
Everyone either eats IBM's lunch or just outright has a better lunch than IBM. The latter is the case most of the time. Steak is much better than a peanut butter and jelly sandwich.
RH doesn't necessarily suck but it's just $3B revenue, ibm tried to show that it grows by 20% but we all know that's because ibm probably moved some legacy sw in same bu to make it look that way.
Ibm paid a massive 34B for it, that's the real issue.
Even if the actual growth is 20%, 600mil is nothing compared to how much aws, msft, goog are growing.
Arvind is already calling them partners instead of competitors, that in itself means he has given up.
Red Hat didn’t do anything for IBM. They’ve always sukd too
If you can't win, then create a "Hybrid Cloud" strategy.
Will work as well as a "Hybrid Car" - a horse pulled auto. https://commons.wikimedia.org/wiki/File:Horse_drawn_US_Mail_car.jpg
"It's technically not ibm's lunch if ibm isn't even a player. It's aws's lunch and msft is close second."
IBM is standing outside the café, in the rain, with its nose pressed up against the window.
It's technically not ibm's lunch if ibm isn't even a player. It's aws's lunch and msft is close second.
IBM’s lunch is a SH-T sandwich!!!
Nobody wants IBM's lunch. We're all just eating leftovers from the '70s.
Isn’t EVERYBODY eating IBM’s lunch?
I love this part:
"...Alibaba, Google, IBM, Microsoft and Oracle are all looking to challenge AWS. And unlike the Alibaba and Google clouds, AWS is profitable. ..."
It's like there isn't even any point in mentioning IBM in the 2nd sentence.