On Sunday, IBM said it is acquiring Red Hat for $33 billion, a premium of 63% over its traded value, as it looks to build the hybrid cloud capability and take on entrenched players such as VMware, Google Cloud, Amazon Web Services and Microsoft Azure.
“The prima facie focus on acquisition like this is to ensure minimum overlap and the integration is smooth,” said Sanchit Vir Gogia, Chief Analyst & CEO at Greyhound Research.
Gogia said IBM could take Red Hat into new accounts once they are integrated. The two firms also have common clients.
“Once the integration is in a better place, success stories will be replicated from one region to the other, one vertical to the other. For a while these businesses will run as usual,” Gogia said. “There are bigger hurdles to cross than replicating success stories across countries and verticals.”
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.
Have a question on this or other Digital Transformation topics? Click here to set up an enquiry call with Sanchit Vir Gogia.
Copyright © 2018 Greyhound Research. All rights reserved. You may share this research note using the options made available. Please don’t copy this research note (complete or parts) and distribute over the web and emails. Connect with us if you need clarifications.