IBM buys Red Hat in US$34bn straight cash deal

Following a weekend of rumours, IBM has confirmed that it will acquire enterprise Linux vendor Red Hat, in a US$34 billion cash deal.

The two companies have worked together for the past two decades, and intend to focus on the hybrid multi-cloud market after joining forces.

"Today’s announcement is the evolution of our long-standing partnership,” said IBM chief executive Ginni Rometty in a statement.

“This includes our joint Hybrid Cloud collaboration announcement in May, a key precursor in our journey to this day,” she added.

In announcing the deal, Red Hat claimed its own research shows four out five business workloads have yet to make it to the cloud.

The reason for this is concern over proprietary cloud providers; mainly that they can prevent data and application portability across multiple clouds and also make security and management difficult in such an environment, Red Hat said.

Red Hat will join IBM's Hybrid Cloud team as a separate unit, continuing to be led by the current management team.

On its part, IBM said it is committed to Red Hat's role as an open source contributor. 

"With this acquisition, IBM will remain committed to Red Hat’s open governance, open source contributions, participation in the open source community and development model, and fostering its widespread developer ecosystem.

In addition, IBM and Red Hat will remain committed to the continued freedom of open source, via such efforts as Patent Promise, GPL Cooperation Commitment, the Open Invention Network and the LOT Network," the two companies said.

At this stage, there have been no announcements as to staffing changes locally or worldwide.

More to come.