A Silver Lining for IBM i Users in the Red Hat Deal

A Silver Lining for IBM i Users in the Red Hat Deal

IBM i users have become accustomed to living with a degree of uncertainty over the past couple of decades. For all its many fine attributes, the platform has always been a bit of a maverick in the IBM portfolio. As the company’s fortunes have seesawed in recent years, there were legitimate concerns that the i platform might be marginalized or even sold off to another company, particularly as IBM executives have articulated their strategy of going after only "high-value" opportunities.

IBM and redhat

The recent news that IBM plans to buy Red Hat may cause those concerns about the IBM i’s future to surface again, but I think this move is ultimately good for the community.

IBM’s future has been in question for some time as the company sold off businesses amid a nearly six-year streak of declining quarterly revenues that thankfully ended early this year. IBM has recently looked like it was playing defense, but the Red Hat deal is anything but defensive.

IBM is placing a big bet on a sound long-term strategy anchored in hybrid cloud.

Yes, the $33 billion purchase price is nearly 10 times Red Hat’s annual revenues, but I suspect IBM’s motivation was to block out any risk of competitive offers. It really wanted Red Hat, and its willingness to forgo dividend payments for the next two years while taking on substantial debt to make this deal happen is an indication of how serious it is about the opportunity.

The acquisition will make IBM, by default, the world leader in Linux, but more important is that it will also become the leader in open source solutions to enable hybrid cloud. IBM CEO Ginni Rometty has frequently said that the cloud is still in its infancy, with only about 20% of workloads having moved over. The other 80% is a huge opportunity to sell software and services.

IBM has been consistent in defining its strategy around hybrid cloud, which is all about giving customers the choice to run workloads on whatever combination of owned and rented infrastructure they prefer. Red Hat’s OpenStack, OpenShift and Cloud Forms platforms, combined with IBM’s Cloud Private and Multicloud Manager, should give company a seat at the table in any serious hybrid cloud discussion.

Failing companies sometimes resort to mergers and acquisitions out of desperation, but I don’t see that being the case here. IBM’s decision to operate Red Hat as an independent subsidiary shows that executives are keen on maximizing agility without getting into the weeds on product integration. It’s a risky bet, but a lot less risky than doing nothing.

IBM i customers may worry that funds for the development of their platform will be starved by IBM’s growing investments in open source. That’s a realistic possibility, but IBM’s history would indicate that it will stay loyal to its customers. Rather than seeing the community as a liability, I think IBM regards i users as its best prospects to move to open systems and hybrid cloud platforms.

Nevertheless, I also think IBM’s attention will be focused elsewhere for the foreseeable future. It has to walk the fine line between taking advantage of its pole position in Linux and preserving the many partnerships Red Hat has with other companies, including competitors. It also has to double down on its cloud and cloud migration products as it bids for top-tier status there.

Now is a good time for IBM i customers to think about a long-term strategy for bringing Linux into their environments.

IBM is betting its future on this platform and customers should follow its lead. If you haven’t already created a Linux LPAR on your i servers, I recommend you do so. Start becoming familiar with Linux server administration and the vast range of open source tools that are available to help. Linux isn’t as simple to use as the i, but the open source community has done a pretty good job of building tools to hide its complexity.

Engage your IBM or partner account rep in a discussion about sensible migration strategies. Look, in particular, at OpenShift, which is Red Hat's version of the Kubernetes container orchestrator. Containerized applications can be shifted easily between on-premises and cloud platforms and run on top of nearly any operating system. It’s a powerful incentive to make all new application development cloud-native. Also, many organizations are now beginning to migrate legacy applications to new platforms by encapsulating them in containers. While it’s unlikely that IBM will bring container technology directly to the i operating system, it has already committed to supporting containers on POWER systems, enabling some legacy applications to be shifted.

The Red Hat acquisition gives IBM plenty of incentive to make its own customers a showcase for its hybrid cloud vision. Take advantage of this transitional time to look for incentives that can make your own adoption of open systems and the cloud easier and less expensive. Having a Linux strategy in place will get you in sync with the direction in which the enterprise computing world is heading.