IBM CEO on Red Hat

https://finance.yahoo.com/news/ibm-ceo-red-hat-theres-1-tril…

IBM CEO Ginni Rometty…“There is a $1 trillion market in front of us emerging, and it’s emerging because clients are going from what we call chapter 1. They’ve moved 20% of their applications to the cloud, but it’s pretty much cost-focused [on] the easy stuff,” Rometty said. “80% is in front of them.”

According to Rometty, there’s still quite a large opportunity in front of us all when it comes to companies involved in the transition to the cloud.

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“According to Rometty, there’s still quite a large opportunity in front of us all when it comes to companies involved in the transition to the cloud.”

Point me to a CEO that has just overseen a large acquisition and then goes on to be lukewarm about it in the next day’s press releases.

This is 100% like saying, “Chris Hemsorth says on the Late Show that the latest Thor movie is his best work to date”

It may or may not be true, but you can disregard it entirely. It is entirely devoid of predictive value.

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I get that ibm buying rhat is of little predictive value. It’s like listening to Irving fisher when he said stocks have reached a permanently high plateau. It meant nothing to me other than a short term pop in share price.

So it took me about 5 seconds to figure what upstream means. I get downstream is where the market is. That means niche players in upstream. I do think it would be surprising that orcl or any other company would be held hostage by rhat especially ibm. I don’t think anyone thought ibm bought rhat for Linux when they already have a strong preence in Unix operating systems so I would appreciate if you would expand on how this would impact ntnx. I’m sure ibm made it clear how rhat benefits ibm and it all has to do with cloud computing. Not Linux.

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“According to Rometty, there’s still quite a large opportunity in front of us all when it comes to companies involved in the transition to the cloud.”

Point me to a CEO that has just overseen a large acquisition and then goes on to be lukewarm about it in the next day’s press releases.

This is 100% like saying, “Chris Hemsorth says on the Late Show that the latest Thor movie is his best work to date”

It may or may not be true, but you can disregard it entirely. It is entirely devoid of predictive value


For me , the interesting takeaway from Rometty’s comments was that companies have done only the easy things on their move to the cloud. She said the heavy lifting remains to be done and that we are only 20% into the move.

Rob

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"I get that ibm buying rhat is of little predictive value. It’s like listening to Irving fisher when he said stocks have reached a permanently high plateau. It meant nothing to me other than a short term pop in share price.

So it took me about 5 seconds to figure what upstream means. I get downstream is where the market is. That means niche players in upstream. I do think it would be surprising that orcl or any other company would be held hostage by rhat especially ibm. I don’t think anyone thought ibm bought rhat for Linux when they already have a strong preence in Unix operating systems so I would appreciate if you would expand on how this would impact ntnx. I’m sure ibm made it clear how rhat benefits ibm and it all has to do with cloud computing. Not Linux."

First, the acquisition has enormous predictive value. What an executive of either company says about it does not.

Second, that’s not what upstream means in that context.

First, the acquisition has enormous predictive value. What an executive of either company says about it does not.

Second, that’s not what upstream means in that context.

Pithy and all, but it would be more helpful if you’d answer the question about how this impacts Nutanix.

Bear

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It would help if 12x had done the due diligence I suggested before following up, so I respectfully decline until then.

The answer is no to Nutanix. Red Hat just first released its HCI product less than a year ago. The product is also only intended for remote offices, ROBO as they are referenced as (yes, partially, I do not need a bloated over technical lecture on only “RO” references Remote Offices…).

This is more of a Pivotal market thing. Red Hat was never short on resources, so I don’t see IBM adding greatly to Red Hat’s R&D for HCI, but they do give a larger sales force. But then this sales force will conflict with IBM’s partnership that already exists with Nutanix.

So no.

Tinker

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For my money, Nutanix is very tangentially, if at all, affected by this purchase. RedHat doesn’t have a big presence in HCI - Pivotal’s parent, VMWare is the big player in HCI, and Nutanix’s big competitor.

This is all about the cloud native tools space - PVTL vs the new IBM+RHT

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My question is - does IBM have a track record in making acquisitions work? I don’t even know if or when they bought other companies.

If they leave Red Hat alone except for providing useful resources, it could work, but otherwise, they could screw up a decent operation.

I don’t even know if or when they bought other companies.

They buy companies all the times, mostly small companies.

In 2018 IBM acquired 3 companies
In 2017 IBM acquired 3 companies
In 2016 IBM acquired 12 companies
In 2015 IBM acquired 13 companies
In 2014 IBM acquired 4 companies
In 2013 IBM acquired 9 companies
In 2012 IBM acquired 9 companies
In 2011 IBM acquired 8 companies

Here is a link…

https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio…

Now, if you are expecting IBM to pay $34 Billion and leave Red Hat alone, you are not being realistic. IBM will try to integrate Red Hat offering into its existing line of business and that means there will be cultural, product roadmap, timeline compromises, etc. Which is expected and should be okay. If IBM imposes its culture, cost cutting, financial engineering etc, then a significant amount of premium will be written-off in due course of time.

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