IBM has announced a $34 billion deal to buy Red Hat, a software firm specializing in open-source and cloud computing.
This move comes up as IBM seeks to diversify its technology hardware and consulting business into higher-margin products and services.
For years, IBM has focused on installing mainframe servers on clients’ premises, but in recent times, it faces dwindling revenue as more and more firms are opting to store data on the cloud.
The acquisition of red hat is by far IBM’s biggest to date, showcasing the tenacity of the CEO’s efforts to expand the company’s business away from legacy servers and position it to better compete with firms such Amazon, Google parent Alphabet, and Microsoft in the rapidly expanding cloud space.
In a statement, Rometty called the deal “a game-changer… IBM will become the world’s #1 hybrid cloud provider.”
Hybrid cloud is how IBM refers to its services that combine on-premises and cloud-based computing.
Image Credit: CNET
