How much are open source companies worth?
Well, in the case of Red Hat, that number would be $34 billion.
IBM just bought Red Hat at a 60% premium over the open source giant's current stock price.
Why such a premium? We're pretty sure IBM leaders must have asked Watson.
"The acquisition of Red Hat is a game-changer. It changes everything about the cloud market," said Ginni Rometty, IBM Chairman, President, and Chief Executive Officer, in a statement on the purchase.
"Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs," she said. "The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales."
And Red Hat leadership had quite a bit to say as well.
"Open source is the default choice for modern IT solutions, and I'm incredibly proud of the role Red Hat has played in making that a reality in the enterprise," said Jim Whitehurst, President and CEO of Red Hat. "Joining forces with IBM will provide us with a greater level of scale, resources and capabilities to accelerate the impact of open source as the basis for digital transformation and bring Red Hat to an even wider audience—all while preserving our unique culture and unwavering commitment to open source innovation."
Will these rosy predictions come true?
The answer, we're guessing, is in the cloud.
