IBM Buying Red Hat in $34B Mega-Deal to Beat Amazon, Google in Cloud

▤ Summary

IBM has agreed to buy open-source software maker Red Hat in a $34 billion bet aimed at helping it win the cloud computing war against Amazon, Microsoft, and Google.One of the big questions is whether IBM is giving up too much to scoop up Red Hat and accelerate its cloud computing business.The deal has a total enterprise value of about $34 billion, and IBM said it will fund the transaction with a combination of cash and debt.“Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs,” said IBM CEO Ginni Rometty in a prepared statement.IBM said Red Hat will maintain its management team and offices, and will operate as a “distinct unit” within IBM’s hybrid cloud business.

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