IBM has entered into an agreement to acquire the open-source cloud software firm Red Hat for an estimated US$ 34 billion (£27 billion).
The all-cash stock deal has already gained approval from both companies board, but still must pass muster with Red Hat’s stockholders and the proper regulatory agencies. It is expected to close in the latter half of 2019, the companies said.
"Together, they will help clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management," the companies said in a joint press release.
Once completed the acquisition will make IBM the world’s number one hybrid cloud provider, said Ginni Rometty, IBM’s chairman, president and CEO.
The plan now in place will have Red Hat being operated as a distinct unit within IBM’s hybrid cloud team while maintaining its own corporate culture and facilities.
Maintaining security in cloud environments has been a major issue for many cloud providers, primarily due to misconfigured servers. IBM and Red Hat have not yet addressed the security aspect of the deal, but SC Media has queried the firms on the topic.
However, one industry executive sees no security issue arising with the merger.
"IBM cloud is a highly secure cloud. It has encryption at rest, and is very much locked down. Red Hat also is known for having very good security protocols in all their products. I wouldn’t expect any security issues around the merger with IBM," Todd Matters, co-founder and Chief Architect at Rackware.e