IBM's Bob Lord: Red Hat Acquisition Makes IBM the Top Hybrid Cloud Provider

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November 13, 2018

By Chloe Aiello

Move over, Watson.

Hybrid cloud computing is now the name of the game at IBM, thanks to the company's recent acquisition of Red Hat.

"We are going to be the company that is providing enterprise-ready hybrid cloud solutions and actually create the foundation of the infrastructure of the future," IBM's ($IBM) chief digital officer Bob Lord told Cheddar on Tuesday.

IBM's Red Hat ($RHT) acquisition will be a game-changer for the information technology giant ー and it better be, at a $34 billion price tag. The deal, which is IBM's largest ever and the third biggest deal in tech, is expected to close at the end of 2019. It's been less than one month since IBM announced the acquisition, but executives like Lord are already suggesting it will be revolutionary.

"With Red Hat, we now become the number one largest provider of hybrid cloud solutions in the world," Lord said, "which is really important for all our enterprise clients." He said the deal also means that IBM is doubling down on open source and "committing to the developer community that these tools are something that they are going to be able to use and have impact on the world."

"Hybrid cloud" refers to a computing environment created from a mix of public and private cloud infrastructure ー and more secure on-premise infrastructure, like data centers. Red Hat is a leading distributor of open-source technology for enterprise, and is especially well-known for its Linux operating system. Aside from giving IBM a major boost in open-source technology and hybrid cloud infrastructure, Lord said the acquisition will help grow earnings and revenue.

"The Red Hat Acquisition is accretive within the first 12 months, and it is clearly going to help our growth ... because as I said we are going to be ... focused on our enterprise clients and giving our enterprise clients a comprehensive solution on how to migrate to the cloud to get the competitive advantage," Lord said.

Some of those aforementioned clients include major banks and health-care industry players who still cling to outdated on-premise computing solutions, Lord said. IBM's latest obsession with hybrid cloud doesn't mean it's any less focused on its other projects, including its widely-touted artificial intelligence, Watson. But Lord emphasized the computing infrastructure is especially important because "Watson and other technology solutions will plug right into the top of that."

And IBM's ambitions are nothing to dismiss. Taking the top spot in hybrid computing won't be easy ー IBM will be up against some stiff competition, including Microsoft ($MSFT), Amazon ($AMZN) and Alphabet's ($GOOGL) Google.

For full interview click here.