IBM, You Bought a Gem. Don't Screw it Up!

I always wondered when the day would come that Red Hat would get bought by a larger firm needing to improve its market position in the new open source, open and hybrid cloud world. That day has arrived. IBM announced today that it is acquiring Red Hat for $34 billion and positioning it as an independent business unit (my comment - for now). Congratulations to both companies and colleagues from days gone by. I worked at IBM for 16.5 years and JBoss and the Red Hat JBoss unit for 10 years. Today, I work at Rackspace.

I only have a few things to say here.

The biggest issue and opportunity with this acquisition is not technical nor even financial; it's cultural. IBM needs a cultural makeover more than anything else. Red Hat has some similarities to the old IBM of the 1960s to 1993 (mostly the good stuff and less the bad from that period - I worked in the latter period of the old IBM and the first period of the new IBM) - subscription business with almost always up and to the right steady growth, no significant layoffs, a congenial culture with light weight politics and a reward and appraisal system that encourages collaboration and team work. IBM lost all of these by the mid-1990s. Instead, a more difficult environment has taken root in IBM as documented by many others. IBM needs to get rid of its stacked ranking of employees, bell curve appraisal system, continuous layoffs, variable pay that pays out only a fraction to the top 10% and needs to understand the value of stock RSUs in Red Hat vs what it does today. If IBM takes the best of Red Hat's culture and infuses it back into IBM, this acquisition may well have been cheap and IBM's transformation may well be one of the great ones in any industry's history. OTOH, if it goes the other way and IBM "bluewashes" Red Hat.... well... life goes on.

Oh yes, there are some integration questions to answer. Linux is easy. It fits. But how does JBoss, OpenShift, OpenStack and the Mgmt Software fit into WebSphere, IBM Cloud and Tivoli or Cloud Management (or whatever it is called)? How will the sales teams work together? Will they sell JBoss Fuse on OpenShift over WebSphere Integration or IBM Cloud iPaaS when the situation calls? These remain open challenges, but relatively simple ones and perhaps not even worth worrying in the face of the cultural challenge and opportunity.

IBM, you bought a Gem. Don't Screw it Up!

From old alumnus of both companies,

Pierre Fricke