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Bloomberg
IBM closed its $34 billion purchase of Red Hat, sealing the world’s second-largest technology deal ever and setting up the iconic US technology company on a path to try and compete with top software purveyors in the cloud.
The 108-year-old International Business Machines Corp, once synonymous with mainframe computing, has been struggling to adopt cloud-related technologies and is playing catch-up to market leaders Amazon.com Inc and Microsoft Corp in offering computing and other software and services over the internet.
For Chief Executive Officer Ginni Rometty, who has staked her legacy on the deal designed to save the company from irrelevancy, it is a defining moment.
IBM’s cloud revenue has grown to 25 percent of total revenue now, from 4 percent in 2013, the Armonk, New York-based company said. In the 12-months through the first quarter of this year, IBM cloud revenue grew to more than $19 billion. The Red Hat acquisition is expected to contribute about 2 points of compound annual revenue growth to IBM over a five-year period, the company said.