(upbeat music)
- The landmark acquisition of Red Hat,
that is a clear milestone in IBM's strategy.
What drove that?
- It is, and I'd say it represented the start
of what we call our "hybrid cloud and AI strategy."
If you look at IBM before the acquisition of Red Hat,
it sat in a place where I'd say arguably
it had a few different strategies running in parallel.
So we had the Watson Health business
in the health care space.
We had a managed infrastructure business
and we had the rest of IBM. And those different paths
didn't have a logical connection point often
in the face of a client.
At the same time, there was this problem emerging
for our clients, and kind of circa when the thinking
on Red Hat, you know, circa 2015-16 was emerging,
there was this reality emerging
that clients were finding that they had,
their IT had always run into data centers.
They were getting onto clouds, but there were clients
that were deliberately moving onto multiple clouds.
And so there's this path of increasing heterogeneity
inside the enterprise and it was creating a real tax
on innovation and operating expenses.
So the combination of, you know,
a company that was trying to find a strategy
paired with massive difficulties for our clients
and a technical solution that actually unlocked value,
because that open source layer could then be
the abstraction layer that ran across that heterogeneity,
and Red Hat was the leader in that space.
So I think now you stand back a few years later
and luckily for us, you know,
a lot of the vectors have moved in the right direction
so that all those bets that that acquisition was premised on
really have paid off.
So you take what was, still is, the biggest acquisition
in the history of software and now it looks like a steal
with all the benefit it's driven for IBM.
(upbeat music)