News & Insights for the AI Journey|Sunday, July 21, 2019
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IBM Unveils Hybrid Cloud Deals, Red Hat OKs Acquisition 

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Red Hat shareholders approved the open-source leader’s acquisition by IBM this week, likely clearing the way for the mega-deal to close by the end of this year.

IBM (NYSE: IBM) also announced separate cloud partnerships with Juniper Networks and Vodafone. A $325 million deal with Juniper Networks will help shift the networking vendor’s IT infrastructure to the cloud. On Thursday (Jan. 17), IBM announced it would work with Vodafone Business to launch a 5G AI effort in Europe.

Taken together, the transactions are part of IBM’s drive to become the leading hybrid cloud provider as it targets what CEO Ginny Rometty argues is the 80 percent of core business applications that have yet been moved to cloud platforms.

IBM said its $34 billion acquisition of Red Hat remains on track. “IBM and Red Hat (NYSE: RHT) will be strongly positioned to lead in hybrid cloud, addressing growing demand for companies to securely move their business applications to an open, multi-cloud environment,” said Steve Robinson, who is overseeing IBM’s $34 billion acquisition of Red Hat.

“The approval by Red Hat shareholders for IBM to acquire Red Hat is an important step in the closing process for this acquisition, which we continue to expect will close in the second half of 2019,” Robinson added.

The hybrid cloud partnership with Juniper Networks (NYSE: JNPR) includes managing its existing infrastructure, applications and IT services as the networking vendor shifts its operations to the cloud. Juniper Networks also said it would use IBM’s automation and cognitive tools for application management as it moves to a cloud-native posture.

The partners said the goal was to use IBM’s Watson capabilities to “generate more value from existing infrastructure.

Meanwhile, the partnership with wireless vendor Vodafone (NASDAQ: VOD) expands on earlier collaboration to advance 5G wireless across Europe along with AI, edge computing and software-defined networking technologies. The eight-year, $550 million (€480 million) partnership would combine Vodafone’s 5G, Internet of Things and edge computing expertise with IBM’s multi-cloud platform as the mobile carrier leverages the new wireless standard to link sensors and other IoT devices.

Rometty again stressed that the collaboration would help Vodafone shift “critical business applications” to the cloud, ranging from agriculture to retail. The goal is to ensure data and enterprise applications can be moved between different cloud platforms.

The partners said their new venture would be up and running during the first half of 2019.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).

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