Revenue continues to decline in that business year after year - it was down more than 17 percent last year, and this year, it will be worse. The problem is nobody wants to buy new mainframes or big iron UNIX boxes. It's too risky and entangled.Īlso: Red Hat business as usual: Fedora 29 released
And small and medium-sized SIs staffed with ex-IBMers who know that stuff most certainly won't do it. Oracle doesn't want to do it (frankly, it wouldn't even if it knew how). Microsoft certainly doesn't want that work. Those workloads aren't going to leave where they are sitting or without being completely or partially re-written, and that is a monumental task. Sure, a lot of new application development went into open source and to Wintel, but there are still tons of legacy workloads running on the mainframe and AIX. Take IBM's mainframe and big iron UNIX systems business, which has become clobbered by client-server systems in the last 20 years. It needs new sources of revenue, badly.Īlso: IBM Cloud Private for Data preps Red Hat OpenShift certification, queryplex search toolīut IBM cannot become just another cloud infrastructure player like AWS, Azure, Google Cloud Platform, or even Oracle Cloud for that matter. Those big strategic outsourcing deals and big hardware maintenance contracts the company has traditionally depended on are not growing on trees like they used to. Despite the Raleigh, N.C.'s company's roots in Linux and open source, the motivation for the acquisition is entirely cloud-focused.īig Blue's is desperate to make itself relevant to customers that are increasingly looking to Amazon Web Services and Microsoft Azure as green fields of choice for new cloud-based applications and also business continuity services, which is a big part of IBM's datacenter bottom line. Indeed, their recent $34 billion purchase of Red Hat is a big step in the right direction. After that bloodletting is done, it needs to make some important choices.
However, it's going to have to become a much smaller and much more agile company in order to get healthy. So, the company has more bloodletting to do, and it has engaged in quite a bit already in the last year or so. Also: Red Hat's only business plan is to keep changing plans
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