Competition is licking its chops waiting to pounce on a bloated anaconda that just devoured a wild hog.
https://www.bizjournals.com/triangle/news/2018/11/13/could-red-hat-deal-be-a-distraction-for-ibm-unisys.html
The IBM-Red Hat deal could be the “distraction” competitors are looking for.
Peter Altabef, CEO of Unisys, is one of several CEOs who talked about the deal on recent earnings calls. And he says major acquisitions like this $34 billion deal can make a company like IBM “distracted from the day-to-day efforts of their clients and winning new business and holding onto business.”
“And we frankly welcome that,” he told analysts last week.
Jennifer Hamel, an analyst with Technology Business Research, says a deal this big could certainly occupy IBM’s attention – leaving opportunities for other technology players.
“After completing the bulk of its portfolio realignment and internal transformation initiatives, IBM Services risks being placed on autopilot while IBM shifts focus to making its largest purchase ever to bolster its software and cloud portfolio,” she says. And it likely limits Big Blue’s future deals. “Given the massive purchase price and complexity of the Red Hat deal, a major services acquisition seems unlikely for IBM Services in 2019, potentially leaving open opportunities for peers to pick up smaller firms and compete more effectively with IBM Services to meet current IT services needs.”
When the deal closes – expected late next year – the addition of Red Hat’s open-source technologies will enhance IBM Services’ hybrid IT management offerings, “but this was already possible by virtue of IBM Services’ existing partnerships with Red Hat,” she notes.
“IBM will still have to compete with IT services peers such as Accenture, Atos and Wipro for related services opportunities,” she adds.
Partners of IBM and Red Hat, too, have repeatedly touted the deal’s benefits, such as Hortonworks, which recently announced a new open hybrid architecture initiative alongside both firms.
“The recent announcement of proposed merger between IBM and Red Hat really spotlights the value of hybrid architectures in this collaborative effort to build a common enterprise deployment model,” said Robert Bearden, Hortonworks' COO.
IBM and Red Hat, which announced the deal last month, have said repeatedly that the plan is to keep Red Hat’s brand and culture intact in Raleigh.