IBM's Red Hat acquisition moves forward

The Department of Justice has approved IBM's acquisition of Red Hat. Since IDC thinks Red Hat Enterprise Linux alone is expected to contribute to more than $10 trillion worth of global business revenues in 2019, IBM's $34 billion acquisition of Red Hat is looking better than ever.
Written by Steven Vaughan-Nichols, Senior Contributing Editor

Just ahead of Red Hat Summit in Boston on May 3, the US Department of Justice concluded its review of IBM's proposed Red Hat acquisition and essentially approved the IBM/Red Hat deal. This means the IBM/Red Hat acquisition is still on track for the second half of 2019.

At Red Hat Summit, Red Hat released the results of a commissioned IDC study, which concluded software and applications running on Red Hat Enterprise Linux (RHEL) are expected to contribute to more than $10 trillion worth of global business revenues in 2019.

That's about 5% of the worldwide economy for those of you following at home.

Oh, and you read that right. It's "trillion"with a "t" -- not "billion" with a "b".

By this the IDC means the software and applications running on RHEL will "touch" $10 trillion of business revenue this year and grow at twice the rate of the economy. Business revenue will top $188 trillion.

So, what does 'touch' mean? For 2019, IDC has estimated global business revenue of $188 trillion. Of this, IDC estimates that at least 40 percent use software. For 2019, IDC has estimated the total  IT "footprint" at $81 trillion. Now, consider all that software has to run on an operating system -- and much of the software "touching" enterprise functions run on servers. IDC knows Linux runs more than half of all servers. Of those, RHEL accounts for around 25% of deployed corporate server Linux operating systems. Do the math.

So, those trillions represents not just Red Hat's influence on the global economy, but how Linux is dominating all of IT. As Cushing Anderson, IDC VP of business consulting said: "As the world's leading enterprise Linux platform, Red Hat Enterprise Linux fuels these operations and more, touching trillions of dollars of global business revenue, creating hundreds of thousands of jobs and opening tens of billions of dollars in opportunities to ecosystem partners."

How does Red Hat do this? The research found that RHEL is most frequently used for enterprise management and production (26%), IT infrastructure (20%), and customer relationship management (18%). In each workload, customers see an increase in revenues from using RHEL, a decrease in expenses, and/or an increase in employee productivity.

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  • Drilling down, surveyed IT executives said RHEL was:

    • Reducing the annual cost of software by 52%.
    • Reducing the time IT staff spend doing standard IT tasks by 25%.
    • Reducing costs associated with unplanned downtime by 5%.

    Oh, and if you're wondering how RHEL works for your personal bottom line rather than the corporate balance sheet, IDC found that, by the end of 2019, the RHEL ecosystem will directly employ nearly 900,000 workers, with an additional 236,000 jobs added through 2023. Additionally, RHEL-focused IT professionals working within customer organizations -- defined by IDC as IT professionals who work with the software, hardware, and services stacked on RHEL -- is estimated at 1.7 million worldwide and 2.1 million by the end of 2023.

    You know what? Maybe it is time to become a Red Hat Certified Engineer (RHCE).

    Whether you buy "trillions" of dollars of influence, there can be no question that Red Hat and Linux are both the present and future of business computing.

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