First Take: IBM's Red Hat Acquisition - Is it too late?

Red Hat logo. Source: Wikipedia

IBM is acquiring Software Company Red Hat for 34 billion USDs. It is IBM's largest acquisition ever.

According to Business Insider some of the key points are:

1. Red Hat will join IBM's Hybrid Cloud Team as a distinct unit preserving the Independence and neutrality of Red Hat's Open Source development heritage and commitment, current products portfolio and go to ,market strategy and unique development culture. 

My Take: RED Hat will continue selling its Linux Operating System and services to IBM's Cloud competitors such as Amazon, Microsoft and Google.

2. IBM will remain committed to Red Hat's Open Governance, Open Source contributions, participation in the Open Source Community and development model.

My Take: IBM is also committed to Open Source and its Cloud is based on Open Stack. with IBM's long tradition of Open Source usage and contributions it is easy for IBM to preserve Red Hat's Open Source Commitment. 

3. IBM and Red Hat also will continue to build and enhance Red Hat's partnerships including those with major cloud providers, such as Amazon Web Services, Microsoft's Azure, Google Cloud, Alibaba and more in addition to IBM Cloud.

My Take: IBM will provide services and products to its Cloud competitors. 

4. Red Hat will continue to be led by Jim Whitehurst and Red Hat's current management team...  

My Take: Red Hat's key employees will continue to work for IBM. 

5. " IBM will become the world's number 1 Hybrid Cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses" Ginny Rometty, IBM chairman and CEO, said.

My Take: IBM's target is the Hybrid Cloud market. Its strategy is to be the leading provider of that market. 

I cited only the key points which are relevant to this post's context. 

Why IBM needs to change?

More than a year ago I wrote a post titled: Vendors Survival: Will IBM Survive until 2027?

My conclusion was that IBM will probably survive, however the company's position was not as good as it was few years ago. 
IBM still earning from old Business Lines but is failing to dominate any of the the new emerging technological markets.

After 20 quarters of declined earnings Warren Buffet, a significant shareholder, sold his IBM shares.

Which of the emerging market best fits IBM?

I concluded that Cloud Computing was the best fit for IBM among the emerging markets. Unfortunately for IBM, Amazon was more innovative and is this market leader. 

Microsoft with its Azure and Satya Nadella's Cloud First was also more innovative.    

Google was the third vendor in  market share. IBM was fourth, but Alibaba leapfrogged it. 

Is the Cloud Market a single Market? 

The answer is no. There are three different markets:

1. The Public Cloud
The Public Cloud is a promise of a new model without Information Technology Infrastructure. However, there are many obstacles. Some of the obstacles are depicted in my post: Public Cloud Core Banking: Vendors Hype or Short Term Reality. 

This Market is dominated by Amazon. Microsoft owns the second larger Market share followed by Google.  Microsoft's market share is a lot larger than Google's share. Google is followed by Alibaba and IBM. 
It looks like IBM missed the opportunity to lead this market and it is too late for it to become this market leader. 

The market is based on commodity Operating Systems i.e. Windows and Linux. Red Hat is the leading Linux vendor.

You can read the third key point and My Take on the first key point and realize that IBM will continue to sell Red Hat Linux to its competitors.
It seems that IBM understands that the acquisition will not promote IBM as a leader in this market.

2. The Private Cloud
According to Forrester Research, Next Generation of of Private Clouds "will use Hybrid Infrastructure". 
Private Clouds are used by Large Enterprises. According to Forrester's survey in 2013, "67% of responders thought that access to Mainframe Data is critically important or very important in Cloud environments".

This market is not clearly defined. Forrester Research provides three different definitions of this market.

According to all definitions IBM is a significant player in this market and could become the leader of this market in the Next Generation, which will include proprietary platforms. 

This market is an improvement to a traditional market. Nothing to write home about.


3. The Hybrid Cloud
This is a combination of Public Could or Public Clouds and a Private Cloud. It is less elegant and less promising model in comparison to Public Cloud but it is more realistic model, for the following years.
It is a growing market.

The Hybrid Cloud is the "battle field" of the Cloud Computing vendors. 
Ginny Rometty, IBM chairman and CEO, is quoted in the fifth key point. She states that IBM's strategic goal is to become the leader of that market. 

Is it too late?

Could the combined forces of IBM and Red Hat and the Open Source Cloud model realize this strategic goal? It may be too late.

Could the dual strategy of coopetition by selling Red Hat's solutions to IBM's competitors differentiate IBM's solution based on Red Hat's Linux from the comptitors' solutions also based  on Red Hat's Linux?

If IBM would acquire Red Hat few years ago, it would not need to  pay 66% above Red Hat market share value. 

If IBM could be more innovative before the leading vendors emerge the probability of accomplishing this strategic goal would have been a lot higher.

How to find that a company could not care less about your Privacy?

The trade offs of the Web and Digital world are well known: Vendors do not charge Consumers for using their software products. Consumers pay by allowing advertisement content on their computers and Smart Phones screens.

Vendors such as facebook, Google and many other vendors and service providers collect and analyze personal data. 

When it comes to selling the Consumer Private Data  it is a different issue.
The Facebook-Cambridge Analytica Scandal is an example. 

I am surely do not agree with selling Customers Private Data without their explicit permission, however, I am able to understand why some employees or some companies could sell the data. The motivation is earning more money.

Not taking enough care of customers Privacy without any benefit is beyond my understanding. 

You should not trust any company for protecting your Privacy do it yourself.
It is a good practice not to publish private information, if not necessary. Your Private Data is Unforgettable
If a company deliberately not taking care of your Privacy it could not care less about it, however it is very difficult to distinguish between deliberate careless and poor design and implementation.  

Facebook Messenger in my Xiomi Smart Phone 

When someone receives a Smart Phone application message an alert sound is notifying him about the new message.
This notification method is used by applications such as SMS, Whatsapp etc.
It is also used by Facebook Messenger, however the sender's picture is stuck on the screen (you can roll it down until it will disappear). 

This feature is unique to Facebook Messenger. 
I suspect that it appears not only on Xioni's phones but on other vendor's phones as well.

This weird feature is an example of not caring about Privacy without any benefit to Facebook. 
It could be a poor design without any intention to compromise Privacy, however the bottom line is reduced Privacy. 

Nobody sitting next to you will notice an SMS or Whatsapp message sender's identity. 
Anybody sitting next to you Will see the picture appearing on the screen accompanying a Facebook Messenger message. 
He may know the sender and will be aware of some interaction between you and that sender.

After the Facebook-Cambridge Analytica Scandal Facebook should avoid of Privacy issues. Even minor issues.