IBM CEO Rometty's 5 Boldest Statements On Closing The $34 Billion Red Hat Acquisition

‘This deal not only does accelerate our revenue, it resets the whole cloud landscape,’ says IBM CEO Ginny Rometty.

Rometty On Red Hat

IBM took charge of Red Hat this week, closing its $34 billion blockbuster acquisition of the world's leading provider of open-source software.

To share insight on the road ahead, IBM CEO Ginny Rometty hit the airwaves along with Red Hat’s Jim Whitehurst. She discussed the implications of the deal for her company and the industry as a whole with CNBC's “Mad Money” host Jim Cramer.

"This is redefining the cloud landscape," she said.

"This is really Chapter 2 of the cloud. Many people thought everything was going just to the public clouds, but that's really not what the clients need."

Hybrid Cloud

The deal has been touted from its inception as all about dominating hybrid cloud. Rometty elaborated on that point on CNBC.

"This deal not only does accelerate our revenue, it resets the whole cloud landscape. This is it, the hybrid cloud as the destination architecture for the future."

"Together [IBM and Red Hat] have the leading platform for the hybrid cloud. That means it runs not only on the IBM cloud, not only on-premises and private clouds, it runs on every other public cloud out there, whether that’s Amazon, Microsoft, Google, whoever it is, it now runs on those as well, so that extends our reach into those clouds."


While IBM is a competitor of the public cloud leaders, Red Hat is often a partner that enables adoption of those hyper-scalers. That won't change, Rometty said.

"When I've talked to Microsoft or Amazon, they're excited about this, because they say, ‘Hey, if more workloads are running on OpenShift, OpenShift runs on my cloud, that gives me a greater growth opportunity.’"

Private Cloud

Rometty addressed her company's relationship with private cloud leader VMware, both a partner and competitor of Red Hat.

"IBM has done more porting of VMware to the cloud than anyone else, and to the IBM cloud."

"We will absolutely provide the best platform running on every other cloud out there. Our clients want one platform that transcends all of this. We grow as those other clouds grow, we grow as our cloud grows, we grow as clients put in private clouds. For IBM, and our clients, it's the best of all worlds. On one hand they're partners, on another hand we'll compete appropriately."

Service Side

IBM is a massive provider of technology consulting services around its own products and those from other vendors.

"I have a big services business. They do multi-cloud work, they have to, every client's got five to 15 clouds. That's why this isn't winner take all. This will be managing these kinds of environments, and nobody does it better than us."

Trillion-Dollar Market

Rometty said the industry is entering Chapter 2 of the cloud.

"Chapter 1, they put a lot of client innovation out there. Think of it as front ends of many systems, but then they bash into these back ends of all their current IT, and that has to be modernized."

"That’s 80 percent of the workload still out there, mission-critical work. We are the only one that has a hybrid, multi-cloud platform based on open source, which really simply means for a client, ‘I have an existing house, I can renovate it piece by piece, I can write something once and put it on any cloud, public or private, that I want.’ So that addresses their skill issue, their flexibility issue, regulations, data , everything."

"That is really multi-cloud, so the IBM cloud, it can be Google, Amazon, Microsoft, private, public, and that’s what somebody needs, now that is a trillion-dollar emerging market out there."