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How IBM plans to make its $34 billion Red Hat deal pay off

IBM senior vice president Arvind Krishna. Photo: IBM
IBM senior vice president Arvind Krishna. Photo: IBM

IBM is announcing a series of moves Thursday designed to start recouping some of the $34 billion it just spent to buy open source specialist Red Hat.

Why it matters: IBM sees a $1.2 trillion opportunity in enterprise software, services and infrastructure by 2022. But competing effectively means being able to meet customers where they are at, says IBM senior vice president Arvind Krishna.

  • Customers, he said, are looking for the flexibility to host their own software one day, move that same setup to a cloud provider the next and still have the flexibility to change cloud providers down the road.
  • "We strongly believe there is a massive opportunity to create a common platform that goes across these clouds," Krishna said in an interview.

What's happening: Most notably, it is optimizing Red Hat's software to run on IBM's cloud and servers, and it's aiming to use Red Hat as a means to take IBM's other software into private clouds as well as rival cloud platforms from Microsoft, Google and Amazon.

Yes, but: The Red Hat deal closed only three weeks ago. Much of what IBM is announcing is actually the result of a partnership announced last year.

Separately: IBM has cut as many as 100,000 jobs over the last few years, Bloomberg reports, citing court documents.

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