IBM realized years ago that it would never be able to compete with the big three of Amazon, Microsoft, and Google, so it made the sensible decision to move away from trying to be a pure cloud infrastructure seller. Since then, it has transitioned to assisting IT departments in managing intricate hybrid settings, leveraging its financial power to buy a portfolio of well-known businesses.
The business started this trend with the $34 billion acquisition of Red Hat in 2018, followed by the acquisition of Apptio in the previous year, and it continued on Wednesday when it declared that it would be purchasing cloud management vendor HashiCorp for $6.4 billion.
Big Blue acquires a collection of cloud lifecycle management and security solutions from HashiCorp, along with a business that is expanding far more quickly than any of IBM's other ventures. Revenue from HashiCorp is modest by IBM standards, coming in at $155 million in the most recent quarter and climbing 15% from the same period last year. In spite of this, IBM is still making a profit and expanding its line of hybrid cloud technologies.
Arvind Krishna, the CEO of IBM, acknowledged the importance of this component to his company's hybrid approach and included a reference to artificial intelligence (AI) just for kicks. "HashiCorp has a track record of helping customers handle the intricacy of today's application sprawl and infrastructure.
A comprehensive hybrid cloud platform built for the AI era will be created by fusing HashiCorp's skills and talents with IBM's portfolio and experience, the company stated in a statement.
When HashiCorp modified the open-source Terraform tool's license to be more favorable to the business last year, it made headlines. Outraged, the community that contributed to the creation of Terraform created a new open-source substitute known as OpenTofu.
When the OpenTofu fork was developed, HashiCorp recently accused the new community of abusing Terraform's open source technology. It will be fascinating to watch if the company continues down this path of thinking now that it is a part of IBM.
Recall that Red Hat also made news last year when it altered the terms of its open source license, which infuriated the open source community. It's possible that these businesses will work well together given their divergent perspectives on open source and software.
With the introduction of the Infrastructure Cloud just this week, the business unveiled a new platform concept that ought to work well with IBM's hybrid cloud product lineup.
They didn't really provide any functionality, but they did bring all of the services under one roof, which made it simpler for marketing and sales to show them to clients.
Within the IBM product family, HashiCorp would continue to be independent if IBM handled the company similarly to how Red Hat is treated. According to Tim Crawford, the former CIO of AVOA, the corporation would be wise to maintain its neutrality.
"I would be concerned if IBM shifted its focus to IBM Cloud and abandoned Hashicorp's impartial approach to collaborating with various cloud providers. Crawford recently posted a blog post titled "I suspect that would not be the case as IBM has recently shown how they are more open with other cloud providers."
After raising around $350 million since its founding in 2012, HashiCorp went public in 2021.
