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Red Hat software benefits the whole company

Red Hat software benefits the whole company

BUSINESS NEWS

Red Hat software benefits the whole company


Jim Whitehurst, CEO of Redhat and Ginni Rometty, CEO of IBM discuss IBM’s acquiring Redhat.

Adam Jeffery | CNBC

IBM CEO Ginni Rometty told CNBC Tuesday she expects Red Hat will produce 2% of annual growth for the computer company’s top line in coming years.

Red Hat, she said, already has a sizable reach, but not the 175-country operation that IBM maintains.

“We grow by expanding Red Hat that way,” Rometty explained to CNBC’s Jim Cramer in a “Mad Money” interview, alongside former Red Hat CEO Jim Whitehurst. “It really is a play that helps all of IBM, as well as extends what Red Hat’s done, and then together we make it even better.”

On Tuesday, IBM closed its long-anticipated $34 billion acquisition of the enterprise software manufacturer. With the merger, IBM now offers the leading platform for the hybrid cloud, Rometty said.

“It runs not only on the IBM cloud — not only on-premise in private clouds — it runs on every other public cloud out there,” she said, “whether that’s Amazon, Microsoft, [Alphabet-subsidiary] Google. “

Red Hat’s OpenShift on-premises platform could attract more business to IBM, according to some analysts. IBM has reported three-straight quarters of declining year-over-year revenue. That follows a period of 22 consecutive quarters of decreasing revenue, which ended in 2017 with an up quarter.

“How this creates value is [by] accelerating our clients’ businesses, and that creates more value, creates more spend, for all of this,” Whitehurst said. “And so you know when I talk 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.”

Disclosure: Cramer’s charitable trust owns shares of Amazon, Alphabet and Microsoft.

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