Red Hat: Game Changer Or Risky Flop?
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Red Hat: Game Changer Or Risky Flop?

It remains to be seen if SAP will acquire Suse Linux to take over the whole stack - excluding hardware, naturally. This consolidation brings with it completely new challenges for SAP customers.

Experts and insiders will be reminded of Léo Apotheker in this context. While being CEO of SAP, he did not dare to use as much money as IBM for an acquisition. However, he was brave enough to do so while he was with Hewlett-Packard. As HP CEO, he bought the British software company Autonomy for 11 million U.S. dollars. What a lapse in investment!

However, at least the direction was right. HP had and still has to expand its offer towards more services and software, cue IBM.

IBM has been trying to escape the mainframe tradition. A difficult effort, but a successful one so far. Over the last couple of years, IBM has acquired various service providers and software companies. This conglomerate of different cultures, technologies and markets can make you feel rather queasy.

Big Blue did not have a big success with any of its acquisitions yet, as Microsoft, Alibaba, AWS and Google are smarter and more agile. Even IBM’s flagship Watson is becoming more of a damp squib every day. Or is Watson already dead?

Red Hat might be an exception, though. On the one hand, there is the price of 34 billion U.S. dollar. On the other hand, there is the high number of employees, 12,500 to be exact, that have to be integrated into IBM’s business processes seamlessly.

IBM has screwed up an important strategic acquisition once before. Softlayer as IBM company could have been a predecessor of modern hyperscalers like AWS, Google and MS Azure. However, the technological advantage was not enough for a dominant market position. Now, IBM wants to try again with Red Hat and a broad open source offer as well as hybrid cloud.

What does the Red Hat acquisition mean for Suse?

IBM has been trying to show the community the benefits of Hana on Power. And indeed, the combination of IBM Power hardware, Suse Linux and SAP Hana is a better recommendation than an Intel platform.

I personally believe that this combination will be the measure of every Hana performance for the next three years. The power processor is a big data machine. Nobody has invested as much love in a Linux derivative as Suse. From the perspective of the SAP community, the combination of Suse and Hana could even be seen as a perfect match.

To guarantee the future success of Suse Linux in general and the care for Hana including all anomalies and flaws, Suse needs more investors! Suse will not be able to compete with the new open source power couple that is IBM and Red Hat. These two companies have the potential to redefine the open source community in the B2B market. The goal will be a broad cloud and open source offer instead of a dominant market position with Linux.

Suse is also trying to be more than Linux. Therefore, the order of the day – and an alternative to SAP’s multi-cloud concept – is hybrid cloud. That way, IBM and Red Hat could also gain an edge over AWS, Google, Alibaba and Azure.

From the point of view of the SAP community and customers, the disadvantage of a hybrid cloud is that you must be well-versed in a lot of disciplines. Hybrid concepts require know-how of on-premise as well as on-demand systems (private, public and multi-cloud). Whoever goes a step further and starts to leverage SAP Hana Cloud Platform also has to deal with Indirect Access.

IBM and Red Hat will at least be more knowledgeable in the technological and organizational aspects of hybrid companies than any other public cloud hyperscaler, including SAP. Therefore, a future hybrid cloud concept of IBM and Red Hat could well become a game changer, but also a risky flop.

E-3 Magazine December 2018/January 2019 (German)

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N. N. (Nomen Nescio)

Nomen nescio, abbreviated to N.N., is used to signify an anonymous or unnamed person.

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