Red Hat’s hot streak continues for IBM, led by OpenShift and Ansible platforms
Since IBM purchased the Raleigh open-source software company Red Hat for $34 billion in 2019, Red Hat’s revenue has jumped at least 15% every fiscal quarter. The final three month-period of 2022 was no exception, IBM announced Wednesday, as Red Hat reported another 15% revenue increase from October through December.
And while not all the news out of IBM’s latest earnings call was positive — the company said it will cut 3,900 jobs and its stock sank following lower-than-predicted cash flow figures — Big Blue executives once again trumpeted the performance of Red Hat’s software and consulting operations.
Jim Kavanaugh, IBM’s chief financial officer, highlighted the “strength” of two specific Red Hat technologies — OpenShift and Ansible.
Developed in 2011, OpenShift is a hybrid cloud platform that allows customers to create, use and manage applications.
“Red Hat has always stood for choice and flexibility, and that is something we see resonating strongly with customers at a time when they want to build and run any app, anywhere.”
According to IBM, OpenShift generates $1 billion in annual recurring revenue.
Ansible is an automation platform Red Hat acquired in 2015 that is now available on both Microsoft’s and Amazon’s cloud services platforms.
Automation is increasingly a strategic imperative for customers, whether they are looking to optimize resources, reduce downtime or improve security. Automation removes the burden of manual tasks that can weigh teams down, freeing up capacity to do more strategic work, which is driving a lot of interest in Red Hat Ansible Automation Platform.
Red Hat success amid IBM cuts
Founded in 1993, Red Hat is among the world’s leading open-source software companies. While anyone can freely access its open-source software, the company sells subscriptions for consulting and security services.
In addition to touting Red Hat’s software technologies, Kavanaugh and IBM CEO Arvind Krishna also praised Red Hat’s consulting operations during Wednesday’s call, mentioning the consulting division had worked on Amazon Web Services.
According to Wake County Economic Development, IBM employs 9,000 people in the Triangle-area, with an additional 2,000 Red Hat employees at the open-source company’s downtown Raleigh headquarters.
The sale of Red Hat to IBM was among the largest software acquisitions in history. In their agreement, IBM pledged to respect Red Hat’s neutrality by not interfering with its open-source model and to allow Red Hat to sell services to IBM’s competitors.
On Wednesday, IBM announced it would cut around 3,900 jobs, joining the list of big technology firms to recently lay off employees. The company has informed The News & Observer that the cuts were concentrated on two spinoff entities, Kyndryl and Watson Health.
It did not confirm whether any Triangle-based employees might be affected.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
This story was originally published January 26, 2023 at 1:29 PM with the headline "Red Hat’s hot streak continues for IBM, led by OpenShift and Ansible platforms."
