What IBM’s Acquisition of Red Hat Means for Salesforce Customers

October 30, 2018

On Sunday, October 28th, IBM announced its acquisition of Red Hat, the leading provider of open source software solutions, including the Red Hat Enterprise Linux operating system, as well as other technologies commonly used in data centers. IBM and Red Hat’s partnership predates the acquisition, spanning the past twenty years, with IBM supporting Linux early on to help develop and grow enterprise-grade Linux, and more recently, to bring enterprise Kubernetes and hybrid cloud solutions to customers. These innovations have become core technologies within IBM’s $19 billion hybrid cloud business. Following the acquisition, Red Hat will become a unit of IBM's Hybrid Cloud division. To find out more about this important acquisition, and specifically what it means for the Salesforce ecosystem, we talked to Bluewolf’s Chief Platform Officer Steve Faris.

What does IBM’s acquisition of Red Hat signal about cloud adoption within the enterprise?
More and more, enterprises are recognizing the advantages of the cloud’s interoperability, agility, and flexibility. However, I believe, and research indicates, that the move to the cloud in most enterprises is still in its early days. This acquisition signals that we are about to enter an acceleration phase, especially when you look at the migration of legacy apps to the cloud. IT organizations are looking to the cloud and “as a service” vendors in order to leverage its inherent agility, built in innovation, and cost benefits. CIOs and IT leaders ultimately need to engage with an ecosystem of platforms to support its end-to-end business, and achieving a competitive advantage will depend on how well and how fast their platforms are able to adapt to the shifting marketplace. In order to take that next step, enterprises needs to work with companies who offer technologies that enable them to assemble hybrid clouds, support open interfaces and standards, and mix and match best of breed solutions for cloud workflows.

What is the value of a hybrid cloud model and what does it mean for Salesforce customers specifically? Public and private?
A hybrid cloud model uses a mix of on-premises, private cloud and third-party, public cloud services with orchestration between the two platforms. The value is deployment flexibility – physical, virtual, or cloud – and the ability to incorporate legacy systems, applications, and data to take advantage of investments companies have already made. Overall, organizations really want flexibility with the best-in-breed capabilities that cloud platforms provide, and they want it at an attractive price – without being locked in. Within reason, they want to select the right cloud for the job and that means making big bets on a small number of cloud platforms, and tucking one or more clouds around them to run complementary workloads. This acquisition further validates the trend to adopt cloud and hybrid public/private cloud architecture for mission critical apps. For Salesforce customers, this enables seamless access to information, especially customer information for personalization, inside and outside of Salesforce, to and from corporate apps, with more of those apps in the cloud, where data is easier to access and share. Salesforce is built for managing data in the cloud – to ingest data, duplicate, cleanse, and make it available to both CRM applications and 3rd party apps. As customers move to the cloud, they’re looking for a new anchor application for their data in the cloud - new systems of record - to orchestrate applications for personalization, to leverage AI for intelligent processing and next best action, and to optimize customer experience. Salesforce is that mature, reliable, secure foundation, making customer data available across all of Salesforce’s clouds - Sales, Service, Marketing, Communities, Analytics, etc. - and to other enterprise apps in the cloud for creating personalized experiences.

Is there a connection between Salesforce and Red Hat?
Salesforce has been expanding its use of Red Hat Enterprise Linux as a key part of its infrastructure since 2013, running upwards of four nines of reliability. Similarly, Red Hat is a Salesforce customer. Red Hat and Salesforce both agree that the dominant enterprise platforms of the future will be Hybrid Cloud, and will feature a combination of IaaS, PaaS, and SaaS capabilities. Red Hat’s expertise is primarily in enabling IaaS and PaaS, whereas Salesforce offers SaaS applications complemented by PaaS for very specific needs.

Like Salesforce, Red Hat is an open source platform – Why is that important?
It is becoming increasingly clear that open source is the modern foundation for software infrastructure. Its community-driven approach allows clients to take advantage of the collective efforts of many hundreds or even thousands of developers to build software faster and deploy with fewer issues. Put simply, open source is valuable because it accelerates innovation. This acquisition allows for constant technology improvement and the ability to bring new cloud-native business applications and capabilities to market more frequently.

IBM research has determined that most enterprises already have 5+ clouds – What does that mean for IT leaders today?
Enterprise IT decision makers don’t have the luxury of trying out one platform after another – there’s only so much time, money, and resources they have to make bets. Enterprise architecture typically requires making a big bet on one or two platforms for mission-critical systems (Systems of Record), complemented by (often open source) infrastructure platforms running different kinds of workloads (Systems of Engagement or Differentiation). Originally, IT leaders invested heavily in ERP. Over time, as the Internet and advanced user interface technologies proliferated, new Systems of Engagement built on SaaS platforms like Salesforce sprang up to replace legacy interfaces. These platforms were also agile to leverage data more rapidly, using it for personalization and to optimize both customer and employee experience. Now, with the shift to the cloud, we have systems of engagement moving to cloud along with ERP. Salesforce is the big bet enterprises are making as an engagement layer to deliver against customer data, enabling customer experience to be the focus within every corner of the enterprise, across a multi-cloud infrastructure. Customers can “tuck in” other workload types running on other clouds - we call this “mixed” cloud apps - where necessary, enabling a true “best cloud for the job” capability with Salesforce at the core.

How does IBM’s cloud solution set stack up against other other players?
IBM now offers the leading hybrid cloud platform on the market. But more importantly, they also offer an unmatched global services organization to help customer architect their environments by integrating IBM offerings (IaaS, PaaS) with Salesforce (SaaS, PaaS), SAP (SaaS), and other industry leaders. IBM’s strengths include leadership in technology (both its own and others), deep industry knowledge, expertise, and IP, and services that help organizations put all of their assets to work, orchestrating around a company’s core objectives. IBM is uniquely positioned to help enterprise customers bring together all the knowledge from different containers, security, management, and cloud platforms. Whatever the components are, IBM is a single service provider to span all of those domains.

What does the future look like?
Companies are seeking an open and secure way to move their businesses to the cloud. IBM and Red Hat will be strongly positioned to address portability of data and applications across multiple clouds, data security in a multi-cloud environment, and accelerate hybrid multi-cloud adoption. Together, they will help clients create cloud-native business applications faster, drive greater portability and security of data and applications across multiple public and private clouds, all with consistent cloud management. IBM is steadily aiming to become the largest infrastructure provider for the hybrid cloud, and primary supplier to public clouds. Learn more about IBM’s unique advantage for Salesforce customers on our website.

Learn more about IBM’s unique advantage for Salesforce customers on our website.

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