TECHnalysis Research Blog

August 6, 2019
IBM Leveraging Red Hat for Hybrid Multi Cloud Strategy

By Bob O'Donnell

While it’s easy to think that moving software to the cloud is old news, the reality in most businesses these days is very different. Only a tiny fraction of the applications that companies rely on to run their day-to-day operations operate in the cloud or have even been modernized to a cloud-native format.

In fact, at a recent cloud-focused analyst event, IBM pointed out that just 20% of enterprise applications are running in either a public cloud (such as AWS, Microsoft Azure, Google Cloud Platform, etc.) or private cloud. And remember, this is nearly fifteen years after cloud computing services first became publicly available with the launch of Amazon’s Web Services. It stands to reason, then, that the remaining 80% are old school, legacy applications that are potentially still in need of being updated and “refactored” (or rewritten) to a modern, flexible, cloud-friendly format.

This opportunity is why you see most enterprise-focused software companies still spending a great deal of time and money on tools and technologies to move business software to the cloud. It’s also one of the main reasons IBM chose to purchase Red Hat and is starting to leverage that company’s cloud-focused offerings. IBM has a very long history with enterprise applications through both its software and services businesses and, arguably, probably has more to do with the enormous base of traditional legacy business applications than any other company in existence.

To IBM’s credit, for several years now, it has been working to modernize the organization and its offerings. A key part of this has been an emphasis on cloud-centric services, such as its own IBM Cloud, as well as tools and services to migrate existing applications to the cloud. Red Hat’s OpenShift, which is an open source version of a Kubernetes-based container platform (a technology that sits at the heart of most cloud-native applications), is an essential part of that cloud-centric strategy.

Specifically, OpenShift, along with IBM’s new CloudPaks, can be used to help modernize legacy applications into a containerized, cloud native form, then deployed either in a private cloud, such as behind the firewall of a company’s own on-premise datacenter, in a hosted environment, or in one of several public clouds, including IBM’s own cloud offering. What makes the latest announcements most compelling is that OpenShift is widely supported across all the major public cloud platforms, which means that applications that are written or rebuilt to work with OpenShift can be deployed across multiple different cloud environments, including Amazon AWS, Microsoft Azure, Google Cloud Platform, IBM Cloud, and Alibaba.

In other words, by building the tools necessary to migrate legacy applications into a format that’s optimized for OpenShift, IBM is giving companies an opportunity to move to a hybrid cloud environment that supports public and private cloud, and to leverage a multi-cloud world, where companies are free to move from one public cloud provider to another, or even use several simultaneously. This hybrid multi-cloud approach is exactly where the overall enterprise software market is moving, so it’s good to see the company moving in this direction. To be clear, the transition process for legacy applications can still be long, challenging, and expensive, but these new announcements help continue the evolution of IBM’s cloud-focused positioning and messaging.

Of course, IBM also has to walk a fine line when it comes to leveraging Red Hat, because Red Hat is widely seen as the Switzerland of container platforms. As a result, Red Hat needs to reassure all its other cloud platform partners that it will continue to work equally well on them as it does on IBM’s own cloud platform. To that end, IBM is very clear about maintaining Red Hat as a separate, independent company.

At the same time, IBM clearly wants to better leverage its connection with Red Hat and made some additional announcements which highlight that connection. First, the company announced it was bringing a cloud native version of OpenShift services to the IBM Cloud, allowing companies that want to stay within the IBM world a more straightforward way to do so. In addition, the company announced it would be bringing native OpenShift support to its IBM Z and LinuxONE enterprise hardware systems. Finally, the company also debuted new lines of Red Hat-specific consulting and technology services through the IBM services organization. These services are designed to provide the skill sets and training tools that organizations need to better leverage tools like OpenShift. The journey from legacy applications to the cloud doesn’t happen overnight, so there’s a tremendous need for training to get businesses ready to make a broader transition to the cloud.

Of course, even with all the training and tools in the world, not all of the remaining 80% of traditional legacy enterprise applications will move to the cloud. For many good reasons, including regulatory, security concerns, and unclear ROI (return on investment), certain applications simply won’t become cloud native anytime soon (or ever). There’s no doubt, however, that there is a large base of legacy software that is certainly well-suited to modernization and adaptation to the cloud. Not all of it will be able to leverage the new IBM and Red Hat offerings—there are quite a few aggressive competitors and other interesting offerings in this space, after all—but these moves certainly highlight the logic behind IBM’s Red Hat purchase and position the company well for the modern hybrid multi-cloud era.

Here's a link to the column: https://techpinions.com/ibm-leveraging-red-hat-for-hybrid-multi-cloud-strategy/57487

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.