The Arctiq team with Red Hat Canada president Luc Villeneuve. Photo by Alex Coop.

Published: November 20th, 2018

Business opportunities today rarely involve IBM Corp. software, says Kyle Bassett, with only a few IBM-loyal customers using BlueMix (now part of IBM Cloud) requiring his company’s services. But after the largest software acquisition to date, Bassett, partner at Arctiq: Intelligent Solutions, expects that to change.

“They’ve got some incumbent relationships with some larger customers that we’ve worked with that have used Bluemix,” Bassett told CDN. “But IBM in the whole cloud space hasn’t been too successful.”

Arctiq, a Toronto-based services-led solution provider, supports customers with DevOps consulting, automation and container technologies. It has a deep relationship with Red Hat and has grown its business significantly in the last two years, a growth largely tied to Red Hat’s dedication to open source and container technologies such as OpenShift and Ansible. Gartner says by 2020, more than 50 per cent of global populations will run containerized applications in production, up from less than 20 per cent today.

While Bassett is unsure what IBM’s strategy is going to be moving forward – although Jim Whitehurst, president and CEO of Red Hat, has said Red Hat will remain a distinct unit in IBM – what is certain is that Big Blue now has access to Red Hat’s “crown jewels.”

“Now they’re going to have their hands on OpenShift and Ansible,” says Bassett. “They’ve acquired the maturity around Kubernetes and they might be able to turn that around into some type of service offering.”

 

IBM is playing catch up with other cloud providers, says Steve White, vice-president of worldwide channels and alliances research for IDC. But it’s not too late for it to turn the ship around, and Red Hat might be the answer, he adds.

“There are still a lot of customers that are on the outside looking in on cloud and open source,” says White, noting IBM and Red Hat’s 20-year relationship as partners has laid a strong foundation for whatever comes next. It also provides Red Hat partners with significant opportunities to scale their business.

“And if you’re an IBM partner, it’s another arrow to the quiver and added relevance when it comes to hybrid cloud,” he says.

Red Hat Canada president Luc Villeneuve has helped the Red Hat business increase its revenue fourfold since his arrival in 2013. Villeneuve says he expects that number to keep going up by the time the deal is finalized next year.

“IBM is very well connected at the executive level in areas where we might not be,” he explains. “They are going to help cover that gap for me.”

Every conversation Villeneuve has had with executives from both companies has led him to believe that Red Hat is going to be left alone once the mega-deal closes, he adds.

“[Red Hat] has had 64 straight quarters of positive growth. That’s success you don’t want to break,” he told CDN.