IBM's acquisition has implications for Singapore's push for the cloud

THE fate of a mega tech acquisition deal announced two days ago in the US is likely to be followed closely in Singapore as the government prepares to embrace cloud computing in a major way. Prime Minister Lee Hsien Loong recently announced the government's intention to put public-sector services and data in the cloud.

IBM has announced that it is in the process of acquiring Red Hat, a pioneer of open-source software, in a deal valued at US$35 billion. Open source refers to software programming instructions that are open and accessible for anyone to view and edit, in contrast to more traditional software, which is proprietary in the sense that the coding is not open to scrutiny or change by outsiders.

The reason for the acquisition is to beef up IBM's cloud computing offering, particularly its hybrid cloud model. Over the past few years, the company has been left struggling in the cloud computing space as competitors Amazon Web Services (AWS) and Microsoft have surged ahead. By 2022, the global cloud computing market is estimated to be a US$338 billion opportunity. Red Hat is one of the largest distributors of Linux, an open-source operating system used to power a vast majority of corporate data centres. IBM hopes to use Red Hat's reach to tap into these corporate data centres with its cloud computing platform.