We’ll see more big deals like IBM’s purchase of Red Hat next year. Here’s why: The big enterprise tech companies are losing market share to the cloud, so they are looking to buy back the market share they are losing. In this case, IBM is trying to grow its hybrid cloud business.
Indeed, cloud computing is eroding big enterprise tech providers’ profitability by removing hardware and software from enterprise data centers. Although many promote cloud computing, it’s the traditional stuff where they make their big margins.