Genuine question: how did the IBM acquisitions of Red Hat and HashiCorp turn out?
For Red Hat, there's no longer an official "public" distribution of RHEL, but apart from that they seemingly have been left alone and able to continue to develop their own products. But that's only my POV as a user of OSS Red Hat products at home and of RHEL and OpenShift at work.
CentOS Stream employs a rolling-release model, which is much less stable than RHEL.
The previous main selling point of CentOS was bug-for-bug compatibility with RHEL. Red Hat is just killing the distro by moving their focus to a non-existent market. Enthusiasts will choose RHEL, while enterprises would choose the more stable RHEL, which Red Hat could earn money from, or alternatives like Alma or Rocky.
CentOS Stream has major versions and EOL dates, and thus is not a rolling release. It functions as the RHEL major version branch and follows the RHEL compatibility rules, so it's the same major version stability as RHEL.
While you may have considered bug-for-bug compatibility the main feature, it was a major point of frustration for many users and the maintainers. That model means you can't fix any bugs or accept contributions from the community. CentOS finally fixed both problems by moving to the Stream model.
One thing that's happened is that OpenShift has an IBM stamp of approval, which means it is now available in more organisations, that would otherwise have clung to more obscure mainframes and worse clown platforms.
From my perspective, as someone who is deeply suspicious of IBM in general, that's a plus.
This is so fascinating to me. I mean how IBM keeps taking over other companies, but they consistently deliver low quality/bottom-tier services and products. Why do they keep doing the same thing again and again? How are they generating actual revenue this way?
Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools? They have a mature PowerPC (Power9+? now?)setup, lots of talent to make ML/LLMs work and lots of existing investment in datacenters and getting GPU-intense workloads going.
I don't disagree that this acquisition is good strategy, I'm just fascinated (Schadenfreude?) to witness the demise of confluent now. I think economists should study this, it might help avert larger problems.
Just the set the record straight on how and why these acquisitions go at IBM. This is a first hand account working at and with IBM and competitors and being in the room as tech-guy accessory to murder.
IBM lives off huge multi-year contract deals with their customers, each are multi-multi-million dollars worth. IBM has many of these contracts, maybe ~2000 of them around the planet, including your own government wherever it is that you live. This is ALL that matters to IBM. ALL. That. Matters.
These huge contracts get renegotiated at every X years. IBM renewal salespeople are tough and rough, in particular the ones on the renewal teams, and they spend every minute of every hour in between renewals grooming the decision makers, sponsors, champions and stakeholders (and their families) within these big corporations. Every time you see an IBM logo at a sports event (and there are many IBM-sponsored events), that's not IBM marketing to you the ad-viewer. They are there for grooming their stakeholders, who fight hard to be in the best IBM sponsored-seats at those venues, and in the glamorous pre and after party, celebs included. IBM also sponsors other stuff, even special programs at universities. Who go to these universities? Oh, you bet, the stakeholder's kids, who get the IBM-treatment and IBM-scholarship at those places.
But the grooming is not enough. The renewal is not usually at risk - who has the balls to uninstall IBM out of a large corp? What is at risk is IBM's growth, which is fueled by price increases at every renewal point not the sale of new software or new clients - there are no new clients for IBM anywhere anymore! These price increases need to happen, not just because of inflation but because of the stock price and bonuses that keep the renewal army and management going strong, since this is a who-knows-who business. To justify the price increase internally at those huge client corps (not to the stakeholder but to their bosses, boards, users, etc) IBM needs to throw a bone into these negotiations. The bone is whatever acquisition you see they make: Red Hat, Hashicorp... Or developments like Watson. Or whatever. They are only interested in acquiring products or entering markets that can be thrown at those renewal negotiations, with very few exceptions. Why Confluent? Well, because they probably did their research and decided that existing Confluent licenses can be applied to one (yeah, one) or many renewal contracts as growth fuel for at least 1-to-N iterations of renewals.
Renewal contracts correspond anywhere from 60% to 95% of IBM's revenue, depending on how you account for the the consulting arm and "new" (software/hw sales/subscriptions). I particularly have not seen lots of companies hiring IBM consultants "just because we love IBM consultants and their rates", so consulting at a site is always tied to the renewal somehow, even if billed separately or not billed at all. Same for new sw sales, if a company wants something IBM has on their catalog from their own whim and will, then that will just probably be packed into the next renewal because that's stakeholder leverage for justifying the renewal's increase base rate. Remember, a lot of IBM's mainframes are not even sold, they are just rentals.
Most IBM investment into research programs, new tech (quantum computing!) etc are there just to help the renewals and secure a new Govt deal here and there. How? Well, maybe the increase in the renewal for the, ie, State of Illinois contract gets a bone thrown in for a new "Quantum Research Center (by IBM)" at some U of I campus or tech park that the now visionary Governor will happily cut the ribbon, photo op and do the speech. Oh wait! I swear I made this up as an example, but this one is actually true, lol:
IBM have an absolutely stellar record of blowing acquisitions. The highly motivated newly acquired team will be in honeymoon phase for 3 months, and then it slowly dawns on them that they’ve joined an unbelievably rigid organization where things like customer satisfaction and great products don’t matter at all. Then they’ll be in shock and disbelief at the mind boggling Byzantine rules and internal systems they have to use, whose sole purpose is to make sure nobody does anything. Finally, the core IBM sales force will start to make demands on them and will short to ground any vestiges of energy, time, opportunity and motivation they might have left. The good team members will leave and join a former business partner, or decide to spend more time with the family. They’ll meet often at the beginning to relive the glory days of pre-acquisition and recount times where they went went above and beyond for that important early customer. But then these meetings will become fewer and fewer. Finally they’ll find a way of massaging their resumes to cast the last years as being “at the heart of AI infrastructure”.
IBM is buying market share, not a surprise; at least one telecom has all their Kafka stuff on the Confluent cloud, and there must be 1000s of such customers.
I worked for IBM Cloud about 6+ years ago. While there, we had to connect to a Softlayer VPN to get into our Jira instance. My VPN account and Jira account never got provisioned so I couldn't connect nor see the Jira board. My team-mates couldn't even assign a ticket to me b/c of this. They would just put my initial's in the ticket summary and send me a slack of the details.
It was right before I left that we got our own Jira instance. This was all around the time of the Red Hat acquisition. I remember the announcement b/c we used SuSE for everything IIRC.
ibm also acquired datastax (managed pulsar) this year. building on top of these specialized managed service providers is becoming increasingly risky. at this point i'd rather use one of the kneecapped cloud provider offerings if possible (azure event hubs / aws msk / etc.) than risk being extorted in a few years as the result of some acquisition. at least you can work around the limitations..
anyone have an idea on how streamnative is doing? we're considering them for managed pulsar and unfortunately nobody else is in the game
51 comments
[ 2.4 ms ] story [ 71.3 ms ] threadI'll start.
https://github.com/tansu-io/tansu
https://newsroom.ibm.com/2025-12-08-ibm-to-acquire-confluent...
I don't understand how this acquisition is relevant for AI.
For Red Hat, there's no longer an official "public" distribution of RHEL, but apart from that they seemingly have been left alone and able to continue to develop their own products. But that's only my POV as a user of OSS Red Hat products at home and of RHEL and OpenShift at work.
What do you mean by that, like "centos/stream" (aka https://www.centos.org/download/ ) ?
The previous main selling point of CentOS was bug-for-bug compatibility with RHEL. Red Hat is just killing the distro by moving their focus to a non-existent market. Enthusiasts will choose RHEL, while enterprises would choose the more stable RHEL, which Red Hat could earn money from, or alternatives like Alma or Rocky.
While you may have considered bug-for-bug compatibility the main feature, it was a major point of frustration for many users and the maintainers. That model means you can't fix any bugs or accept contributions from the community. CentOS finally fixed both problems by moving to the Stream model.
From my perspective, as someone who is deeply suspicious of IBM in general, that's a plus.
https://www.confluent.io/blog/confluent-acquires-warpstream/
Ok, so does anyone remember 'Watson'? It was the chatgpt before chatgpt. they built it in house. Why didn't they compete with OpenAI like Google and Anthropic are doing, with in-house tools? They have a mature PowerPC (Power9+? now?)setup, lots of talent to make ML/LLMs work and lots of existing investment in datacenters and getting GPU-intense workloads going.
I don't disagree that this acquisition is good strategy, I'm just fascinated (Schadenfreude?) to witness the demise of confluent now. I think economists should study this, it might help avert larger problems.
IBM lives off huge multi-year contract deals with their customers, each are multi-multi-million dollars worth. IBM has many of these contracts, maybe ~2000 of them around the planet, including your own government wherever it is that you live. This is ALL that matters to IBM. ALL. That. Matters.
These huge contracts get renegotiated at every X years. IBM renewal salespeople are tough and rough, in particular the ones on the renewal teams, and they spend every minute of every hour in between renewals grooming the decision makers, sponsors, champions and stakeholders (and their families) within these big corporations. Every time you see an IBM logo at a sports event (and there are many IBM-sponsored events), that's not IBM marketing to you the ad-viewer. They are there for grooming their stakeholders, who fight hard to be in the best IBM sponsored-seats at those venues, and in the glamorous pre and after party, celebs included. IBM also sponsors other stuff, even special programs at universities. Who go to these universities? Oh, you bet, the stakeholder's kids, who get the IBM-treatment and IBM-scholarship at those places.
But the grooming is not enough. The renewal is not usually at risk - who has the balls to uninstall IBM out of a large corp? What is at risk is IBM's growth, which is fueled by price increases at every renewal point not the sale of new software or new clients - there are no new clients for IBM anywhere anymore! These price increases need to happen, not just because of inflation but because of the stock price and bonuses that keep the renewal army and management going strong, since this is a who-knows-who business. To justify the price increase internally at those huge client corps (not to the stakeholder but to their bosses, boards, users, etc) IBM needs to throw a bone into these negotiations. The bone is whatever acquisition you see they make: Red Hat, Hashicorp... Or developments like Watson. Or whatever. They are only interested in acquiring products or entering markets that can be thrown at those renewal negotiations, with very few exceptions. Why Confluent? Well, because they probably did their research and decided that existing Confluent licenses can be applied to one (yeah, one) or many renewal contracts as growth fuel for at least 1-to-N iterations of renewals.
Renewal contracts correspond anywhere from 60% to 95% of IBM's revenue, depending on how you account for the the consulting arm and "new" (software/hw sales/subscriptions). I particularly have not seen lots of companies hiring IBM consultants "just because we love IBM consultants and their rates", so consulting at a site is always tied to the renewal somehow, even if billed separately or not billed at all. Same for new sw sales, if a company wants something IBM has on their catalog from their own whim and will, then that will just probably be packed into the next renewal because that's stakeholder leverage for justifying the renewal's increase base rate. Remember, a lot of IBM's mainframes are not even sold, they are just rentals.
Most IBM investment into research programs, new tech (quantum computing!) etc are there just to help the renewals and secure a new Govt deal here and there. How? Well, maybe the increase in the renewal for the, ie, State of Illinois contract gets a bone thrown in for a new "Quantum Research Center (by IBM)" at some U of I campus or tech park that the now visionary Governor will happily cut the ribbon, photo op and do the speech. Oh wait! I swear I made this up as an example, but this one is actually true, lol:
https://newsr...
It was right before I left that we got our own Jira instance. This was all around the time of the Red Hat acquisition. I remember the announcement b/c we used SuSE for everything IIRC.
But you can also use Kafka as pub-sub system (duplicate messages to each subscribers)
Messages are not deleted after consumption (configurable)
Since when is streaming event logs AI? Am I taking crazy pills?
anyone have an idea on how streamnative is doing? we're considering them for managed pulsar and unfortunately nobody else is in the game
we keep pushing Pulsar and moving things - https://streamnative.io/blog/ursa-wins-vldb-2025-best-indust...
Confluent stock soars 29% as IBM announces $11B acquisition deal
https://www.cnbc.com/2025/12/08/ibm-confluent-deal-data.html