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IBM Has Its Head In The Clouds

November 25, 2019 / Jon Younkman
SHARESHARESHARE

IBM ,also referred to as Big Blue, has struggled with revenue growth for more than five years. In Oct. 2018, IBM announced its acquisition of Red Hat for $34 billion -- IBM's largest acquisition in its 108-year history. And it didn't come cheap, with a price tag of almost 10x sales. Red Hat is the leading provider of hybrid cloud solutions, a rapidly growing sub-sector of the overall cloud industry.The acquisition was meant to combine Red Hat's industry-leading position with IBM's incumbency and scale position to accelerate Red Hat's already explosive revenue growth, and hopefully help return IBM to top-line growth. The acquisition closed on July 9. Let's take a look at IBM's third-quarter results, the first quarter with a Red Hat contribution to see if its strategy is working.