IBM’s software revenue growth accelerated in the third quarter owing to a strong showing in Red Hat’s revenues.
Software revenue came at $6.5 billion, up 9.6 percent at constant currency, driven by a 14 percent jump in Red Hat revenues, up from 8 percent in the second quarter.
Red Hat, a provider of open-source software solutions for enterprises, was officially acquired by IBM on July 9, 2019, as part of the tech giant’s “creative destruction” strategy of dropping mature, low-profit technology businesses and replacing them with emerging high-margin markets like the “hybrid” multi-cloud.
That’s a computing environment that combines multiple cloud providers and clouds—public, private, and software-as-a-service. It explains why the technology giant paid top dollar, $34 billion, to buy Red Hat, an investment beginning to pay off, as IBM’s recent financial performance demonstrates….