Summer shopping: billions for acacia and red hat.

Summer shopping: billions for acacia and red hat.
Cisco and IBM spent billions dollars for fiber optics and cloud technologies.

While summer is usually a quiet season, there were two huge deals in the IT world in July.

Cisco announced acquisition of Acacia Communicatios for ~$2.6 billion and IBM closed $34 billion deal to acquire RedHat.

Acacia Communications manufactures high-speed fiber equipment for data-centers and cloud service providers using coherent technology. It allows transferring optics signal on huge distance, between data-centers in a city or even across the country. That’s the value Cisco is ready to pay $2.6 billion for.

It’s not the first fiber solutions acquisition for the network behemoth: in December 2018 they announced an acquisition of Luxtera, a company that uses silicon photonics to build integrated optics capabilities. It enables fast data transfer inside data-centers (server-to-server).

As a result, Cisco has expanded it’s optics portfolio, adding solutions both for long-distance, between data-centers (Acacia) and for short distance, inside data-center (Luxtera).

The acquisition is expected to close during the second half of Cisco’s FY2020 (which starts on Aug 1, 2019).

At the same time, IBM closed $34 billion acquisition deal for Red Hat.

Red Hat is one of the biggest and most successful open source companies in the world. Red Hat Enterprise Linux (RHEL) is distributed under paid subscription, while Fedora is completely free.

On top of Linux distros, Red Hat is focused on cloud solutions, which is likely the reason for the Blue Giant to acquire.

IBM promises that Red Hat remains independent and commited to open source.

We’re glad to hear that, as Centos (free Linux distro based on RHEL) is the most popular among our clients as an OS for a virtual server.


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