
Who Will Buy Canonical and SUSE? - mikece
https://www.patreon.com/posts/who-will-buy-and-31572837
======
digi59404
Microsoft won’t buy Canonical. Folks are making these predictions without a
root cause analysis as to what the companies do well. IBM bought Red Hat
because IBM bet wrong in the cloud race and is/was way behind. Red Hat
consolidated companies beneath them and worked hard to expand their cloud
offerings. Right now on OpenShift along the US Gov pays them $100MM a year.
Just OpenShift.

Add to this banks, grocery stores, and airlines are moving off mainframes and
to the cloud - and choosing OpenShift. IBM was starting to get eaten by Red
Hat. Not to mention IBM is on the cusp of a major leadership change, and needs
fresh cloud leaders to lead IBM into the next decades.

These are the reasons IBM bought Red Hat. Because IBM has lost its way. Red
Hat had the most to offer.

Canonical doesn’t have much to offer. Few people are paying for Ubuntu. Yeah
yeah it’s popular in Docker images, yeah yeah it’s a popular desktop distro.
But so what? OpenStack is shrinking (SUSE abandoned it for Kubernetes) and
Ubuntu has bet their farm on OpenStack. They don’t have much in the way of
Kubernetes. On OpenStack Red Hat has most of the customers. Canonical has
almost nothing to offer in terms of being bought out. They have very few items
that produce profit. They made a huge (and flawed) bet on mobile and failed.
Ubuntu doesn’t have strong leadership and doesn’t have strong clients - In
fact I’ve been a consultant for 5 years now bouncing between companies every
few weeks. I have YET to run into a Canonical client.

This is why no one will buy Canonical. SUSE? Well we’ll see.

~~~
ThrowawayR2
Reportedly MS did consider buying Red Hat but backed out because of anti-trust
concerns.

> " _Microsoft, which, according to one source, is referenced throughout the
> proxy statement as 'Party A,' first expressed interest in Red Hat back in
> March. But Microsoft dropped out of the running on October 10, according to
> the proxy, 'citing concerns about securing regulatory approvals of a
> strategic transaction in the US and Europe.'_"

Google was also considering it

> " _Google, which one source said was 'Party B,' met with Red Hat in the
> spring of 2018 to discuss partnerships. As a deal with IBM got closer,
> Google continued to move forward with the sale process, but stopped short of
> making an offer. Though Google's former Cloud CEO Diane Greene spent a lot
> of time with Red Hat ahead of its sale, she struggled to get support from
> the company on her large mergers-and-acquisitions aspirations, according to
> one source. So on October 20, Google officially declined to submit a
> proposal and instead asked if Red Hat would explore a commercial partnership
> and a minority equity investment from Google._"

Block javascript if you want to read the article:

[https://www.businessinsider.com/red-hat-deal-talks-with-
amaz...](https://www.businessinsider.com/red-hat-deal-talks-with-amazon-
microsoft-google-before-34-billion-ibm-acquisition-2018-12)

~~~
digi59404
Yeah I was in RH during this and saw a lot of the internal talks. Red Hat had
a reason to be bought.

Canonical... Doesn't.

------
Santosh83
Bad trend for user freedom when the industry keeps acquiring and consolidating
and further fattening the already fat giants.

~~~
a3n
It's the same for the internet in general, which has been turned into TV, and
whose main purpose is to serve ads.

~~~
coleifer
It's worse: it's reality TV.

------
rglullis
Stranger things have happened, but
[https://bugs.launchpad.net/ubuntu/+bug/1](https://bugs.launchpad.net/ubuntu/+bug/1)
makes me believe there is ~somewhat~ of a conflict between Canonical and
Microsoft.

~~~
jasonjayr
If the acquisition goes through they can just close that as WONTFIX.

~~~
cbmuser
It might be changed to "IN_PROGRESS" with Microsoft Edge being released for
Linux next year :).

------
jasoneckert
I actually made the same gut speculations in common conversation earlier when
IBM bought Red Hat (SAP buying SuSE, Microsoft buying Canonical). It was nice
to see this post that flushed out the rationale in more detail.

~~~
ianai
There will be several bidders, I expect. IBM would have a reason to buy SuSE
as would Microsoft. Nothing grows your market power by buying a competitor -
no matter how small or technologically different.

------
mikece
“Canonical has, historically, had a number of products (and attempted product
initiatives) that didn't quite work out (including Ubuntu Phone, Ubuntu for
Android, Ubuntu for TV, and several software initiatives)...”

Anyone else reminded of Microsoft when you read that? Windows Phone, Zune, MSN
TV, and “several other software initiatives” (Bing, Bob, Clippy, etc)...

~~~
johnchristopher
Not really.

None of Canonical products reached the general consumer market in any
significant ways while the Windows Phone and the Zune have good reputation
(and have been actually sold to consumers). I hear Bing is doing okay and
Clippy is from a different millennium.

Surface, Xbox and azure are doing great.

------
ausjke
Anyone but Microsoft please. I can never trust Microsoft for the rest of my
life. If that occurs I will use Debian 100%.

On Canonical side, I read somewhere complaining they suck at marketing, they
could have done much better otherwise.

~~~
chirau
Never is a strong word

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bonsai80
Canonical is working towards an IPO.... so I will! :)

~~~
ianai
Wow, I wonder how far away that is. I also hope they get enough money to make
some strong market share with new products.

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curt15
Canonical is already moving to a Microsoft-style update model for some of its
software. [https://forum.snapcraft.io/t/disabling-automatic-refresh-
for...](https://forum.snapcraft.io/t/disabling-automatic-refresh-for-snap-
from-store/707)

~~~
dorfsmay
For a desktop on the other hand, this is great.

People are used to having their phone constantly upgrading automatically,
which make it hard to explain to non-technical users why they need to `apt
upgrade` regularly.

------
mongol
We can see governments in Europe making moves to encourage European vendors to
build clouds that are unreachable by US legislation. i think SUSE can come
into play here, one way or another. I think EQT will try to position SUSE in
this area.

~~~
dorfsmay
OVH?

~~~
sam_lowry_
Rimes with crap and gamers and filesharing.

------
itomato
I prefer to look at the other side.

Why the focus on acquisition with vague synergy? HANA drives SUSE adoption,
but the Linux piece is relatively static compared to the tooling required to
scale and manage these big stacks?

I like to think HashiCorp or another software vendor sees the appeal of
building their components into a sturdy Linux product like SUSE.

I might have speculated the same about Docker or Ansible, but they have
already been similarly absorbed.

Rather than the consolidation in favor of existing and entrenched tech like
SAP, it's inspiring to think a new IBM or Microsoft is being built and could
benefit from a Telco-grade OS.

~~~
nieve
I may be misunderstanding you, but I find it difficult to believe Hashicorp
could put together a big enough set of investors to drop a couple of billion
on SUSE. You occasionally see smaller companies buy bigger, more established
ones with higher revenues and such, but it's pretty rare.

------
pjmlp
I pretty much see that happening

I will be gone by then, however in a couple of decades anything substantial
based on GPL will be gone, and it will business as usual regarding UNIX wars.

~~~
frou_dh
You can never leave the industry. Who else will post the daily reminders that
AOT compilers exist for Java?

~~~
pjmlp
Someone else. :)

