ARMONK, N.Y. and DALLAS – The ink has barely dried on IBM’s finalized $34 billion purchase of open source company Red Hat, and already the tech giant has secured a major client for its new technologies.
On Tuesday, IBM announced that it had a signed a “multi-year strategic alliance” with AT&T in a deal reportedly worth “billions of dollars.”
As part of the arrangement, AT&T will utilize Red Hat’s open source platform to manage workloads and applications.
“AT&T Business will help transform IBM’s networking solutions with their latest technologies, including 5G, Edge Compute, and IOT as well as multi-cloud capabilities using Red Hat,” the company said in its release.
In turn, IBM will make AT&T Business its “primary provider of software defined networking.”
“IBM will be the primary developer and cloud provider for AT&T Business’s operational applications and will help manage the AT&T Communications IT infrastructure, on and off-premises and across different clouds — private and public,” the release explained.
The two companies also plan to collaborate on edge computing platforms, which will help enterprise clients capitalize on the power of 5G network speeds and the internet-connected devices and sensors at the edge of the network.
“Using 5G, enterprises will one day be able to rapidly transmit data to and from multiple clouds and billions of edge devices with increased reliability and security, reduced latency and dramatic improvements in bandwidth,” the firms said.
Ginni Rometty, IBM’s chief executive, said the contract is an early sign that its strategic acquisition of Red Hat is working.
“This is a vindication of the value of the hybrid cloud, and the value of Red Hat,” Rometty was quoted as saying in the Financial Times.
IBM is scheduled to report its latest earnings on Wednesday. However, it is not expected to discuss the impacts of the Red Hat deal until an investor meeting on August 2.