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IBM CEO Ginni Rometty Says $34 Billion Deal for Red Hat Will ‘Reset the Cloud Landscape’

October 29, 2018, 9:19 AM UTC

“This is a huge day. It absolutely resets the cloud landscape.” That’s what IBM CEO Ginni Rometty told me on Sunday, shortly after announcing her blockbuster $34 billion deal to acquire open-source software provider Red Hat, which will likely define her legacy at the 107-year-old computer company. “We will be the number one hybrid cloud provider.”

I asked what she could do as Red Hat’s owner that she couldn’t have done as its long-time partner. Her answer: “This will accelerate the customer journey to the cloud.” Big companies have only moved about 20% of their work to the cloud, she said. “They have done the easy work, the cost-oriented work.” Working together, IBM and Red Hat can attack the remaining 80%, allowing companies to create integrated solutions from the cacophony they now face. “A typical client has at least 1,000 applications, uses multiple clouds, faces vendor lock in,” she said. Together, IBM and Red Hat can provide end-to-end solutions that allow clients “to do some on premises, some in the public and private cloud, unifying multiple clouds, applications and vendors.”

Red Hat CEO Jim Whitehurst, who will become part of the IBM management team, said his company will continue to partner with all cloud providers, including Amazon, Microsoft and Google. “Clients are demanding an open solution,” Whitehurst said, “which we are both dedicated to.”

When I asked why he was selling to IBM instead of one of the other cloud companies, he said “none of them have the depth of industry expertise” that IBM has.

This story appeared in Fortune’s CEO Daily newsletter. Subscribe here.