IBM announced its intention to buy HashiCorp. 6.4 billion dollars April 2024 to help support the growing AI-related demands of our customers. HashiCorp provides hybrid and multi-cloud lifecycle management products, such as the Infrastructure as Code tool Terraformwhich facilitates building and running AI applications.
HashiCorp will operate as a division of IBM Software rather than being brought under IBM’s open source subsidiary Red Hat. It said the deal would help its products reach a larger audience.
Competition and Markets Authority Informed both companies about the next phase 1 investigation. on August 1, 2024, and officially launched on December 30. It has until February 25 to make a preliminary decision on whether to conduct a full investigation, and relevant third parties can submit comments until January. 16.
IBM declined to provide additional comment. TechRepublic has reached out to HashiCorp for a response.
The IBM-HashiCorp deal has drawn criticism.
IBM has faced challenges since announcing the acquisition, with the US Federal Trade Commission investigating it for potential antitrust concerns.
See: Responsive vs Kubernetes | Comparison of DevOps Tools
IBM’s stock A decrease of about 9 percent Shortly after the announcement due to the simultaneous posting of total first-quarter earnings of $90 million below London Stock Exchange estimates.
In contrast, HashiCorp’s stock rose 4% after a significant decline in 2023 Relicensing Terraform from Open Source Apache 2.0 For more restrictive business source licenses. This alienated parts of the open source community, and they folded the original Terraform code into the open source Open Tofu and placed it under the supervision of the Linux Foundation.
Additionally, in June, a HashiCorp investor Sued the companyClaiming that IBM’s acquisition gave its board members a disproportionate advantage over shareholders. The executives reportedly stood to gain substantial personal benefits from the deal, such as some “golden parachute” and cash conversion of their large, illegal stock holdings.
According to the plaintiffs, such incentives created a conflict of interest, causing the board to favor IBM’s acquisition of potentially more profitable opportunities for shareholders and potentially reduce the value of their investment. came However, the suit was mysterious Took it back Two days later.
The UK cloud market is not a level playing field.
In October 2023, telecoms regulator Ofcom identified various issues in the UK cloud market that present challenges for businesses and consumers, including Amazon and Microsoft dominate. Microsoft’s Azure and AWS have between 70% and 80% of the UK cloud service market, compared to 10% for Google Cloud.
One of the most pressing concerns is the cost of transferring data from a cloud platform. This cost barrier discourages customers from switching between cloud providers, stifling competition in the sector.
See: Microsoft, OpenAI partnership draws eye of UK antitrust regulators
Shortly after these results were published, the CMA Initiated investigation of the issues raised. Those findings – and any potential remedies for anti-competitive practices – are expected to be announced. Later this month.
Synopsys and Ansys merger is likely to be approved.
On December 20, the CMA completed its Phase 1 investigation into chip design software provider Synopsys’ $35 billion acquisition of simulation software company Ansys. It represents the biggest tech deal since then. Broadcom acquires VMware. for $69 billion In 2023.
The CMA found that the merger had the potential to substantially reduce competition in the chip design and light simulation markets but could still approve it if both companies submitted acceptable mitigation.
Synopsys and Ansys compete in three key areas. The first is a register transfer-level power consumption analysis, which estimates a chip’s power demand and usage. The other two are optics and photonics software, both used to design and model light-related products such as camera lenses, TV displays, car headlights, and lasers.
Merging these companies could reduce product choice in all three sectors, as they would become market leaders, and smaller companies would struggle to compete. “This could lead to a loss of innovation, lower quality software, and/or higher prices, which could then be passed on to UK businesses and consumers,” the CMA said in its statement. Press release.
See: The UK regulator is investigating Apple’s dominance of mobile browsers.
CMA also suspected that the deal would allow Synopsys and Ansys to limit the interoperability of their products to maintain dominance. However, research has found that this factor is so important to their customers that they will switch providers if it is compromised, so they have no incentive to do so.
Synopsys Agreement announced in January 2024, claiming that it wants to expand its reach from silicon to system design, combining its expertise in electronic design automation with Ansys simulation. Ansys accepted the deal to accelerate its growth and offer more integrated solutions to its customers. Both had been working together for many years by then.
If the companies do not propose appropriate mitigation by December 31, 2024, the competition authority will conduct a more in-depth investigation into Phase 2. However, Synopsys said it had “already taken steps to address all concerns raised by the CMA”. Published Answer. One such step is his promise. Sell its optical solutions business. After the Ansys acquisition closed to another company.
The merger is expected to be approved by the European Commission. Reuters. Synopsys will offer the same treatment to the CMA as it did in the EU to address competition concerns, the sources added.
A Synopsys spokesperson said, “Together, Synopsys and Ansys can help drive innovation across industries by meeting the rapidly growing customer need for system design solutions that support EDA and Simulation and Analysis (S&A) software.” provide deep ware integration,” said a Synopsys spokesperson.