Rumors are swirling that SAP may acquire Red Hat. But does it make sense for SAP -- the German software giant -- to open its wallet and buy Red Hat, which is pushing beyond Linux to promote open source middleware and virtualization? The VAR Guy's answer: A potential SAP-Red Hat combo makes sense. Here's why.

First, a disclosure: The VAR Guy owns about $5,000 worth of Red Hat stock. Our resident blogger believes in Red Hat's long-term business strategy regardless of M&A chatter.

Rumors about Red Hat potentially getting acquired spilled onto yesterday. Barron's, in turn, spread a rumor from that SAP was looking to buy Red Hat. But it's important to note: Red Hat has been a takeover rumor from time to time for most of this decade...

Personally, The VAR Guy would like to see Red Hat remain independent, purely because it would be nice to see a pure-play open source company eventually meet the $1 billion annual revenue figure.

Any Synergies Here?

But back to the question at hand: Would an SAP-Red Hat combination make sense? The answer is absolutely yes. SAP could use Red Hat and...
  • Linux to counter Oracle-Sun solutions built atop Sun Solaris.
  • JBoss to counter Oracle Fusion Middleware.
  • Red Hat Enterprise Virtualization (RHEV) to counter Oracle's growing virtualization business.
On paper, the SAP-Red Hat combo appears to make strategic sense. And Red Hat already has a relationship with SAP.

But is SAP really ready to pull the trigger on such a deal? The VAR Guy has no idea... He's just busy repeating rumors (as usual)...

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