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IBM closes $34 billion deal to buy Red Hat…

International Business Machines Corp (IBM.N) said on Tuesday it has closed its $34 billion acquisition of software company Red Hat Inc (RHT.N), as it looks to ramp up its cloud computing business.

Underscoring the drive into high-margin businesses, IBM in October agreed to buy Red Hat, the company’s biggest acquisition in its more than 100-year history.

Ginni Rometty, IBM chief executive since 2012, has steered the company toward faster-growing segments such as cloud, software and services and away from traditional hardware products, but not without a bumpy journey. The newer areas of focus have sometimes underwhelmed investors.

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In an interview, Rometty said the deal was driven by what its customers wanted and helping companies “move mission-critical work” to the cloud, offering a variety of hybrid public and private clouds. “We have all the critical parts,” she said.

Customers want hybrid cloud applications because they “look at their IT and they say, ‘Look I can’t just throw it all out and rebuild it’” and instead want a mix of public and private cloud applications “with one platform across it.”

Rometty cited as examples major IBM cloud customers like Morgan Stanley (MS.N) and Delta Air Lines (DAL.N).

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