Big Blue’s takeover of Red Hat could produce an über-cloud

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BIG BLUE is donning red headgear. Even a few months ago the idea that IBM, a venerable corporate information-technology (IT) firm, would buy Red Hat, the biggest vendor of open-source software, would have been considered highly unlikely, not least because of IBM’S aversion to big mergers. But on October 28th IBM announced that it would take over the firm for $34bn, which represents a 63% premium over Red Hat’s closing share price at the end of last week. The deal is the biggest ever in software and shows how fundamentally the IT industry has changed—and how much pressure IBM felt to do something to get out of its funk.

Red Hat is no household name, but in the IT industry the firm is considered one of the biggest success stories of the recent past. Founded in 1993 it grew rapidly and reached $2.9bn in revenue in its most recent fiscal year. And it did so with a business model that many had declared dead-on-arrival because its margins looked likely to be low. Red Hat takes free open-source software, makes some improvements, bundles it with other tools and services such as technical support and quality control, and charges a monthly subscription fee for the package.

Red Hat’s first product was a version of Linux, the operating system that now powers many servers in data centres and also most cloud-computing systems. It later acquired or developed more and more pieces of software that are needed to power computing clouds. One of the latest additions to its collection was OpenShift, a program that allows computing tasks to be easily moved around between servers and data centres, wrapped up in something called “containers”.

IBM, for its part, has been struggling in recent years to transform itself from a firm which made most of its money with IT services, software and mainframe computers to a company that is based on cloud computing, artificial intelligence (AI) and cyber-security products. After 22 consecutive quarters of declining revenue, IBM seemed to be over the worst when its turnover started to increase early this year. But in the most recent quarter, revenue dipped again, particularly in what IBM calls “strategic imperatives”, such as Watson, the firm’s brand of AI.

In the immediate future, the deal serves to change the prevailing narrative about IBM, which was increasingly seen as an IT has-been. It will probably also allow Ginni Rometty (pictured, right), the firm’s chief executive, to stay for a few years to see through the integration. Analysts thought she was on her way out, not just because her strategy seems to be failing, but because at 61, she is older than the standard retirement age for IBM bosses of 60.

But most importantly IBM hopes that it will give it a chance to catch up in the market of cloud computing, where it has fallen behind the big “public” clouds (as opposed to “private” ones, which only serve a particular company), in particular Amazon Web Services and Microsoft Azure, after it failed to take the trend seriously in the late 2000s and decided not to invest in a network of huge data centres. Red Hat’s OpenShift and Kubernetes, the underlying technology, are supposed to create an über-cloud, allowing computing workloads to run anywhere: whether it is in corporate data centres, on any of the big public clouds or a combination thereof (something called “hybrid cloud” and “multi-cloud”).

The question is whether the added flexibility of such mixed systems and the promise of not getting locked into any one vendor will be enough to lure firms onto IBM’s new platform. They could shy away from the additional complexity and prefer to put their data exclusively into the cloud. Microsoft, for instance, offers similar “hybrid cloud” systems, as do Dell and Hewlett Packard Enterprise (HPE), two other IT incumbents.

The merger, which is the largest in IBM’s history, could go wrong for other reasons—which, in addition to the high price tag, explains why the firm’s share price fell by 5% the day after the deal was announced (the company also said that it would cancel share buybacks, of which it has made generous use in recent years to prop up its shares). In particular, there could be a cultural clash between its still relatively strait-laced culture and Red Hat’s freewheeling one; ties are no longer de rigueur at IBM, but suits are, whereas at Red Hat’s headquarters in Raleigh, a day’s drive from IBM’S base in Armonk, it is not unusual to see employees wearing shorts (though no red hats). To avoid this, Red Hat will remain a “distinct unit”, as IBM puts it.

Further bidders seem unlikely, not just because of the high price, but because other buyers, such as Dell or HPE, would make Red Hat’s role as a cloud Switzerland less credible. Antitrust concerns are unlikely to stand in the way of the deal closing.

And then there is the question of what the acquisition means for Watson, the much-promoted AI business, which has disappointed so far. Some have suggested that buying Red Hat could mean that IBM will turn away from Watson, instead focusing even more on cloud computing. Yet according to Arvind Krishna, who heads IBM’S hybrid cloud business, Red Hat’s software containers will be a perfect vehicle to deliver AI everywhere. The idea is that IBM’S cloud failure held Watson back; now, with the help of Red Hat, it has the chance to spread more widely.

However the merger plays out, it has already produced one big winner: open-source software, which is developed collectively by firms that benefit from it and also by volunteer programmers. Red Hat is the third multi-billion acquisition of an open-source firm this year after MuleSoft, bought by Salesforce for $6.5bn, and GitHub, taken over by Microsoft for $7.5bn. This is not bad for a type of code whose pioneers saw themselves as rebels fighting “evil” proprietary-software makers, in particular Microsoft, accusing them of first locking in their customers and then fleecing them. These origins are also the inspiration for Red Hat’s name, Bob Young, the company’s co-founder, once explained: 18th-century revolutionaries both in America and France wore red caps during their uprisings.

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Why the far side of the moon is so unknown

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THE moon is familiar. Amateur star-gazers can examine it with a telescope, and humans have stood on it several times since the 1960s. But later this year China will carry out a mission that could dramatically increase human understanding of our astronomical neighbour. Scientists will learn vastly more about the moon’s formation, and perhaps about the way in which the Earth and even other planetary masses came together billions of years ago. This mission, Chang’e-4, has such potential because it intends to drop a lander and a rover for the first time ever on the moon’s far side. Why can so much be learned here?

The moon’s orbit is tidally locked to the Earth, which means that it rotates once as it circles the planet. As a result, Earth-bound observers always see the moon’s same face, and observers on the moon watch the Earth spin in a fixed position above them. While slight eccentricities in the moon’s position relative to the Earth mean that slightly more than half its surface can be seen during the course of a year, most of the far side is never visible. In 1959 the Soviet Union’s Luna 3 probe made the first circumnavigation of the moon and beamed back the first pictures of its far side. This is how Earth learned of one of the largest impact craters on any body in the solar system. The South Pole–Aitken basin is 2,500km across and 13km deep. Dozens of spacecraft have observed the near side of the moon and six have landed people on it. The far side has been mapped, and multiple Apollo crews have seen the surface on fly-bys. In 2011 NASA’s Lunar Reconnaissance Orbiter sent back the most detailed images to date. But all observations have been from a distance. No craft has landed.

What is known of the far side is intriguing. The near side is covered with mare, or ancient lava flows; the far side has almost none. The concentrations of chemical compounds on the two sides are noticeably different. The near side’s lava flows cover much of the oldest ground, whereas the far side’s relatively untouched face has experienced billions of years of solar wind and solar exposure. Brad Tucker, an astrophysicist and cosmologist at the Australian National University, says this means missions can uncover “unique material that would be a direct snapshot of the beginnings of the moon.” One of the most popular theories about the moon’s formation is that it is debris from a collision between the Earth and a proto-planet billions of years ago; another suggests that multiple orbiting moons or a debris ring around Earth coalesced. More data from the far side will help refine or refute these theories. Dr Tucker also notes that the far side has more helium-3, a substance that is both relatively rare on Earth and excellent for rocket fuel.

The difficulty in exploring the far side stems from its position: the moon’s bulk blocks all radio signals. China earlier this year launched a satellite that now sits at the L2 Lagrange point, a locus of comparative gravitational stability where the satellite can, with some maintenance, keep a nearly fixed position relative to the Earth and the moon. This relay will allow live remote control and data reception from the lander and rover. Better understanding of the far side will affect governments’ and private plans for putting people back on the moon, for establishing stations permanently orbiting the moon and, one day perhaps, for developing the moon into a refuelling station for missions to Mars and beyond. “The moon has been shown to be a giant gas station for the Solar System,” says Dr Tucker. Far-side missions might reveal where the pumps are.

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Brian Fitzpatrick tries to hold on in Pennsylvania’s first district

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IF IT were not for the “Republican Party” label that will appear under his name on ballots on November 6th—and the efforts of his opponent, Scott Wallace, to paint him red—it would not be especially obvious to voters that Brian Fitzpatrick is a Republican. The first-term incumbent, who is running to represent Pennsylvania’s newly-formed first district, boasts a slew of union endorsements and an “F” rating from the National Rifle Association. He makes weekly visits to a local mosque, to which local journalists are invited along. He has also had a few high profile spats with President Donald Trump over Russia and the president’s refusal to release his tax returns. Will Mr Fitzpatrick show there is room for independent-minded moderates in Mr Trump’s Republican Party?

Mr Trump has described the mid-term elections as a referendum on his presidency. Voters seem to agree with that. In a recent poll, voters in Pennsylvania said Mr Trump was the primary factor in the election: 74% of voters backing a Democrat for Congress say they are voting mainly against Mr Trump; 80% backing a Republican say they’re supporting the president.

While the president has encouraged his party’s congressional candidates to run toward him, on the campaign trail, Mr Fitzpatrick, a former FBI agent, has sprinted the other way. He often touts his affiliation with the Problem Solvers Caucus, a bipartisan group he co-chairs with Josh Gottheimer, a New Jersey Democrat who has endorsed Mr Fitzpatrick and even campaigned with him. His lawn signs laud him as the “Ranked #1 Most Independent Freshman Congressman.” At a recent debate, Mr Fitzpatrick asked Mr Wallace to stop referring to him by his party label.

Mr Wallace, a millionaire philanthropist, has no intention of doing that. The self-funded challenger has vastly outspent Mr Fitzpatrick, buying an incessant barrage of ads that tie the incumbent to Mr Trump, who faces a 53% disapproval rating in the district. In ads and debates, Mr Wallace argues that his opponent walks the Republican’s party line. While Mr Fitzpatrick has bucked his own party on a few major issues, such as votes to preserve Obamacare and environmental regulations, Mr Wallace points out, citing FiveThirtyEight, a data-journalism website, that he has backed Trump-supported bills, including the unpopular tax cuts, 84% of the time.

In the final week of campaigning, polls show a race that is neck-and-neck. Democrats, who need to take back 24 seats to reclaim control of the House of Representatives, envision a path of victory running through largely white, suburban districts like this one just north of Philadelphia.  

Earlier this year, a court-ordered remapping of Pennsylvania’s heavily gerrymandered congressional districts turned most of the collar counties surrounding Philadelphia from safe Republican seats into probable Democratic pickups. Republican moderates Ryan Costello and Charlie Dent resigned rather than fight this uphill battle. Mr Fitzpatrick’s district, formerly the eighth, was the exception. Little changed, Pennsylvania’s first still mostly overlaps with Bucks County, which has been a swing district in this battleground state.

Voters in the district have tended to reward moderates of both parties and have a history of ticket-splitting. Bucks backed both Hillary Clinton and Pat Toomey, a Republican senator, in 2016. It is also an area that has been swept along in electoral waves: Mr Fitzpatrick’s predecessor (and older brother) lost re-election when Democrats reclaimed the House in 2006, but regained the seat in 2010’s Republican deluge.

Home to both thriving suburbs and rusting factory towns ravaged by opioid addiction, Bucks County has been buffeted by political cross-currents: affluent, college-educated voters have moved left as white, working class residents have turn to the right. That means that in 2018, national political trends, rather than policy positions, may ultimately determine votes. Mr Fitzpatrick has staked his nascent legislative career on the opposite being true.

One big issue in his district is the opioid epidemic. There were 185 opioid-related deaths in Bucks County in 2016, a 50% increase on the previous year. That figure doesn’t include the untold number of Bucks residents who overdosed in neighbouring Philadelphia, which saw 907 fatalities.

Mr Fitzpatrick drafted two provisions of the sweeping opioid addiction bill that received overwhelming bipartisan support in Congress and was signed by Mr Trump last week. While combating opioids is uncontroversial, it is nonetheless rare for a first-term congressman to be able to tout passage of substantive legislation on an issue of great concern to his constituents. A Fitzpatrick loss would suggest that such efforts, as well as strong bipartisan credentials, offer no protection against an increasingly partisan electorate.

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Gavin Newsom will be a thorn in Donald Trump’s side

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A “CLOWN” IS what President Donald Trump recently called Gavin Newsom, the current lieutenant-governor and Democratic candidate for governor of California. Mr Newsom responded by comparing Mr Trump to Pennywise, the evil clown from Stephen King’s horror novel, “It”. A personal connection made the spat juicier. Mr Newsom’s ex-wife, a Democrat-turned-Republican, happens to be dating Mr Trump’s eldest son.

California is already at war with the federal government, having sued it 44 times since Mr Trump took office, on issues such as health care, internet policy, immigration and the environment. Under its current governor, Jerry Brown, who is 80, California has proudly nurtured an alternative political vision for America, most notably by adopting aggressive standards to combat climate change at a time when Mr Trump praises coal.

The president has endorsed John Cox, a Republican businessman who has focused on illegal immigration and California’s high costs. But Mr Trump is unpopular in California, and Mr Cox trails Mr Newsom by about 20 percentage points in the polls. So large is Mr Newsom’s lead that, rather than campaigning to win the election, he is already promoting his agenda. This includes boosting investment in early childhood education, embracing immigrants and offering universal health care.

As San Francisco’s mayor from 2004 to 2011, Mr Newsom famously allowed same-sex marriages, defying then-president George W. Bush, who supported a federal ban. He has a track record for avant-garde and creative policymaking. As a supervisor he championed offering services, not cash, to San Francisco’s legions of homeless. Long presumed to have national political aspirations, in 2004 he and his then-wife appeared on the cover of Harper’s Bazaar dressed in black tie, under the headline “The New Kennedys”.

In many ways Mr Newsom is a politician more in the mould of the 1960s than today. He has the look and smoothness of a seasoned politico. Running San Francisco gave him rich experience of urban politics—in some ways the post is more powerful than the mayoralty of Los Angeles. At a time when many ambitious Democrats are pushing to the left and shunning the party establishment, Mr Newsom is frank about his close ties to Nancy Pelosi, the longtime congresswoman from San Francisco and former Speaker of the House.

Governing California is likely to prove much harder than winning the election. Mr Newsom’s ambitions for the office are large and many of his projects, such as offering health care to all Californians including illegal immigrants, will be costly. He will have to balance fiscal prudence with his social conscience. He has not outlined how he intends to pay for new services, and some anticipate he will be more prodigal than his predecessor. Mr Newsom insists that such accusations are “lazy punditry based on pure speculation. I am not profligate any more than Jerry Brown was.”

Another question is what happens when California’s economy, the world’s fifth-largest, falls on harder times, as it will eventually. Mr Newsom points out that he ran San Francisco during a downturn: “I have no experience managing in an abundance. I have experience in managing in scarcity.” California’s economy has boomed for much of the last decade, and Mr Brown convinced Californians to set aside money to cover future budget shortfalls. Yet even a mild recession would wipe out those reserves in a single year, says Gabriel Petek of S&P Global Ratings, a financial-information firm.

Because of a property-tax revolt in the 1970s, California relies heavily on income taxes. And, because it is a progressive state, it squeezes the rich. Just 1% of its people account for 46% of personal-income tax revenues. Tax rates probably cannot rise much higher without driving people away. How California handles its economy and budget under a new governor will be closely watched by many—including by Mr Newsom’s foe in the White House.

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“Stan & Ollie” is a poignant tale of Hollywood’s great entertainers

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TWO KINGS of slapstick reigned over early classical Hollywood cinema. In more than 100 films released between 1927 and 1951, Stan Laurel and Oliver Hardy took physical comedy to new, ridiculous heights. “The Battle of the Century” (1927) demanded the throwing of 3,000 cream pies; in “You’re Darn Tootin’” (1928) a mass brawl ends with characters ripping each other’s trousers off. Yet their comedy was more sophisticated than it is often given credit for, and their best jokes toyed with their unusual power dynamic. The duo would frequently break the fourth wall to make their audiences complicit in the gags, which is partly what inspired such devotion in their fans. 

“Stan & Ollie”, a new film, chooses not to revisit their early work or their heyday in glitzy Los Angeles. It focuses instead on their final performances together in the drab English musical halls and theatres of the 1950s. The tour is intended to be a comeback, a way to get financial backing for a new film, but it quickly becomes a humiliating farce. Audiences do not show up, promises are not kept, and the duo’s relationship is strained by ill-health and simmering grudges.  

The pair are played in their twilight years by Steve Coogan and John C. Reilly (who sports suitably impressive jowls). Both are accustomed to portraying comic—but slightly tragic—figures. Mr Coogan’s best-known role is Alan Partridge, a hapless radio host, while Mr Reilly has opted for oafish, lonely types such as Dale Doback in “Step Brothers”. Throughout the film they skilfully mimic some of their characters’ best-loved skits, including an intricate dance routine from “Way Out West” (1937), a spoof Western. They capture the pair’s dynamic well, too, with Mr Coogan a prim and skittish Laurel and Mr Reilly loafing and boisterous as Hardy. 

On-stage routines are deftly recreated. When Hardy pulls Laurel back into the wings, or cracks his partner over the head with a bedpan, their playfulness elicits easy laughs. But when the film’s credits roll and Laurel and Hardy’s original gags, all fuzzy and monochrome, are played, the new renditions can feel flat in comparison. Almost a century on, Laurel and Hardy retain a chemistry and comic timing that makes their act hilarious. This could be taken as an indictment of Mr Coogan and Mr Reilly’s performances, but it should not. Instead it shows how little the originals’ ability to entertain has faded.

The film is itself prone to exaggeration for entertainment purposes, such as when Hardy cries out to his comedy partner that “You loved Laurel and Hardy but you never loved me” (they got on famously). When they arrive in a bleak post-war England, they are put up in poky boarding houses and perform in tiny theatres to thinning audiences. In reality, while Laurel and Hardy’s fame had waned in America during the second world war, they were still loved in Britain and Ireland. Some shows had poor attendance but AJ Marriott, the author of “Laurel and Hardy: The British Tours”, on which the film is based, attributes this to the dwindling popularity of music halls and variety shows rather than a specific lack of interest in their act. Indeed Laurel was born in the north of England, only moving to Hollywood as an adult. For him the tour was a homecoming of sorts, but this is not acknowledged in “Stan & Ollie”.

And, for a film about an established team of performers, Mr Coogan and Mr Reilly are at times upstaged by the film’s other double act. Ida Kitaeva Laurel (Nina Arianda) is a Russian starlet with an acerbic tongue and a gleefully sarcastic manner; Lucille Hardy (Shirley Henderson) is her perfect foil, fretting over and doting on her husband. If Laurel and Hardy’s act worked because of their power struggles, then Ida’s constant swiping of Laurel’s drinks entertains for just the same reason. As the tour concludes and Hardy struggles with poor health, Ida and Lucille cease bickering and become closer, while their husbands reconcile too. These moments of conflict may be embellished, but they’re necessary to break up the occasionally saccharine chumminess.

“Stan & Ollie” was originally conceived as a television drama, and its sweet storyline might have worked better in that format. Still, the film is charming, well-acted and poignant. The ageing duo’s love for the stage and insistence that the show must go on is moving, and Mr Coogan and Mr Reilly embody them well. For fans of Laurel and Hardy, “Stan & Ollie” will evoke fond memories of comic brilliance; for anyone yet to discover them, the magic of their performances is impossible to recapture entirely. Happily, it can be found in plenty of other movies.

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