Shares in the open-source software developer, Red Hat, jumped 45% on Monday following a $34bn cash big from IBM, known in the industry as ‘Big Blue’.

IBM is paying what amounts to a 40% premium for Red Hat in return for the opportunity to grow its hybrid cloud business (combining on-site private servers with third-party cloud facilities) after arriving late to the party for conventical cloud offerings.

Red Hat has been seeking a buyer for some time meaning other potential suitors such as Cisco, Oracle or Google will need to make heroic bids if they are to pip IBM. The deal follows Microsoft’s $7.5bn acquisition of the code-sharing business, GitHub, earlier this year.