IBM to acquire SoftLayer

Tue, 4th June 2013, 16:57

DreamHost picked a very bad day to announce their new Managed WordPress Service. In what is sure to be the biggest web hosting news story of the year, IBM is confirming earlier rumors surrounding an acquisition bid for Dallas based web hosting company SoftLayer Technologies.  IBM  feels the acquisition of SoftLayer, considered the largest privately held cloud computing infrastructure provider,  will strengthen IBM's leadership position in cloud computing and help speed business adoption of public and private cloud solutions.

Erich Clementi, Senior Vice President, IBM Global Technology Services says:

As businesses add public cloud capabilities to their on-premise IT systems, they need enterprise-grade reliability, security and management. To address this opportunity, IBM has built a portfolio of high-value private, public and hybridcloud offerings, as well as software-as-a-service business solutions. With SoftLayer, IBM will accelerate the build-out of our public cloud infrastructure to give clients the broadest choice of cloud offerings to drive business innovation.

The press release states IBM is acquiring SoftLayer to make it easier and faster for clients around the world to incorporate cloud computing by marrying the speed and simplicity of SoftLayer’s public cloud services with the enterprise grade reliability, security and openness of the IBM SmartCloud portfolio.

SoftLayer serves approximately 21,000 customers with a global infrastructure platform spanning 13 data centers in the U.S., Asia and Europe.  IBM says these clients will benefit greatly as new enterprise grade functionality from IBM emerges for SoftLayer customers, who will then have a unique opportunity to incorporate it as their business grows.

Lance Crosby, CEO of SoftLayer says:

SoftLayer has a strong track record with born-on-the-cloud companies, and our move today with IBM will rapidly expand that footprint globally as well as allow us to go deep into the large enterprise market,” said . The compelling opportunity is connecting IBM’s geographic reach, industry expertise and IBM’s SmartCloud breadth with our innovative technology. Together SoftLayer and IBM expand their reach to new clients – both born-on-the-cloud and born-in-the-enterprise.

Following the close of the acquisition of SoftLayer, expected in third quarter of 2013, SoftLayer will be combined with IBM SmartCloud into a new Cloud Services division. IBM expects to reach $7 billion annually in cloud revenue by the end of 2015. Financial terms were not disclosed but a number in the vicinity of $2 Billion dollar has been speculated.

SoftLayer is majority held by GI Partners, which purchased all of the equity in a partnership deal with SoftLayer management in 2010. After the deal, GI Partners merged The Planet and SoftLayer.