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IBM Buys Dallas Based Softlayer For $2 Billion

Posted by ryuzaki0 on from the go-big-or-go-home dept.

An anonymous reader writes "IBM this morning announced a deal to acquire the Dallas based hosting company Softlayer, the largest privately held cloud computing provider in the world. Formerly known as The Planet, they have a dark past and hopefully a bright future. Interesting that ISS and Softlayer will now be under the same roof. 'IBM will integrate SoftLayer’s public-cloud services with its own IBM SmartCloud portfolio. In theory, that will allow IBM to more speedily deliver a combination of private, public and hybridized cloud platforms to business clients. CloudLayer features include the ability to deploy virtual cloud servers (with processors 2.0GHz or faster), a content-delivery network with scalability and security, an object-storage platform based on OpenStack Object Storage, and private-cloud solutions.'"

32 of 78 comments (clear)

  1. $2 Billion by Anonymous Coward · · Score: 1

    The cloud bubble can't get much bigger than this. Can it?

    1. Re:$2 Billion by NeutronCowboy · · Score: 5, Informative

      Considering that IBM is actually getting datacenters+software+customers+sales people+support organization, this is a much better deal than, say, Instagram or many of the other recent "Cloud" deals. This is an actual cloud provider, with actual hardware and sales. Looks like Big Blue is getting serious about switching to being a service provider instead of a hardware provider.

      --
      Those who can, do. Those who can't, sue.
    2. Re:$2 Billion by rvw · · Score: 2

      Considering that IBM is actually getting datacenters+software+customers+sales people+support organization, this is a much better deal than, say, Instagram or many of the other recent "Cloud" deals. This is an actual cloud provider, with actual hardware and sales. Looks like Big Blue is getting serious about switching to being a service provider instead of a hardware provider.

      You're right that this is probably a better deal than buying Instagram. You're a little late with noticing that Big Blue is serious about services compared to hardware. That's their main interest for the past 10 or maybe 15 years. Since the PC debacle they completely transformed from hardware to services.

    3. Re:$2 Billion by gl4ss · · Score: 3, Informative

      The cloud bubble can't get much bigger than this. Can it?

      they have assets and real paying customers..

      they have 81 thousand servers (per wikipedia, probably a different amount now) so really it's not that bad price.

      the pricing is much more sensible than any 1b+ deal I've heard of in several years.

      --
      world was created 5 seconds before this post as it is.
    4. Re:$2 Billion by Razgorov+Prikazka · · Score: 1

      The cloud bubble can't get much bigger than this. Can it?



      A bubble usually bursts when even neophytes start talking about it as if they were in it for years. Or at least this is said about stock market bubbles. There is some overlap I guess. So will the cloud burst? (pun intended) Not yet I think. There are still a lot of people who are not at all aware of this thing called the cloud.

      Actually I think that it will get slightly more big. Big in the sense that at a certain moment there wont be computers any more as we know them. Just devices with little computing power (risc) lots of RAM a small SSD just big enough to hold the OS. The OS is only needed to start a browser, hardly anything else. There will be bluetooth, wifi and XG (3G/4G/5G etcetera). Everything else is on the cloud. The data, the programs, the wallpaper... everything. Any picture made will get uploaded there, and integrated with all kinds of social networks. Instantly available for anyone in your network that you gave permission to view that picture.

      Also it goes without saying that the company who has the harddrives with all that data can use it however they think is good. No more privacy, no more 'your data' even less than it is now. We will be of the complete mercy of the corporations. Even if you dont like it it, some glasshole makes a picture of you and your mugshot is out there as well.
      The line between social networks, the cloud and the rest of the internet will get thinner and thinner.
      And no, I dont like that. I think it's a dystopia.

      Eventually people will realise that and resist it. THEN the cloud bursts I think.
      --
      rm -rf --no-preserve-root / ...and let /dev/null sort them out...
    5. Re:$2 Billion by NeutronCowboy · · Score: 2

      I wouldn't say completely - they definitely jettisoned their consumer hardware, but they were still a big player in enterprise hardware, with a big focus on selling servers. It looks now that they plan to completely remove themselves from selling hardware altogether. The main thing I would retain from their acquisition is that this is how you do a complete switch in your core business model: you first expand the area you want to switch to, then quietly jettison the area that used to be your core business. Furthermore, you do it quietly, with internal reorganizations preceding small, easily absorbed acquisitions. HP, you might want to take notes.

      --
      Those who can, do. Those who can't, sue.
    6. Re:$2 Billion by socode · · Score: 3, Interesting

      HP and MS should always have been taking notes - IBM is wiser, older, slicker. It's been on the radar for years that the money won't be in hardware - how could it be if you end up competing with Dell, HP, Samsung et al in the race of a thousand discounts to be the bottom?

      What they are doing looks like a very (relatively) well-executed multi-year strategy. Consumer hardware would have always gone first, since the margin isn't there when you don't own the space vertically. There will be still be significant opportunities in upselling services once you've got your enterprise hardware foot in the door, and it avoids spooking your corporate customers, so if you have non-commodity hardware, you may as well sell it.

      Buying established companies in infrastructure and the enabling software stack is the expensive but least risky way to position themselves. I'd say they are banking on a permanent change to enterprise software, including coding practices, to establish themselves as the premium provider on the mission critical/high availability/high performance side for a very long time.

    7. Re:$2 Billion by Anonymous Coward · · Score: 2, Informative

      I know this is Slashdot, but seriously, 2 clicks from the summary isn't fucking rocket science. http://dealbook.nytimes.com/2013/06/04/i-b-m-buys-cloud-computing-firm-in-deal-said-to-be-worth-2-billion/

    8. Re:$2 Billion by epyT-R · · Score: 1

      You mentioned the corporates that own the data that should belong to the user, but you forgot the big brother state that wants access. YAY CLOUD!!

  2. So... by fuzzyfuzzyfungus · · Score: 1

    Is IBM's present 'cloud' stuff broken in some way that would make something that Softlayer does particularly attractive/valuable as an IP or product buy, or is this more of a straight purchase of Softlayer's already-deployed facilities and existing customers to more swiftly expand their marketshare?

    1. Re:So... by PolygamousRanchKid+ · · Score: 1

      It seems a mix of both. The press release states that:

      IBM SaaS solutions for Smarter Cities, Smarter Commerce and other applications will be made available via SoftLayer over time, providing line-of-business clients improved time to value and new innovation across an increasingly integrated portfolio of solutions that accelerate business process innovation, provide analytics at the point of impact, and connect collaborative business networks within and across organizations.

      So that seems to say that "SoftLayer has something that we didn't have." But the release also states:

      In the last two quarters, more than 60 new gaming companies have moved to the SoftLayer global platform, frequently migrating from commodity cloud platforms because of problems with cost, latency, availability and raw performance.

      So that seems to look like they want the existing infrastructure, and more importantly, the existing customers as well.

      Either way, it looks like IBM really wants that "Biggest Cloud Provider on the Block" Cub Scout Badge.

      --
      Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
  3. This is funny because... by Synerg1y · · Score: 1

    AWS (Amazon web services) is the largest cloud solutions provider. So don't be fooled, privately owned is the keyword here, like anybody gives a shit in regards to solutions.

  4. Good acquisition in my mind by ErichTheRed · · Score: 2

    OK, there's little doubt that there's a serious cloud bubble going on, and in that context it may seem that IBM just threw away lots of money. But, they have tons of money to begin with. On top of that, SoftLayer is a provider of datacenter space at its core, and I'm sure IBM has customers who need hosted systems.

    When you peel off the marketing junk, "cloud" is actually a good thing for a datacenter provider. They get to buy less hardware to support more customers and get it running for them faster, if they know what they're doing. For traditional businesses to adopt it, a middle ground between public cloud and on-site physical servers like this might be the stepping stone they need to move some of the stuff *that makes sense* to a hosting provider.

    IBM is a very staid company by nature, so you know they've gone over this deal backwards and forwards and see potential in it. The only downside I see is the one that comes with most US/European acquisitions by IBM. They have a tendency to come in, acquire all the intellectual property, then find every single possible position that can be offshored, resulting in a lot of job loss.

    1. Re:Good acquisition in my mind by Anonymous Coward · · Score: 1

      Actually Softlayer is NOT "a provider of datacenter space at its core." They are a massive provider of bare metal hardware, bare metal storage, and of course cloud storage and compute. In fact they don't do colocation at all and don't provide DC space to any third parties. They own most if not all of their own DCs and build them with a very specific design in mind for their bare metal and cloud businesses.

      Of course if you choose to interpret the provision of these services as a "provider of datacenter space" go ahead but in reality that's not really what they do. Equinix, Telx, Coresite, Digital Realty... yes that's what THEY do, but Softlayer is fundamentally a very skilled and experienced bare metal provider that happens to use a heck of a lot of data center real estate to do what they do.

  5. Re:It was not The Planet by unimind · · Score: 1

    I believe Softlayer bought The Planet. Fixed it up significantly, too, IMO.

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    The following statement is true: The previous statement is false.
  6. "Dark" past? by Tony+Isaac · · Score: 1

    What dark past? The linked article doesn't elaborate, nor does Wikipedia. I've been a customer of ThePlanet / Softlayer for years; it always seemed like a good company to me!

    1. Re:"Dark" past? by 54mc · · Score: 1

      Having worked with several former TP and EV1 people, I'm confused as well. Aside from running like, well, a lot of early tech companies did, I've never heard of any "dark history."

      --
      Joy! Beautiful spark of the gods!
    2. Re:"Dark" past? by Anonymous Coward · · Score: 5, Interesting

      I assume the "dark history" refers to the period when Lance Crosby was kicked out of The Planet, which was the impetus for founding Soft Layer. The Planet was in the process of having capital investors from Bain come in and overhaul the business. Bain didn't like that the COO, Lance Crosby, was so young and inexperienced and basically had the owner, Peter Pathos, cut him loose. Lance rounded up the rest of the executives and vice presidents and they all walked out the day The Planet was going to host Network Solutions to try and become their official partner. The exiled management went and founded Soft Layer. There was a very long legal battle about noncompetes and intellectual property between them.

    3. Re:"Dark" past? by cstdenis · · Score: 1

      They were not formerly TP, they bought TP as part of expanding. They existed long before doing this.

      --
      1984 was not supposed to be an instruction manual.
    4. Re:"Dark" past? by Anonymous Coward · · Score: 1

      EV1 was just a shitty shitty company that was absolutely miserable to work for. If you've worked with EV1 people, they should have plenty of stories about the transformer fire at the 2600 office that took 50 employees going to OSHA to get cleaned up, or the tech floor bathrooms, or Robert Marsh's infamous meetings where he would tell everyone the company was broke and couldn't afford raises but all of the cool kids were getting new sports cars.

    5. Re:"Dark" past? by gl4ss · · Score: 1

      I assume the "dark history" refers to the period when Lance Crosby was kicked out of The Planet, which was the impetus for founding Soft Layer. The Planet was in the process of having capital investors from Bain come in and overhaul the business. Bain didn't like that the COO, Lance Crosby, was so young and inexperienced and basically had the owner, Peter Pathos, cut him loose. Lance rounded up the rest of the executives and vice presidents and they all walked out the day The Planet was going to host Network Solutions to try and become their official partner. The exiled management went and founded Soft Layer. There was a very long legal battle about noncompetes and intellectual property between them.

      mod up and comment if true. I'm too lazy to read the wikipedia article sources.

      that doesn't sound too dark. sounds bright and employee driven.

      --
      world was created 5 seconds before this post as it is.
    6. Re:"Dark" past? by Anonymous Coward · · Score: 1

      I don't know what the submitter was referring to by "dark past," but this former mail systems administrator certainly remembers a dark side to them. We called them "Spamlayer" and "ThePlanet of Spam." Yes, every now and then you'd see a legitimate message from their IP blocks, at least I'm pretty sure there must have been a few, and they certainly had lots of customers engaged in pursuits other than spamming, but they also certainly didn't give any impression of being proactive about their spam problem. Spam, usually from contiguous blocks of IPs spanning half a dozen addresses up to an occasional /25-ish sized subnet, would spam for a little while before (having salted the Earth underneath themselves) moving to a similar block nearby. And not just one or two of these, but sometimes a dozen or more at a time, pumping out spam, driving the ratio of legit/spam to within a hair's breadth of zero. For years on end.

      Now we're not talking Hostnoc levels of abuse, but when there was an incoming SMTP connection from one of these networks it didn't take a genius to guess what it would be delivering.

      They were even mentioned in the summary of a Slashdot story entitled Naming and Shaming "Bad" ISPs.

    7. Re:"Dark" past? by Pf0tzenpfritz · · Score: 2

      TP was -according to Netcraft- the provider hosting by far the most scam or phishing sites for quite some time.

      --
      Oh, the beautiful gloss of greality!
    8. Re:"Dark" past? by fazey · · Score: 1

      the legal issues were because they stole "Orbit" (the internal system) from The Planet when they left. That same portal was then developed on for years, and created "IMS" which is still in use today at SoftLayer. You can still see the similarities. For example the menu. But they definitely did a better job updating it than The Planet did.

  7. Thriving corporations by sl4shd0rk · · Score: 1

    Yahoo buys Tumblr,
    IBM buys Softlayer,
    Microsoft buys InCycle,
    CBS buys TVGuide...

    With all these liquid assets flowing around, it won't be long before everyone is back to work!

    --
    Join the Slashcott! Feb 10 thru Feb 17!
  8. Clearly don't know your history by rgbrenner · · Score: 2

    Softlayer was founded by Lance Crosby, the COO for The Planet.. They forced him out of the company, so he left and started Softlayer. Shortly after The Planet merged with EV1, and then about 5 years later Softlayer and The Planet merged and kept the Softlayer name.

    I had servers at The Planet the entire time.. it's a good company.. and they have the revenue and profits to actually be worth $2B.. unlike some other recent acquisitions.

  9. How things change! by Anonymous Coward · · Score: 1

    IBM used to sell servers to companies which maintained their own in-house data processing facility.

    Now IBM will rent time on servers to companies which want to outsource their servers to a third party which can benefit from the economy of scale. It's just not cost effective to own commodity servers any longer. There's no business case to spend money on servers and maintaining them. The economy of scale means the datacenters in Texas are cheaper.

    I wouldn't want to be a system administrator right now, unless I wanted to move to Texas and look for a job. Along with all the other unemployed system administrators.

  10. Re:It was not The Planet by fazey · · Score: 1

    and The Planet and Ev1Servers were merged before that. Thanks to good ol' GI Partners for ruining my workplace experience with 3 mergers in 7 years.

  11. Re:2 billion by Anonymous Coward · · Score: 1

    SCO was a matter of principle. If I were IBM and had, say, $4 trillion in liquid assets, I still wouldn't pay the SCO douchebags 1 cent.

  12. Re:Three Bars for Life eh? by fazey · · Score: 1

    A tattoo artist at company parties... Plus a butt load of free alcohol is how that happened. But the tattoo was only free if it somehow involved the company or its logo.

  13. Quote comes to mind by MikeDataLink · · Score: 1

    "It was as if a million voices all cried out at once, and then went silent."

    --
    Mike @ The Geek Pub. Let's Make Stuff!
  14. The have a dark past by kriston · · Score: 1

    The /. post blurb mentions that Softlayer "[has] a dark past" but I don't see here, nor do I recall, what this dark past might actually be. Did the blurb poster mean hacking/spidering, or are they referring to some sort of clandestine intelligence role?

    Can someone enlighten us on what this "dark past" is?

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    Kriston