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IBM Buys Dallas Based Softlayer For $2 Billion
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.'"
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.
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.
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.
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.