IBM to buy cloud-computing storage provider SoftLayer for a reported $2 bn

International Business Machines Corp (IBM) yesterday signed a deal to acquire cloud-computing storage provider SoftLayer Technologies Inc, for a reported $2 billion.

IBM did not disclose the financial terms of the deal, but The Wall Street Journal and The New York Times reported that the Armonk, New York-based giant is paying around $2 billion for SoftLayer.

Texas-based SoftLayer, whose majority shareholder is private equity firm GI Partners, serves approximately 21,000 customers with a global cloud infrastructure platform spanning 13 data centers in the US, Asia and Europe.

Among its many innovative cloud infrastructure services, SoftLayer allows clients to buy enterprise-class cloud services on dedicated or shared servers, offering clients a choice of where to deploy their applications.

It competes with Amazon.com Inc's Web services business and Rackspace Hosting Inc in the infrastructure-as-a-service market, which is expected to grow to $38 billion in 2016.

Already one of the world's leading cloud providers, IBM expects to reach $7 billion annually in cloud revenue by the end of 2015.

IBM offers more than 100 SaaS solutions to help marketing, procurement, ecommerce, customer service, human resources, city management, and other professionals and also offers Watson solutions such as Client Engagement Advisorin the cloud, superior solutions such as IBM PureSystems and SmartCloud Enterprise+, as well as mission critical cloud services for SAP.

IBM said that it 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.

''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 hybrid cloud offerings, as well as software-as-a-service business solutions,'' said Erich Clementi, senior vice president, IBM Global Technology Services.

''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 Lance Crosby, CEO of SoftLayer.