IBM acquires SoftLayer as it aims to stabilize its cloud portfolio

IBM Corp. to stabilize its cloud portfolio with acquisition of SoftLayer

IBM Corp. to stabilize its cloud portfolio with acquisition of SoftLayer

Technology industry analysts believe that the ‘cloud computing’ market is finally on the growth curve. The two deals announced by two technology giants on the 4th of June prove that they are right.

Salesforce.com Inc. has informed that it will spend $2.5 billion to acquire a high-value cloud computing service provider called ExactTarget Inc. Meanwhile, IBM Corp. too announced that it would snap SoftLayer Technologies Inc. to stabilize its cloud computing portfolio. Though IBM Corp. has not divulged the price it paid to acquire SoftLayer Technologies, analysts place a $2 billion price tag.

Why the sudden Cloud Computing craze?

The past six years have seen phenomenal growth in the service vertical called as cloud computing. It typically involves the use of centralized resources accessed remotely for a pre-paid subscription to the service provider. It may come as no surprise that though many organizations are familiar with the concept of virtualized hosting, cloud computing takes the next step as services can be delivered to subscribers on various platforms, inter alia famous and widely known SaaS. This provides most businesses, small or medium or large, increased computing capabilities without the hassle of maintain such infrastructure themselves. Currently, most organizations choose a hybrid model that allows them to retain certain of the ‘sensitive’ data on-site and allowing general-purpose data on the cloud.

Though there are grave concerns about data security on cloud computing, advanced tools and software platforms do bridge this necessity.

Amazon Web Services define Cloud computing market power

In the past five years, Amazon Web Services business has grown by leaps and bounds to become an industry leader in ecommerce and other cloud-based services, harnessing latest advances in cloud computing technologies.

Analysts identify that the increased use of smart devices, including tablets and smartphones, which access multiple data formats typically from their browsers, has led to increased migration to secure cloud services.

Technology giants pre-view cloud computing growth

Therefore IBM’s acquisition of SoftLayer Technologies Inc. is seen as the tech giant’s attempt to remain relevant in the era of cloud computing. Though it already provides public cloud services with its SmartCloud, it is found to be restricted to its large Fortune -500 companies. The smaller and nibbler consumer accounts would be accessible only with lighter and agile cloud computing services like that offered by SoftLayer Technologies Inc.

SoftLayer Technologies already caters to a discerning client-base such as game builders, companies that work on database as a service like SlideShare, SendGrind, Cloudant and more.

The report, which has been recently issued by Gartner, indicates that the cloud computing market is expected to climb by 18.5 percent in the ongoing year. Some analysts believe that the cloud computing market is poised for higher growth of more than $130 billion as well.

As IBM Corp. begins its journey in double roles as a Fortune-500 company services provider as well as new-age dedicated web hosting and related services provider with SoftLayer Technologies expertise, it needs to be seen if it surpasses Amazon market power.

Richard Meryn
Richard Meryn, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

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