You can build the future, you can buy the future, or you can do both. Nearly all of the world’s big tech companies choose the latter. And it’s not that they lack the ability to be innovative or hire the best talent, but because as EMC Chairman Joe Tucci says, “No matter who you are, most of the smartest people work for someone else.”
In the Market for Innovation
It’s for this reason that tech giants like EMC, IBM, Oracle, HP, Microsoft, Salesforce and the like are always shopping, searching for who they can buy that will give them a leg up on the competition.
Acquisitions matter. That’s always the case.
But as we enter the third era of computing, where social, mobile, telemetry and Big Data come together at record speed in a “single” place, acquisitions become even more important. Because you can’t see it all, predict it all, or build it all fast enough. You have to buy it as soon as you decide that it’s relevant to your strategy, or your competition (who you may not be able to see or name) will.
And the cost of hesitation is not only a potential loss in marketshare, but it could also put you out of the game. Everyone agrees that some of today’s most trusted IT industry giants will disappear and new ones are lining up to take their place.
The game, then, will be won by those who play the best offense.
The 2 Billion Dollar Prize
Companies like EMC and IBM know this. They seem to recognize that they have gaps in their strategies to be players in computing’s third wave. And as much as they’ve been talking Cloud and Big Data for years, they haven’t built what SoftLayer has -- a global cloud infrastructure made for Internet scale. The company has over 100,000 servers under management.
This is something that both EMC and IBM can build too; in fact they are probably already doing so. But SoftLayer ‘s product is already trusted, tried and proven. It’s used by some of the busiest internet companies in the world, namely Path, SendGrid, SlideShare, Cloudant, Citrix, ZipServers and AT&T, among others. And if it works for them, why not the Fortune 500 where EMC and IBM have loyal customer bases?
A buy would keep these behemoths’ sales folks from having to show up in front of customers with promises like “we’re building it” and needing to defend “why it’s not ready.” The best of golf course relationships get muddy when a client wants something and a beloved supplier can’t deliver.
Of course we’re not suggesting that this has ever been the case with EMC or IBM, just that it could happen. And mind you that delivering in a cloudy world, before everything is perfect would be a big no-no.
So, what's 2 billion dollars? That’s reportedly SoftLayer’s opening price. And while it will no doubt look steep for a guy like Tucci whose acquisition strategy looks more like stringing together pearls than buying gemstones, he might not need to breathe a lot of life or pump a lot of additional cash into this baby. Though Softlayer’s revenues are undisclosed, almost everyone agrees that they’re already making money.
And for IBM, which is building a SoftLayer-like offering, it could spell D-O-N-E and give its Big Data marketers something to talk about other than Watson.
Bid on folks! We’ll be watching.
Image courtesy of Csehak Szabolcs (Shutterstock)